Executives sign off on APM Terminals-VPA deal

NORFOLK

Top port executives signed documents Thursday that finalized a 20-year lease of APM Terminals' state-of-the-art container facility in Portsmouth to the Virginia Port Authority.

"The agreement has been signed and executed, so we're done," said Jerry A. Bridges, the Port Authority's executive director.

The culmination of months of negotiations, the deal puts all of the major marine terminals in the port of Hampton Roads under one flag.

"It's really a big deal; it's a fantastic deal," said Joseph A. Dorto, president and CEO of Virginia International Terminals Inc., the authority's operating affiliate.

"The competition is now totally outside of Hampton Roads; it gives us a major weapon to go after competing ports with," added Dorto, citing New York/New Jersey, Savannah, Ga., and Charleston, S.C.

The papers were signed Thursday afternoon by Bridges, Dorto and Eric A. Sisco, president of APM Terminals Americas.

The effective date of the agreement is Tuesday.

There were no modifications to the agreement released last week, Bridges said.

The base rent for the facility is valued at $865 million in today's dollars but could end up costing the authority more than $1.1 billion, after adjustments for inflation.

The Port Authority will pay APM Terminals about $40 million a year. By the end of the lease in 2030, base-rent payments, compounded by inflation, could increase to more than

$70 million a year. APM also will receive a bonus payment for container volumes of more than 500,000 a year.

Port officials do not expect to have any trouble paying the rent based on revenue from shipments currently moving through APM combined with the container traffic that will soon be transferred from Portsmouth Marine Terminal.

APM Terminals' current traffic generates about

$25 million a year on a volume of roughly 230,000 containers - a little over a quarter of its capacity.

Robert McCabe, (757) 446-2327, robert.mccabe@pilotonline.com