New cargo terminal buoys Portsmouth

A view of the new APM Terminals Virginia, which opens officially on Friday. (STEVE EARLEY PHOTOS | THE VIRGINIAN-PILOT)

By Gregory Richards
The Virginian-Pilot

PORTSMOUTH

When the new $450 million port terminal officially opens in his city on Friday, Mayor James Holley will be all smiles.

“That’ll be the biggest and the best ribbon we’ve cut since 1752,” Holley said. That was the year Portsmouth was founded.

APM Terminals Virginia will add many more container-hauling trucks to city roads and send out road-choking trains multiple times each week. Its bright lights and noise may disturb neighbors in West Norfolk and Hunter s Point. But it also will pump at least $2 million a year into Portsmouth’s tax coffers. It will bring the city new jobs and bragging rights as it becomes the port epicenter of Hampton Roads.

APM Terminals spent about seven years developing the cargo container terminal, which sits on a large tract north of Va. 164 in Churchland. It replaces a far smaller facility leased from the Virginia Port Authority next to Portsmouth Marine Terminal.

The new terminal opened July 30 for testing and ramp-up operations, including working some smaller ships. The first big vessel is scheduled to arrive Tuesday, but the facility won’t be fully operational until year’s end. It is expected to increase the number of containers the port of Hampton Roads can handle each year by 50 percent.

That’s just the beginning for Portsmouth. The APM terminal, which has room for expansion, likely will be followed by the Port Authority’s planned $2.2 billion terminal on Craney Island. The first phase of that complex is slated to open in 2017.

“It will make us the city in Hampton Roads when you think of the maritime industry and port-related activities,” said Steven L. Lynch, Portsmouth’s economic development director.

These cranes at APM Terminals Virginia are electric, not exhaust-spewing diesel-powered models. To lessen the terminal’s impact on neighbors, the company also preserved a 110-acre forest buffer.

The big tract of farmland and swampy woods where the APM terminal now sits had long been Portsmouth’s field of dreams.

It was the city’s only large parcel on the Elizabeth River’s deep water that was prime for the kind of industrial development that could deliver jobs and taxes.

Over the years, an oil refinery and a coal export terminal were proposed for the site, but neither came to fruition.

City officials were understandably excited when the Danish shipping conglomerate A.P. Moller-Maersk Group chose the site for a terminal to handle cargo for Maersk Line, the world’s largest shipping line and the port of Hampton Roads’ biggest customer.

Portsmouth needs the help. Forty-one percent of the assessed value of property in the city is not taxable, much of it owned by the Navy, other federal departments or the state, according to the city.

The terminal will be the city’s largest real estate taxpayer, said Lance Wolff, the city’s chief financial officer.

It is projected to generate $2 million in tax revenue for the city in the current fiscal year, he said, including real estate and equipment taxes. That’s a tenth of its new tax revenue this year and a little less than 1 percent of the city’s $231 million operating budget.

That $2 million doesn’t include the value of the six towering multi million-dollar container cranes used for loading and unloading ships. The city still is valuing those cranes for tax purposes, Wolff said.

Eventually, APM Terminals Virginia may generate $5.5 million a year for Portsmouth, according to city budget documents.

That money will help Portsmouth increase school funding, beautify city gateways, improve curbs and gutters and increase employee compensation so the city can better compete with its peers.

When the project was announced in April 2004, the state said it would create 210 new jobs. The company now will only say that the new facility will employ more than 130. That’s how many workers APM is transferring from its existing 71-acre facility in Portsmouth, which will close by year’s end.

Portsmouth wants to use the new 230-acre terminal’s presence to attract the offices of maritime-related companies such as customs brokers and logistics businesses, Lynch said.

“Since our city and Hampton Roads has become such a centralized port hub, you would think companies would like to be here and be a part of it,” Lynch said.

The goal is “not necessarily” to scavenge office jobs from other local cities such as Norfolk, home to many maritime businesses, he said.

Portsmouth is aiming for such jobs because it doesn’t have the large tracts of land needed for the distribution centers that serve container ports by sorting cargo and repacking it for shipment inland.

Such centers have bloomed in Suffolk and Isle of Wight County and will sprout as the APM terminal’s operation ramps up.

As APM’s operations expand, more trucks will pour in and out of its gate at a new exit off Va. 164, known as the Western Freeway.

The facility is projected to add 3,000 truck trips a day onto the state highway, which connects the Midtown Tunnel and the Martin Luther King Freeway with northern Suffolk and Interstate 664, said Richard Hartman, Portsmouth’s city engineer.

Since Va. 164 handles about 30,000 vehicle trips daily, the effect on roadways will be minimal, Hartman said.

Many of those trucks will run in the middle of the day, not during the morning and evening rush hours, said Dwight L. Farmer, the deputy executive director of transportation at the Hampton Roads Planning District Commission, a regional planning agency.

“I’d classify the impact as minor to, at most, moderate, depending on the time of day,” Farmer said.

The trucks’ impact is lessened by the terminal’s $22 million interchange, between Cedar Lane and the Western Freeway Bridge. It was paid for mostly by the state to keep big rigs off neighborhood streets.

Up to 20 percent of the terminal’s cargo will be shipped out by rail over a line that currently cuts through the heart of Churchland. The little-used line will now be much busier as trains – some more than a mile long – block road crossings in Portsmouth, Chesapeake and Suffolk for minutes at a time.

“People don’t realize what the impact of this thing is going to be,” said Chesapeake resident James B. Murray, who is worried about the trains.

But the problem is short-term – at least for Portsmouth and Chesapeake. A $60 million state and federal project will relocate the rail line through those cities to the medians of the Western Freeway and Interstate 664. The work is scheduled to be finished by the end of 2009.

Portsmouth wants to use the new 230-acre terminal’s presence to attract the offices of maritime-related companies such as customs brokers and logistics businesses

Residents living near the terminal recognize the benefits it will supply to the city, but they have concerns.

They’re happy the rail line is being relocated. They also want a sound wall running the length of the new highway interchange to block truck noise. And they worry about increased crime.

A planned sound wall has been delayed, partly because of funding issues, Hartman said. The city wants Congress to redirect $1.6 million it had set aside to build the terminal’s exit off Va. 164. That money wasn’t needed for the road project.

Some residents also fear that truckers might bring drugs, crime and prostitution to their neighborhood.

Truckers are not all “family men,” said Mary Williams, a resident of Hunter s Point, the neighborhood across from the terminal’s entrance.

Patricia Edgerton, president of the Hunter s Point Civic League, said she’d like more police officers assigned to the area, something Mayor Holley said he “would be amenable” to doing.

APM has taken steps to reduce the terminal’s impact. The facility’s cranes will be electric, not diesel-powered models that spew exhaust. The company preserved 110 acres of forest to buffer adjacent neighborhoods and gave $5.3 million to form the Living River Restoration Trust, a sister to the Elizabeth River Project, a Portsmouth environmental group. The money is being used to cleanup polluted sections of the river and build oyster reefs.

APM has been a good corporate citizen so far, Edgerton said. In an effort to hear neighborhood concerns, company officials walked through Hunter s Point and took residents on a bus tour of the terminal, she said. Also, she said, they acted quickly to address complaints about noise and dust during construction.

Hunters Point suffered before the new exit was built, when parades of dump trucks thundered down West Norfolk Road through their neighborhood. Some homeowners blame the trucks for cracks that developed in the walls of their homes.

“One beauty goes from one room to another,” said Sondra Eisenpress, who lives on West Norfolk Road. “That’s absolutely from dump trucks.”

Edgerton said she’d like APM to give the neighborhood some trees and shrubs at least – or money for the sound wall if the federal support falls through.

“We want to see something concrete,” she said.

Still, she recognizes that the terminal is the largest private economic development project in the city’s history.

“Everybody’s going to benefit,” Edgerton said.

Staff writer Meghan Hoyer contributed to this report.

Gregory Richards, (757) 446-2599, gregory.richards@pilotonline.com

The big tract of farmland and swampy woods where the APM terminal now sits had long been Portsmouth’s field of dreams.