Competing bids sought on port offer

Published 12:27 am Saturday, March 28, 2009

A proposal from an Illinois-based development firm to partner with the Virginia Port Authority for the operation of its ports has passed the quality control stage of the state’s approval process.

CenterPoint Properties Trust submitted the proposal on March 12 to Virginia’s secretary of transportation. On Friday, the Virginia Port Authority made the proposal available for public viewing, which initiated a 120-day period during which other parties can offer competing bids.

Under the proposal, which CenterPoint estimates is worth about $3.5 billion in today’s dollars, the company would contribute its capital, development and logistics expertise, and Virginia logistics assets, such as its planned intermodal transfer station in Suffolk. Fisher said that inflation would make the agreement worth $9 billion over the course of its 60-year lifespan.

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In addition, it would acquire Virginia International Terminals as a subsidiary, and VIT would continue its management of the port facilities in Newport News, Norfolk, Portsmouth and Front Royal. The Virginia Port Authority would continue to advance the interest of the ports.

If CenterPoint’s proposal is accepted, the company would provide an up-front payment of $500 million to the port authority, which company President Paul Fisher said Friday would come from CenterPoint’s current capital. The proposal also includes annual payments to the port authority of $219 million, and annual payments to host communities of $128 million. The state also would participate in a profit-sharing program, which CenterPoint estimates could provide between $60 million and $191 million.

Fisher said the company’s planned investment in Suffolk made a partnership with the ports particularly attractive. The shipping center would occupy 900 acres along U.S. Route 58.

“We are significantly invested in Suffolk,” Fisher said. “This will enhance the attractiveness of Hampton Roads for port users.”

He also noted that Hampton Roads is connected via a Norfolk Southern rail line to CenterPoint’s hometown of Chicago, Ill., where CenterPoint owns several more distribution centers capable of handling cargo from the Virginia ports.

“With the freight connectivity to Chicago, (the ports) will end up with more freight,” Fisher noted. “More boxes mean more jobs, more economic activity.”

The proposal is an opportunity for CenterPoint and the ports to exercise their expertise for the good of the state, said CenterPoint Vice President Neil Doyle.

“Where they excel on the water, we excel inland,” he said.

The entire conceptual proposal is available for public viewing at, along with information on CenterPoint. The VPA posting of the proposal can be found at: