January 30, 2023

FDI Forum

Earn the right Invest

Port of New Orleans terminal project gets $800M investment | Business News

Gov. John Bel Edwards and the Port of New Orleans on Monday announced that two global leaders in the maritime industry will invest $800 million in the proposed container ship terminal planned for the Mississippi River in St. Bernard Parish.

The commitment from Ports America, the largest marine terminal operator in the U.S., and Terminal Investment Limited represent a major milestone in the development of the proposed port, called the Louisiana International Terminal. It helps ensure that construction could begin on the $1.8 billion facility once all necessary permits have been secured.







The proposed $1.5 billion Louisiana International Terminal for St. Bernard Parish will look similar to the Port of New Orleans, photographed on Thursday, October 27, 2022, along Tchoupitoulas Street. (Photo by Chris Granger | The Times-Picayune | The New Orleans Advocate)




It’s not clear how long that permitting process will take, particularly amid opposition from some officials in St. Bernard. Port NOLA officials have said they hope to break ground on the facility in 2025 and be open for business by 2028.

“This is the best news, from a civic, business and economic development perspective, we’ve seen here in years,” said business and civic leader Gregory Rusovich, who owns Transoceanic Development and is a former port commissioner and chair. “Two of the largest operators and carriers in the world are putting money into the project. Now, we can officially proceed.”

Escalating costs

The $800 million investment commitment from New Jersey-based Ports America and TIL, the U.S. investment arm of the Switzerland-based Mediterranean Shipping Company, comes on top of $500 million already committed by the port of New Orleans. Together, their $1.3 billion will go a long way towards funding construction, which officials now say will could be as much as $1.8 billion.

The deal is a joint venture between the two companies, the Port of New Orleans and the state. The companies will operate the terminal once construction is complete. 

For much of the past two years, port officials have been touting a $1.5 billion price tag for the project. But Port NOLA CEO Brandy Christian said given escalating costs and the reality of construction delays, it’s important to plan for the upper end of what the project might cost.

That means port officials still have to come up with an additional $200 million to $500 million to fund the project. Christian said she is optimistic that federal funding can be tapped to make up the difference.

“There’s a lot of federal infrastructure money available, especially for ports and rail, and we’re bringing a 70 percent match so we think we are competitive,” Christian said. “If we are not, the joint venture will address that through their own individual funding sources.”







NO.portupdate.102822_613.JPG

Port of New Orleans CEO Brandy Christian talks about the $1.5 billion Louisiana International Terminal for St. Bernard Parish on Thursday, October 27, 2022. (Photo by Chris Granger | The Times-Picayune | The New Orleans Advocate)




The port will not look to the state for direct funding of the facility. But the state is supporting the project in other ways, through a $50 million commitment to infrastructure funding for new roads in and around the facility.

Getting back in the game

According to port officials, the new container terminal, which will be located in Violet, is critical to helping the Port of New Orleans make up ground lost to other Gulf Coast ports in recent years, including Houston and Mobile.

Though the local port’s upriver container terminal at Napoleon Avenue has recently increased its handling capacity, container ships are ever larger in size and those above 10,000 20-foot equivalent container units cannot make it under the Crescent City Connection.

The Violet terminal is designed to put the Port of New Orleans back in the game. Once completed, the facility will be able to handle 2 million 20-foot-equivalent container units annually.

Economic development officials have said the project will create 17,000 jobs by 2050, though that includes indirect jobs and temporary construction jobs as well as permanent jobs.

Port officials could not immediately provide the breakdown between temporary and permanent jobs at the facility, which is expected to generate $1 billion of new tax revenue, including $470 million for St. Bernard Parish.

“This public private partnership with the Port of New Orleans, TiL and Ports America has the potential to become one of the most impactful economic development projects in our state’s history,” Edwards said in prepared remarks Monday. “It leverages the economic power of our greatest natural resources and enhances Louisiana’s ability to attract new investment from companies competing in the global marketplace.”

The port began working on the project several years ago and in 2020, it acquired 1200 acres in St. Bernard for the facility. But much of the past two years has been spent working with residents, worried the port would create a variety of environmental problems and increase traffic.

In late October, Port Nola unveiled revisions to the plan designed to appease residents. They include re-routing the highway to avoid as many residential areas as possible, including more green area “buffers” between the shipping terminals and neighborhoods, an overpass for cars to avoid a railroad crossing, space for a local cemetery to expand, and room for a biking and walking path to be built along the levee.

Even after the revisions, however, some opponents, who have organized under the Save Our St. Bernard banner, remained steadfast in their opposition, calling the revisions a publicity stunt.