APM tried to sell Portsmouth terminal
In the fall of 2011, APM Terminals wanted to sell its state-of-the-art container terminal in Portsmouth. Today, the terminal operator is positioning itself to run all of the state port facilities in Hampton Roads, reported The Daily Press.
Back when APM was seeking buyers for its terminal, the company was in its second year of a 20-year lease that gave control of that facility to the state. A company official said the lease explains the attempted sale and the more recent effort to buy operating rights from the state.
APM, a subsidiary of A P Moller Maersk, had plowed US$540 million into developing the highly automated, deepwater port on the Elizabeth River in 2007. Three years later it inked the lease deal that put the state's non-profit operating company, Virginia International Terminals, in charge.
When the facility went on the market, the commonwealth was one of two buyers that made offers for it.
The state reportedly put up an amount greater than $540 million.
Had the deal gone through, the state would no longer be on the hook for rent payments that, when adjusted for inflation, average about $57.75 million a year over the course of the lease.
And though the deal was originially heralded by Virginia Port Authority's former executive director Jerry Bridges as a "grand slam home run" for the state, it hasn't resulted in a short-term payoff. The agency estimated last year the state would lose $11 million as a result of the lease in its first two years.
Buying out the lease would have ended the rent payments, and made VIT the only container terminal operator in the region for the foreseeable future. But the state's offer didn't cut it for APM.
"As is often the case APMT explored a sale and nothing came of it," said John Crowley, APM's senior vice-president for law and regulatory affairs.
"At the time we had a lease so we weren't the operator," he said, "and we are operators."
"They hadn't gotten what they thought it was worth, and since they didn't sell it they decided maybe they could come back in and operate all the ports," said Mike Quillen, VPA board chair.
APM submitted a bid to take over the ports, which it says is worth between $3.1 billion and $3.9 billion to Virginia.
APM is not now an operator in Hampton Roads, though it keeps its company headquarters at its Portsmouth facility. But its bid would make it the operator again at its Portsmouth facility and at state facilities in Newport News, Norfolk, Portsmouth and Warren County.
