Vol. 114 - No. 99 - May 25, 2010
PORT NEWS
Minnesota Senators Work To End Lakes Dredging Crisis
Minnesota Senators Amy Klobuchar (D) and Al Franken (D) have cosponsored legislation that will end the dredging crisis on the Great Lakes. Senate bill 3213 would require that the Harbor Maintenance Trust Fund ("HMTF") spend what it takes in each year rather than hoard tax dollars meant for dredging the nation’s ports and waterways. The chronic under funding of dredging that has resulted from amassing a nearly $5 billion surplus in the HMTF has left an estimated 15 million cubic yards of sediment clogging the Great Lakes navigation system.
"We deeply appreciate the Senators’ support," said James H.I. Weakley, President of Great Lakes Maritime Task Force, the largest coalition ever to promote waterborne commerce on America’s Fourth Sea Coast. "The largest ships loading iron ore in Minnesota’s Great Lakes ports routinely leave thousands of tons of pellets behind each trip because the U.S. Army Corps of Engineers cannot maintain the Great Lakes Navigation System to project dimensions. America’s steel industry is on the rebound. We must not allow the dredging crisis to stall this recovery. The tax dollars we need to restore the system are collected each and every year. S. 3213 will make those funds available and within 5 years or so the dredging crisis will be a thing of the past."
A tax on cargo moving through deep draft ports annually generates $1.6 billion in revenues that are deposited in the Harbor Maintenance Trust Fund. However, the fund only spends about $800 million per year. Therefore the HMTF has a surplus of nearly $5 billion.
"The Corps of Engineers estimates it needs $180 million to restore the shipping lanes," said Weakley. "Clearly the money is there. What is lacking is our access to those dollars."
Minnesota is the largest shipper of ir on ore on the Great Lakes. In a typical year the ports of Duluth/Superior, Two Harbors, and Silver Bay will load about 40 million tons of iron ore, or 65 percent of all taconite pellets shipped on the Lakes.
Superior is the largest coal-loading port. Shipments can top 22 million tons, or roughly half of all the coal moving on the Lakes.
Duluth/Superior is also the largest grain shipping port on the U.S. side of the Lakes. The port typically loads about 2 million tons of grain each year.
"As our economy rebounds from its worst recession since World War II, we need to make Great Lakes shipping as efficient as possible," said Adolph Ojard, Executive Director of the Duluth Seaway Port Authority. "These industries are the foundation of our economy. Iron ore mining, for example, accounts for one-third of the gross regional product of northeastern Minnesota. By cosponsoring S. 3213, our Senators are saying yes to more family-sustaining jobs in this region."
Cleveland-Cuyahoga County Port Authority agrees to finance job-generating film production, health care projects
The board of the Cleveland-Cuyahoga County Port Authority agreed today to provide $58 million in financing to give a boost to two development projects in northeast Ohio.
The port will be issuing $5.2 million bonds for an $11.7 million project that will result in the production of three films in by New York-based Nehst Creations, which has a film production studio that is located in the Cleveland Convention Center. Nehst is providing an equity contribution of $6.5 million to the project. The State of Ohio offered a tax break for the project, while Cuyahoga County and the City of Cleveland guaranteed part of the financing of the project. Bond proceeds will be secured with revenues from the films.
The project will result in the creation of an estimated 100 full-time jobs and will advance northeast Ohio’s efforts to become more involved in the job-producing industry of movie making.
In addition, the port authority will be issuing $46 million in bonds that will refinance the existing facility and finance the expansion of the Independence Research Park, which was originally a research facility for Republic Steel, and now a steadily expanding and growing office and research building. Most of the building will be leased and used by the Cleveland Clinic. The Clinic recently signed a 15 year lease to be an anchor tenant for the building. The Clinic’s lease payments will be used to pay off the bonds.
The port authority has a long history of helping with the financing of job-creating projects and is credited with assisting local projects valued at more than $1.5 billion. No taxpayer dollars or port funds are ever used to generate financing through the port’s bond program. The bonds are sold to private investors, and the port functions as a facilitator for local businesses and those investors.
"These two projects are excellent examples of the port’s unique financing abilities being put to work to grow our local economy," said Steve Williams, chairman of the port’s board. "In addition to our focus on maritime operations, the port is interested in helping to finance sound projects that help retain or create jobs."
Larry Meistrich, Chairman & Founder of Nehst Studios said: "This project is a giant step forward toward growing the film-making business in Cleveland. This project could well be the seed that grows many more movies produced in Cleveland. It also demonstrates how the public and private sectors are working together to make this area more competitive."
Richard Pace, Chief Executive Officer of Cumberland Development, LLC which owns, manages and is leading the Independence Research Park Project added: "This project represents expansion in the health care industry, which is a vital and growing part of greater Cleveland’s economy. This means good-paying jobs located in Cuyahoga County."