It is commendable that South Carolina lawmakers are examining the State Ports Authority’s request to borrow up to $ 550 million to make upgrades at the Hugh K. Leatherman Terminal that is taking shape along the North Charleston waterfront. As one of the largest public investments in the state in recent years, it deserves a more detailed examination.
We believe that lawmakers and Governor Henry McMaster should ultimately conclude that it is a good deal for the state, assuming that the port resolves its pending union-labor dispute. Not only because the loan would help the Leatherman Terminal fulfill its cargo handling potential, but also because it would help to minimize the impact on air quality and highways in our region, particularly on Interstate 526 between North Charleston and Mount Pleasant.
Most of the money, $ 400 million, would complete a 120-acre rail yard at the former Navy base, north of the terminal. The Port Authority would operate the shipyard, which would be owned by Palmetto Railways. The CSX Corp trains. and Norfolk Southern would transport cargo to and from the next new terminal.
Another $ 150 million would pay for a barge program to move water containers between the SPA’s Wando Welch Terminal in Mount Pleasant and the Leatherman Terminal. Containers can be transported to and from the rail yard via a private road. This piece also includes a 700-foot extension of the pier at Wando Welch and a second pier on the Leatherman website.
Jim Newsome, president and CEO of the State Ports Authority, considers projects crucial to the continued competitiveness of the Port of Charleston, which in turn helps the state’s economy to succeed. “We are the last major port on the East Coast to have a railroad close to the pier,” he said.
Mr. Newsome’s business acumen is highly regarded, but we are pleased to see lawmakers not simply taking his word on all of this. The Senate scrutiny of the deal has already led to an important change: the outcome of the strange forced marriage between the South Carolina and Georgia port authorities in the development of a new container terminal in Jasper County, across from the Port of Savannah. Jasper employees are now free to work directly with the Georgia Port Authority on this, which may or may not bear fruit.
The Senate approved S.491 on Thursday, authorizing the loan, and members of the House will take over soon. Meanwhile, Governor McMaster praised the “ease of intermodal transfer of world-class containers” in his State of the State address. Although he did not specify whether he supports the loan to support it, he noted that, “Once completed, the freight business will skyrocket with new and expanded rail access, traffic congestion will be eased in Lowcountry and new jobs and investments will flow across the state. “
The success of South Carolina’s ports during the past century stems in part from the state’s willingness to make significant investments in modernizing waterfront infrastructure. And the Port Authority’s continued success is likely to demand more of it. It is worth mentioning that the state already has a lot of skin in this game. The $ 550 million would go beyond $ 1.7 billion for the construction of the Leatherman Terminal and the Wando upgrades, both financed largely by the port; a $ 558 million port deepening project; and a recently completed $ 220 million branch, directly connecting the Leatherman Terminal to Interstate 26. And that doesn’t include the millions of dollars already spent to secure space for the rail yard and get the green light from the Federal Railway Administration and the Army Corps of engineers.
The state has a healthy bond rating, the ability to borrow more and a history of issuing similar bonds to provide incentives for major economic development projects, including Boeing Co. and Volvo Cars.
Perhaps the biggest issue should involve the timing of the loan. Lawmakers may consider giving approval for the loan on the condition that the final approval, by the Joint Bonds Review Committee, does not take place until the Port Authority resolves its labor issue as to whether unionized or state workers will operate the Leatherman Cranes ship and other lifting machines.
We hope that the Port Authority will soon receive a green light from the National Labor Relations Board to use its “hybrid model” – union members moving cargo alongside non-unionized crane operators – at the Leatherman Terminal. Until that happens, however, the competitiveness of this new terminal will be in doubt. As well as the wisdom of investing $ 550 million more there.