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August 2011

Broward County leases Port Everglades land to railroad, expects new jobs

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A “milestone” agreement to lease public land at Broward’s seaport to a private railroad company won the County Commission’s approval Tuesday, cementing a deal that has been years in the making.

Broward elected officials and business leaders, as well as Port Everglades and Florida East Coast railway officials, said the compact for what they call an “Intermodal Container Transfer Facility” will bring much-desired jobs and expansion of commerce in an ailing economy.

The $72.8 million plan creates a place at Port Everglades in eastern Broward County where the containers that carry goods will be put onto trains right at the port, after they are unloaded from ships. Right now, trucks must transport the containers from the ships to a much smaller railcar-loading site outside the port along Andrews Avenue.

Those trucks will no longer be mixing with local traffic, either, when the new facility opens. A railroad spur will shoot off the main line and connect with the new facility at the port.

The deal is between Broward County’s Port Everglades and the Florida East Coast Railway, and involves significant public funds. The county will lease 42.5 acres that are worth $19.7 million, a gigantic swath of land at Port Everglades, to the FEC for 30 years, with two 10-year renewal options. The FEC will invest $5 million, apply for a $30 million state loan, and get $18 million in state grants.

A separate but related project involves building a vehicle overpass leading to the port so that the trains running on the new spur can carry two layers of containers stacked one on top of the other underneath Interstate 595. That $42 million Eller Drive overpass is expected to be paid for by the state.

As Broward commissioners dug into the details of the agreement, Commissioner Stacy Ritter said their main concern “is jobs, and this brings jobs to this county.”

Port officials say 760 construction workers will be employed to build the facility, and when it is done, it will support 2,100 new jobs in the region over the long term.

Lobbyist George Platt, a member of the Broward Workshop organization of business leaders, told commissioners the business community is “behind you all the way.”

He said the county’s large construction projects, including the port rail complex, a coming runway expansion at Fort Lauderdale-Hollywood International Airport and the planned new Broward County Courthouse will breathe life into a job market that needs it.

“These are good jobs,” he told them. “We’re not flipping hamburgers here. These are really, really good jobs and they are going to lead to substantial increases in income.”

Supporters said the port needs to expand in order to grab a competitive edge over other U.S. seaports, so that Broward County can benefit from jobs that come with the additional business.

The key, port and railway officials say, is to target more international trade, particularly with the widening of the Panama Canal, whose expected 2014 completion will open a new, fast shipping route for large ships arriving from Asia that cannot currently use the canal.

Port officials said they are studying a $320.8 million dredging project that would be done from 2015 to 2017 to accommodate bigger ships.

Port Director Phil Allen, who will retire in January, called Tuesday’s decision a “milestone” in efforts to expand the port during the next five years. He said infrastructure projects that expand port commerce “are critical for enhancing our competitive position and sustaining our local economy.”

The Broward FEC deal would not undercut a recent decision by FEC and the Port of Miami to upgrade a freight rail spur to link the port to the FEC national rail network through its Hialeah rail yard near Miami International Airport.

That project, now in progress, is part of a major overhaul of the Port of Miami that includes a tunnel under Biscayne Bay and dredging of the port’s cargo harbor to 50 feet to accommodate giant container ships after the Panama Canal’s widening is completed.

FEC executives said Tuesday that their company backs these port upgrades because it is bullish on global trade.

“FEC is optimistic on the intermodal segment for South Florida and our financial commitments to both Port Everglades and the Port of Miami reflect that,” said Husein Cumber, FEC’s executive vice president for corporate development.

“The assets being built through public-private partnerships at both ports will give FEC and the ports the ability to market unique services to ocean carriers and beneficial cargo owners.”

“Beneficial cargo owners” refers to so-called big box retailers such as Target, Walmart and Best Buy that use ocean carriers to move freight throughout the world.

“These infrastructure investments will ensure that the South Florida region has the port and rail infrastructure in place to compete with other parts of the country,” Cumber added.

El Nuevo Herald Staff Writer Alfonso Chardy contributed to this report.

By Brittany Wallman, Sun Sentinel

Read more: http://www.miamiherald.com/2011/08/23/2372074/broward-county-leases-port-everglades.html#story_link=email_msg#ixzz1W9L3suT9

Broward County Commission Approves MOU with Florida East Coast Railway to Transport Containerized Cargo at Port Everglades

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The Broward County Board of County Commissioners today unanimously approved a Memorandum of Understanding (MOU) with the Florida East Coast Railway (FEC) to construct and operate an Intermodal Container Transfer Facility (ICTF) on 42.5 acres of land at Port Everglades.

The ICTF in the Southport area of Port Everglades will facilitate the transfer of containerized cargo through the Port onto the FEC rail line via a connecting rail spur. The proposed ICTF is unique compared to similar facilities in other ports in that both domestic and international cargo would be handled on the site. These cargos are currently being handled on a 14-acre site on Andrews Avenue owned by the FEC. A combined near-dock facility at the Port should result in competitive transfer and shipping fees for port clients, thus increasing the Port's competitive advantage compared to other ports. Positive environmental benefits are also envisioned by the reduction of truck traffic on local roadways. By relocating from the smaller facility on Andrews Avenue, Route 84 highway congestion will also be reduced.

In addition, the project is anticipated to create 760 construction jobs and the cargo activity passing through the ICTF is expected to support 2,100 local/regional jobs in the long term.

Commissioners noted that the ICTF has been a long-standing goal for Broward County. Business leaders from the community provided supporting comments emphasizing the project's value to creating jobs and bolstering economic growth in the region.

The MOU calls for a 30-year agreement between the FEC and Broward County with two 10-year renewal options. Broward County will contribute the land for the project and participate in joint marketing efforts. The total cost of the project including land value is $72.8 million, of which $18 million would be funded by the Florida Department of Transportation grants. Now that the MOU has been approved, FEC will move forward to secure an additional $30 million State of Florida Infrastructure Bank loan. The balance of the funding is from FEC equity.

In July 2011, the Florida Department of Transportation (FDOT) broke ground for the Eller Drive Overpass, which is a critical first step in moving the ICTF forward by allowing for an at-grade rail connection directly into Southport. This project is fully funded by the state and is estimated to cost $42 million. FDOT's Eller Drive Overpass project will consist of a four-lane bridge overpass on the primary entrance to the Port. This overpass will allow for construction of an at-grade rail spur to Southport while facilitating unrestricted movement to and from container and cruise terminals and to I-595 and the Florida Turnpike highway systems. The project also involves the widening, realignment, and construction of service roads parallel to the Overpass.

Port Everglades is one of the nation's leading container ports and a trade gateway to Latin America and Caribbean. Port Everglades has direct access to the interstate highway system, is within two miles of the Florida East Coast Railway hub and is just one mile from the Atlantic Shipping Lanes. Ongoing capital improvements and expansion ensure that Port Everglades will have the ability to handle future growth in container traffic. A world-class cargo handling facility, Port Everglades serves as an ideal point of entry for products shipped around the world.

More information about Broward County's Port Everglades and a video illustrating the Port's 20-year Master/Vision Plan is available on the Internet at www.porteverglades.net and www.portevergladesmasterplan.com.

DATE: August 23, 2011
CONTACT: Ellen Kennedy or Maisy Alpert, Port Everglades
PHONE: 954-468-3508 or 954-468-3505
EMAIL: ekennedy@broward.org or malpert@broward.org

Florida railroad sitting in sweet spot as state preps for expanded Panama Canal

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Besides the region's civic and port leaders, perhaps no one in the wide swath of Central and South Florida has more at stake with the opening of the expanded Panama Canal than does Jim Hertwig.

Hertwig is the president and CEO of Jacksonville-based Florida East Coast Railway (FEC), the regional freight railroad whose network extends along a 351-mile corridor from Jacksonville to Miami. FEC has a stranglehold on rail service across Florida and, perhaps more importantly for the company's future, a virtual monopoly on traffic at the Port of Miami, Port Everglades in Fort Lauderdale, and the Port of Palm Beach.

FEC's pole position will look more valuable than ever come the late summer of 2014, when the Port of Miami is scheduled to complete a $150 million project to dredge its harbor from the current depth of 42 feet to the 50-foot depth needed to handle the huge "post-Panamax" ships that will transit the widened and deepened canal when it opens at about the same time.

The project got a huge boost in early March when Florida Gov. Rick Scott directed the state's department of transportation to allocate $77 million to the work. The dredging coincides with the building of a tunnel that will reconnect the port to FEC's rail yard and take trucks off of local surface roads linking the port and the railroad.

In mid-July, FEC broke ground on an on-dock rail terminal at Miami. It will operate its first train there by the end of the first quarter of 2012, according to Hertwig. A similar project at Port Everglades will go live in the second half of 2013, he said.

Because Miami is the closest U.S. port to the canal, local and regional interests hope the deepening of its harbor and FEC's launch of on-dock rail service will make Miami the first and primary port of call for the larger ships expected to transit the Isthmus. Local officials also hope that 2014 will herald a re-drawing of the nation's international distribution map, as ships that in the past would have called at West Coast ports and moved goods eastward by rail or truck begin using Miami as a gateway to ship freight to closer-in Eastern U.S. destinations, where much of the nation's populace resides.

It may also herald a bonanza for FEC, which will be the go-to railroad to move containers off-loaded at the South Florida ports and headed both within the state and to points further north and west. "We will be able to serve markets like Atlanta and Charlotte in two days, and Memphis and Nashville in three days," said Hertwig, whose railroad delivers freight in 10 hours from Jacksonville and Miami.

Trade flow imbalance:
The shifts in distribution patterns may be most deeply felt within Florida itself. Between 12 million and 13 million people reside in the state's Central and Southern regions, the largest East Coast population center outside of the New York metropolitan area. Because of its large retiree and tourist population, however, the region is heavily skewed toward consumption, with relatively little production.

Many of the goods bound for Central and Southern Florida are produced either in South Georgia or Northern Florida around Jacksonville, and must then traverse—usually by truck at a significant cost—the lengthy peninsula down to the southern part of the state or be diverted west toward its center. What's more, there are few backhaul opportunities due to the lack of manufacturing in the region.

The imbalance of container traffic is striking, according to various sources. Hertwig said that for every four loads headed south there is only one moving north. Charles W. Clowdis, managing director-transportation advisory services for consultancy IHS Global Insight, said the ratio is closer to five-to-one in favor of southbound loads.

Florida port interests believe that deepening Miami's harbor to handle post-Panamax vessels will open up the state's Southern and Central regions to an avalanche of Asian imports that can be whisked across Florida and surrounding states, thus remedying the existing directional imbalance.

Plans for an inland port:
In preparation for the potential change, private-sector interests have joined to develop Florida's first inland port designed to link the seaports, via road and rail, with a centralized warehouse and distribution cluster that will serve population centers throughout Florida and the Southeast United States. The 2,300-acre facility, located in southwest St. Lucie County about 90 miles from the Port of Miami and 50 miles from Port Everglades, will cost about $2 billion and take about 15 years to complete.

The first phase will be finished in 2014 to coincide with the expanded canal's opening and the completion of Miami's dredging project.

The inland port "will create an entirely new industrial model for Florida, ultimately providing a connection to direct on-dock rail service at Florida's key seaports, along with easy access to all major highways," said John Carver, who heads the ports, airports, and global infrastructure practice for Chicago-based real estate and logistics services giant Jones Lang LaSalle, which has been named the port's exclusive project advisor.

According to JLL data, there are 12 inland ports in operation across the United States. Each port shares several common characteristics, namely proximity to at least 3 million residents living within a 200-mile radius; a direct connection to a seaport via one of the four major "Class I" railroads; designated status as a Foreign Trade Zone; and access to an abundant supply of surrounding industrial real estate.

Florida, whose container ports handle about 2.8 million twenty-foot equivalent units (TEUs) annually, is perhaps the most glaring hole in the inland port network, Carver said. "It's the only state in the country with this kind of volume that doesn't have a dedicated facility like this," he said.

The big winner, Carver said, could be FEC, which although not a Class I carrier, is positioned to provide all the on-dock rail capability to serve the inland port. "The key is access to the on-dock terminal capacity, and FEC has a lock on that," he said.

From DCVELOCITY: http://www.dcvelocity.com/articles/20110822florida_railroad_looks_to_capitalize_on_panama_canal_expansion/