Charleston WV Sunday Gazette-Mail
September 04, 2005
Patrick Donovan is the first to admit his state agency has master-planned itself to death.
Some of those plans include ways for the West Virginia Public Port Authority to help businesses tap into the global economy. Others try to save companies money on their shipping costs. Others could create warehouse and distribution centers, which in turn add jobs.
All plans involve facilities along rivers in West Virginia.
"We have been known for too long as a master-plan organization," said Donovan, the agency's development coordinator and acting director. "It's time to implement some of the plans."
The Legislature created the Port Authority in 1989 to combine highway, rail and water transportation infrastructure to maximize overall economic advantages to business, industry and the state's citizens. Since then, the authority has created six port districts throughout the state, which could eventually combine multiple transportation modes.
Of the authority's port districts, only one operating port open to the public exists. A private company, Valley Inc. owns the land where a port at the 159-acre Jackson County Maritime and Industrial Center sits outside of Millwood. The company leases space to companies to park their river barges until they can be unloaded.
Two people work for the Port Authority, which falls under the West Virginia Department of Transportation. The agency's executive director position has been vacant since Bill Jackson retired in December. The board is expected to vote on hiring a director at its meeting on Thursday.
The agency has received state funding since 1993 and federal funding since 1996, according to statistics from the transportation department's budget division. Since then, the Port Authority has spent slightly less than $5.6 million in state money and $3.6 million in federal money, the statistics show.
For the 2006 fiscal year, Gov. Joe Manchin has recommended the agency receive $437,356. This is one of the smallest amounts an agency will receive from the state's $3.26 billion general revenue fund. Manchin recommended only 18 state agencies out of 92 receive less money than the Port Authority. The authority has also budgeted $549,442 in reappropriated state money that was designated for the agency in the past but not used.
The agency made headlines for more than the past decade when it proposed building a regional airport in Lincoln County. After the Port Authority spent at least $5.1 million in state and federal money, the project died last August when the Federal Aviation Administration determined the airport's cost would outweigh its benefits.
Now, the agency is moving forward with projects that combine multiple transportation types that seem to get back to the heart of why lawmakers created the group.
"We are in a new position at the Port Authority," Donovan said. "[We] won't grow by pointing fingers."
New projects
The Port Authority is focused on three projects.
The first, the Heartland Corridor, involves a rail line that stretches from Portsmouth, Va., to Columbus, Ohio, and passes through Prichard and Kenova in Wayne County. The plan calls for trains to carry double-stacked containers along this route, which will double the corridor's shipping capacity. The trains will then travel from Columbus to Chicago.
President Bush signed a federal transportation bill earlier last month that included $33 million for an intermodal terminal in Prichard and $90 million to improve a Norfolk Southern rail line between Virginia and Columbus. Shipping containers will be transferred among trucks, rail cars and barges at the Prichard site.
Donovan and Gus Drum, a community planner with the U.S. Army Corps of Engineers' Huntington District, say West Virginia could benefit from the project in several ways.
Construction jobs will increase to clear 26 tunnels to accommodate taller railroad cars along West Virginia's stretch of the corridor, Donovan said.
West Virginia could also benefit from the world's continued buying frenzy. Coastal ports such as Portsmouth, Va., don't have much more room to grow. That could push goods further inland to another distribution center, Donovan said. Prichard could be that place.
Businesses such as Lowe's, Wal-Mart and Home Depot will need more space, which could result in warehousing and distribution facilities popping up in Prichard, which would create jobs. Trucking jobs could also crop up to move the products from the warehouses to the stores, Donovan said.
Shippers could save money by sending their products on the corridor through West Virginia. The corridor slashes the current distance freight travels from Virginia to the Midwest by 250 miles. The West Virginia route could save companies $450 to $650 in shipping costs for each container, according to a 2003 study by the Rahall Transportation Institute.
The Prichard site would allow companies to drive only 50 to 60 miles to load containers into rail cars, instead of using trucks - a more expensive mode of transportation - to transport their products, Drum said.
Although the authorization is a major step, the project isn't "anywhere near reality yet," he said. The national project calls for $266 million, but only $143 million has been earmarked. Moreover, West Virginia transportation officials aren't quite sure how its funding will be distributed, whether the state will have to provide matching money or where that money would come from.
Norfolk Southern expects to begin work on the tunnel clearances in 2006. Donovan estimates it would take three to five years until a container moves through the Prichard facility.
The second project involves creating a port that would allow businesses that export products out of state to share container space on barges or rail cars with other businesses that also don't have enough products to fill an entire container. West Virginia has 168 independent sawmills that don't produce enough timber to containerize and ship their products by themselves, Donovan said, referring to a Port Authority study.
Now, trucks haul the timber from these smaller companies to out-of-state containerization sites. West Virginia could create a centralized port to fumigate and containerize the wood and then ship it out of state by river or rail, Donovan said.
The authority's third big project involves the agency working with the Kanawha Valley Local Port Authority District to investigate buying chemical storage tanks from Dow Chemical Co. and leasing the empty ones to companies interested in storing chemicals. The local group is studying which products are shipped in and out through the Kanawha Valley along rivers and identifying companies that might use a port.
The local group is close to finishing its master plan and has identified sites it would like to buy, which include a 36-acre site in North Charleston and a 20-acre site in Institute.
Two businesses have contacted the local port authority district's project manager Steve Weir in the past few months to ask about leasing tank storage space. At the North Charleston site, there's space for a facility where workers could transfer chemicals from tanks to drums for companies that want a smaller amount of the product. There seems to be a lot of demand for that repackaging service in the area, Weir said.
Although Dow hasn't yet set a price for its properties yet, the local agency would use the money it received from tenants to pay for the loan or bond to buy the property. Weir said he hopes to have an agreement to purchase the sites from Dow by the end of the year.
The state Port Authority would inspect the tanks and conduct an environmental assessment before giving the local port authority the OK to buy the facility, Donovan said.
"If it gets to the point you know it doesn't make sense, you say: 'No, it's not a good project,'" he said. "How do you know its not going to work unless we invest to find out?"
'A great asset'
Donovan sees the Jackson County port as a good example of a public-private partnership. The Port Authority partnered with the Jackson County Economic Development Authority to create the state's first public port district in 1994.
"For Jackson County, our public port has been a great asset for our community," said Mark Whitley, the development authority's director.
Because the maritime and industrial center has access to river, rail, highway and air transportation, he can use that as a selling point to potential tenants.
Transportation is one of the most important issues a business examines when considering a site, Whitley said. The park has 13 businesses that employ close to 200 people, with two upcoming expansions planned. A distribution company already in the county needs more land and plans to move to the center. The company will add 100 jobs to its existing work force of 100, Whitley said. Plus, Star Plastics Inc. is expanding its plant and expects to create 59 more jobs in three years.
The development authority and Port Authority work closely, Whitley said. The development authority received $30,000 last year to study how to enhance the port, Whitley said. The group is asking for $35,000 this year to improve site access and create more port space, Donovan said.
Plus, Jack Burlingame, the development authority's former director, has been on the state agency's board of directors for two years.
Despite the port's availability, only two companies use the facility, said Dennis Taylor, president of Valley Inc., the company that owns the port's land. Valley receives limestone, sand and gravel and Century Aluminum receives a coke product that's used in its metal production.
Business at the port has been about the same for the past 10 years, Taylor said.
"Business has been slow. We hoped more people in the industrial park would ship by barge," he said.
The future
Donovan and the Port Authority board members will talk about creating a public-private partnership called West Virginia Ports Inc. at its meeting this week. Employees of the nonprofit operating company would work at the port sites to manage the facilities, while the state would continue to own the port's infrastructure. The company would create a revenue stream for the Port Authority and at some point, hopefully make it self-sustaining, Donovan said.
West Virginia Ports Inc. is tied to the development of the Prichard site. But there needs to be a port to operate before there's an operating company, Donovan said. Details such as the group's funding have not yet been worked out.
Meanwhile, the group continues to try to turn all of their plans into realities. The bottom line is money, Donovan said. "How do we raise money? Revenue bonds, state money? How do we make the money work?" he asked.
For the Heartland Corridor project, the agency is deciphering the transportation bill to determine whether it requires a state match, and if so, where that money will come from. And, the Port Authority should have a draft final report in six months to figure out what is the next step in the project to create a port to combine container space.
"You want to make sure you have good analysis," Donovan said, of the information leading up to a decision.
To contact staff writer Jennifer Ginsberg, use e-mail or call 348-5195