VIRGINIA BEACH, Va. (AP) — Virginia port officials have reached a deal to extend the lease of its privately owned terminal in Portsmouth and will break ground as early as next year on a project that will roughly double its capacity, Gov. Terry McAuliffe said Thursday.
The state has wanted for months to expand Virginia International Gateway, one of four terminals managed by the port, but was concerned about investing a lot of money into the project only to lose control of the terminal at the end of its 20-year-lease, signed in 2010.
Under the deal, the state’s lease would be extended another 35 years, allowing the expansion project to move forward next year, said John Milliken, chairman of the VirginiaPort Authority’s board of commissioners. Virginia International Gateway will cover the upfront costs and will be reimbursed by the state through increased rent payments.
McAuliffe praised port officials for the deal, saying it will allow the port to “control its own destiny.”
“If we’re spending taxpayer dollars, I’m not going to allow (the terminal) to revert to an overseas company,” said McAuliffe, who made the announcement at the Governor’s Transportation Conference in Virginia Beach. “We now have an agreement: This is our asset.”
The expansion project will allow the terminal to hold about 600,000 more containers, Milliken said. It’s one of several plans to expand capacity at the port, which officials say is necessary as the size of ships arriving on Virginia’s coast continues to grow.
When the lease expires, the state will have the option to purchase the terminal, which was bought by U.S. infrastructure investment firm Alinda Capital Partners LLC and England-based private-sector pension fund Universities Superannuation Scheme Ltd. last year.
Milliken said the base rent, currently about $55 million a year, would go up under the new lease to pay for the project, but he couldn’t say by how much. The new lease is expected to be signed in the coming months.
___
Follow Alanna Durkin on Twitter at http://www.twitter.com/aedurkin
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Spartan Echo 