It’s commendable that South Carolina lawmakers are considering the State Ports Authority’s request to borrow up to $550 million to make improvements to the Hugh K. Leatherman Terminal that’s taking shape along the North Seafront. Charleston. As one of the state’s largest public investments in recent years, it deserves careful consideration.
We think lawmakers and Gov. Henry McMaster should ultimately conclude that this is a good deal for the state, assuming the port resolves its ongoing labor dispute. Not only because the loan would help the Leatherman Terminal achieve its cargo handling potential, but also because it would help minimize the impact on air quality and highways in our region, especially the Interstate 526 between North Charleston and Mount Pleasant.
The bulk of the money, $400 million, would come to complete a rail yard covering 120 acres on the former Navy base just north of the terminal. The Port Authority would operate the yard, which would be owned by Palmetto Railways. CSX Corp trains. and Norfolk Southern would transport goods to and from the nearby new terminal.
Another $150 million would pay for a barge program to move shipping containers by sea between the SPA’s Wando Welch Terminal in Mount Pleasant and the Leatherman Terminal. Containers could then be moved to and from the marshalling yard via a private road. This piece also includes a 700 foot extension to the wharf at Wando Welch and a second wharf at the Leatherman site.
Jim Newsome, president and CEO of the State Ports Authority, calls the projects crucial to the Port of Charleston’s continued competitiveness, which in turn contributes to the success of the state’s economy. “We are the last major port on the East Coast to have a rail close to the wharf,” he said.
Mr. Newsome’s business acumen is highly valued, but we’re glad to see lawmakers aren’t just taking his word for it all. The Senate’s scrutiny of the deal has already led to a significant change: the unraveling of the awkward marriage between port authorities in South Carolina and Georgia over the development of a new container terminal in Jasper County. , across from Savannah Harbor. Jasper officials are now free to work directly with the Georgia Ports Authority on this, which may or may not bear fruit.
The Senate passed S.491 on Thursday authorizing the borrowing, and House members will resume it soon. Meanwhile, Governor McMaster touted the “world-class intermodal container transfer facility” in his state of the state address. Although he did not specify whether he supported borrowing to support it, he noted that “once completed, freight activity will skyrocket with new and expanded rail access, traffic congestion will be eased in the Lowcountry and new jobs and investment will flow across the state. .”
The success of South Carolina’s ports over the past century stems in part from the state’s willingness to make significant investments in modernizing waterfront infrastructure. And the continued success of the Port Authority will require probably more of the same. It should be noted that the state already has a lot of skin in this game. The $550 million would be in addition to $1.7 billion to build the Leatherman Terminal and upgrade Wando, both largely funded by the port; a $558 million port deepening project; and a recently completed $220 million spur directly connecting the Leatherman Terminal to Interstate 26. And that’s not including the millions of dollars already spent to secure space for the rail yard and get the green light to the Federal Railroad 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 question should be about when to borrow. Lawmakers could consider giving approval for the loan on the condition that final approval, from the Joint Bond Review Committee, does not take place until the Port Authority resolves its question of whether unionized workers or state workers will operate the Leatherman ship ashore. cranes and other lifting gear.
We hope the Port Authority will soon get the green light from the National Labor Relations Board to use its “hybrid model” – union members transporting goods alongside non-union crane operators – at the Leatherman Terminal. Until it does, however, the competitiveness of this new terminal will be in doubt. Just like the wisdom to invest an extra $550 million in it.