THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 29, 1997 TAG: 9701290515
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 72 lines
A General Assembly resolution requested by local port cities could threaten the Port of Hampton Roads' ability to compete and its plan to raise $70 million for expansion this spring, port and state officials said Tuesday.
Norfolk, Portsmouth and Newport News want the General Assembly's independent watchdog agency - the Joint Legislative Audit and Review Commission - to study whether the state adequately compensates them for the loss of tax revenue from the region's state-owned marine cargo terminals.
The cities estimate they lose $2 million to $3 million in property taxes from the tax-exempt port properties each year, while the state pays them service charges that total $317,200.
The issue came up at the Virginia Port Authority's board meeting Tuesday.
The port authority also disclosed Tuesday that it is working on a public-private partnership plan with the Navy to develop cargo facilities that both would use.
The partnership proposal, known as the Virginia Intermodal Partnership, would need congressional approval and cost more than $500 million. It calls for joint use of the port's Norfolk International Terminals, the cargo piers at the Norfolk Naval Station and the Norfolk Naval Air Station. The plan would also entail warehouse construction and highway and rail improvements.
``The potential impact is huge,'' said John Vickerman, a portconsultant with the Reston-based firm Vickerman Zachary Miller, which is working on a study of the proposal for the port authority. ``Both could do more with less.''
Vickerman's firm estimates that the partnership would add nearly 3 million tons of cargo to Norfolk International Terminals by 2010. It would also generate more than 5,000 jobs and millions in taxes.
The port handled 9.64 million tons of cargo last year, making 1996 its best year ever, the port authority announced Tuesday. That's a 6.1 percent increase from the 9.09 million tons handled in 1995.
``Our sustained growth this past year underscores that Virginia is the port of choice for many, if not most, steamship lines and shippers,'' said M.B. Mausteller, the chairman of the Virginia Port Authority.
However, port officials fear that the cities' desire for more tax revenue could threaten the port's growth.
``I don't think anybody understands the implications of this for the port and its ability to raise money in the bond market for expansion,'' Mausteller said. ``Out of that study could come the alligator that will bite our leg off.''
The biggest concern is that the port authority could be asked to make up the money to the cities, said Joseph A. Dorto, chief executive of Virginia International Terminals Inc., which operates the terminals.
``The only way we could recoup this is to raise our prices and if we raise our prices we'll drive away business,'' Dorto said.
But a Norfolk official said it's an issue between the cities and the state, not between the cities and the port.
``We're not asking the port to pay any more money,'' said Bob Fischbach, Norfolk's government programs director. ``In fact we're just asking for a study.''
While acknowledging that the resolution only proposes a study, state Transportation Secretary Robert Martinez said it casts a shadow over the future of the port that could effect the planned $70 million bond offering to fund the expansion of Norfolk International Terminals and the purchase of new equipment. The bonds will be backed by the port's revenues.
``It leaves a big hole in the minds of the financial community as to what the future revenue capacity of the port is,'' Martinez said.
Fischbach said the study wouldn't effect the port's bond issue.
The resolution asking for the JLARC study was introduced Jan. 20 by a bipartisan roster of Hampton Roads legislators, including Thomas W. Moss Jr., D.-Norfolk, the speaker of the House of Delegates. It was filed at the request of the cities.
KEYWORDS: GENERAL ASSEMBLY 1997