Port Authority revives plan for cold-storage warehouse
The Maine Port Authority plans to invest $16 million, six months after Americold pulled out of the project.
By PETER McGUIRE Staff Writer
By PETER McGUIRE Staff WritertrueX:\Main\manifest_PD_20181231_16.txt\\192.168.0.55\Olive\E-pub\Daily\Profiles\Morning Sentinel\XML Setting\MTMS_Settings.XML
The Maine Port Authority plans to invest $16 million to resurrect plans for a cold-storage warehouse for the Port of Portland.
A funding proposal comes about six months after international cold storage company Americold dropped plans to build a warehouse near the International Marine Terminal.
Authority board members recently agreed to allocate $8 million from Maine’s transportation budget and use federal tax incentives to get another $8 million from private investors.
The authority wants to use that capital to court a private-sector partner to help pay for and operate a refrigerated warehouse on state-owned land at the port. The project is expected to cost at least $26 million.
“I think it is the quickest way to get the project done in the best terms for the port authority possible,” said Jonathan Nass, the authority’s chief executive officer.
Refrigerated storage at the state’s only container terminal has for years been a top priority for state and local officials. Supporters say a temperature-controlled facility could make the terminal more competitive; benefit local food, beverage and biomedical producers; and aid Eimskip, the Icelandic shipping company with U.S. headquarters in Portland.
“We certainly feel there is a need for a cold storage,” said Andrew Haines, vice president of Eimskip USA. “We have not decided if we are going (to be the private partner) in that. It is still on the drawing board.”
Eimskip specializes in refrigerated cargo and has said cold storage in Portland is critical to expand its cross-Atlantic shipping business.
In the past year, the company began weekly container service between Portland, Atlantic Canada and Reykjavik. The number of containers landing in Portland has nearly tripled since Eimskip started shipping there five years ago, according to state data.
Maine will need cold storage to keep growing that traffic, Haines said.
“Space in the cold stores in Boston and New Hampshire continues to get tighter every year, and our customers are crying out for it,” he said.
The International Marine Terminal could support more than 740 direct and indirect jobs and add $101 million in economic output by 2025, according to a low economic impact estimate drafted in 2017 by the Greater Portland Council of Governments.
“The construction of a cold storage warehouse would fill a critical gap in global cold storage logistics while supporting Maine’s biotech, agriculture, seafood, and food and beverage industries,” said council Executive Director Kristina Egan. “Maine is clearly lacking in freezer capacity, and this project would help the economy of the region and the state.”
Three years ago, the port authority chose Americold to build and operate a $30 million warehouse
on state-owned land next to the container terminal. That plan was put on ice as Portland’s economic development department spent a year and a half drafting new zoning rules to allow the almost 68-foot-tall building, a proposal fiercely opposed by neighbors in Portland’s West End. The City Council approved zoning changes in September 2017, but Americold never pursued construction. The company officially ended its involvement last June.
This time around, Nass said, the Maine Port Authority wants to have more involvement planning, designing and operating the building, instead of contracting those obligations to another company entirely.
“The difference is that we will be in a position to be, if not an owner, then to have a bigger piece of it and have a little more control,” he said.
The Maine Department of Transportation set aside $8 million in its three-year work plan for the cold storage project. Nass hopes to match that with another $8 million in private investment raised through the federal New Markets Tax Credit program. That program gives investors up to a 39 percent income tax credit for putting money into qualified projects in low-income areas. Even when Americold was involved, it was assumed that the New Markets credit would be used to fund construction, Nass said.
He hopes to have the cash in hand and be ready to bargain with a partner as soon as spring 2019.
“We have had a lot of interest from a lot of parties,” he said. “We will be negotiating with actual partners with $16 million in capital instead of $8 million in capital.”
Peter McGuire can be contacted at 791-6325 or at: email@example.com