Port titans vie for right to manage proposed Southport on the Delaware

It's the stuff of reality television: a Battle of the Port Titans.

Two prominent marine-terminal operators with big stakes in the Delaware River each want to manage and control some of the 200 acres known as Southport, at the eastern end of the Navy Yard, south of the Walt Whitman Bridge.

Vying for the millions of dollars in business opportunities that could result: John Brown Jr., president of Penn Warehousing and Distribution Inc., a paper-import company that operates from Piers 38 and 40 and 78 and 80, who also runs Murphy Marine Services at the Port of Wilmington; and the Holt family, whose companies operate the Packer Avenue Marine Terminal and Gloucester Terminals L.L.C. in Gloucester City.

Brown said he had hired former state Sen. Vincent J. Fumo, a longtime family friend, to advise him in his Southport efforts. He did so, Brown said, after learning that the Holts had been trying to team up with an energy company to develop Southport without an open bid process, known as a request-for-proposals (RFP).

Brown said he had expected the Philadelphia Regional Port Authority (PRPA), the state agency that owns the land and terminals on the Philadelphia side of the river, to put out a request-for-proposals on Aug. 15. When that did not occur, rumors swirled and Brown worried that the fate of Southport as a seaport would not go to public bid.

"That was the point I hired Vince Fumo," Brown said. "I was waiting for the RFP to come out on Aug. 15, and then I was told by the port authority that they are not going to put this out for an RFP. I started my research, and I found out all this stuff, and I had a fit."

Tom Holt Jr., president of Holt Logistics, declined through his spokesman, Kevin Feeley, to discuss Southport.

Charles Kopp, chairman of the PRPA board appointed by Gov. Corbett, said emphatically that no deal had been struck with the Holts or any other port operator.

"We are having discussions with Philadelphia Energy Solutions about a lease of the Southport property to be developed as part energy hub and part port operations to receive cargo."

The lease will be considered by the PRPA board at its Sept. 16 meeting, Kopp said.

Philadelphia Energy Solutions, operator of the former Sunoco Inc. refinery in South Philadelphia, wants to put a natural-gas energy hub on the Southport land. Chief executive officer Philip Rinaldi met with port authority officials about developing a Marcellus Shale natural-gas pipeline connecting Pennsylvania's booming gas fields to the Southport site.

Rinaldi, who has spoken publicly about the need for an eastern natural-gas energy hub in Philadelphia, was traveling this week and unavailable for comment, a spokeswoman said.

Said Kopp: "At some point there will be a port operation, along with the energy hub, and that will be determined at a later date."

Philadelphia Energy Solutions would lease Southport's 200 acres, and later, with approval by the PRPA board, choose a terminal operator. Infrastructure for shipping shale-gas production by pipeline would not require the entire 200 acres.

Brown said all he wants is an open process and a chance to bid on Southport, adding that he had an international shipping line interested in joining his effort. He said he currently operated from the oldest facilities on the waterfront and wanted a level playing field.

If the Holts were to get Southport without a public bid, they would have a "monopoly" and control four major terminals on the Delaware River, Brown said.

"All I'm asking for is an opportunity to bid on it," he said. "If I lose the bid, I'll lick my wounds and go home, but at least I will have a fair opportunity."

Brown said Fumo "knows all the politicians. He knows basically how to get things done in the state and in the city. Who is better qualified?"

Fumo confirmed he was working with Brown as a consultant to fight any "backdoor" deals.

"As a senator, I wrote the law on the PRPA," Fumo said. "I'm very familiar with its powers, its duties. I've represented the waterfront for 31 years. I know it inside out. And I will bet you this deal will not go down as envisioned by Corbett and his henchmen. How I do it, and what advice I give to do it, and who I direct to do it, is my business and my client's business. I'm not going to give you proprietary information on how I work."

Fumo, 71, once the most powerful Philadelphia Democrat in the state Senate, served almost five years in federal prison after a 2009 conviction on charges of defrauding the Senate and two nonprofit organizations. He completed his prison sentence in February and is on probation until 2017. He is not registered with the state as a lobbyist, officials said. A lawyer, he has been disbarred.

PRPA's Kopp reiterated that no deals had been cut for a marine-terminal operator.

"When the time comes for selection of a port operator, I feel strongly that anyone interested will have an opportunity to bid. That could be John Brown, the Holt family, or someone entirely new," he said.

U.S. Rep. Bob Brady (D., Pa.), whose district includes Southport, said he "facilitated" a meeting between Philadelphia Energy's Rinaldi and the PRPA.

Brady said Philadelphia Energy Solutions "wants to do the energy piece. They don't care who the operator of the port is. They want to work in conjunction. It would be a partnership, working together with the unions and everybody involved."

The Southport site is up for grabs now because the team that won the bid in 2010 to build a container-cargo terminal withdrew after failing to secure a steamship company as a partner and investor.

Competition for business on the waterfront is always fierce. The Brown and Holt families have deep ties to the river.

Brown, whose father, Jack, built Penn Warehousing into a major paper-import business, recently secured a contract, previously held by Holt, to prep Hyundai and Kia autos arriving from South Korea on an auto lot at Pier 98 annex and process them for dealer showrooms. More than 129,000 autos rolled off ships in Philadelphia last year.

Brown's Murphy Marine Services at the Port of Wilmington is the largest banana-receiving port in North America and home to Dole Fresh Fruit and Chiquita.

The late Tom Holt Sr. entered the marine-terminal business in 1967 and built a port dynasty on both sides of the Delaware. In addition to its Gloucester Terminals, in July Holt Logistics won a bid to manage a new marine terminal in Paulsboro.

Tom Holt Jr. is a member, with Philadelphia Energy Solutions' Rinaldi, of a Chamber of Commerce "CEO Council for Growth" host committee touting the Philadelphia region as "the next energy hub."

On June 17, the PRPA board voted to undertake a public process for submission and evaluation of development projects at Southport, one official said, speaking on the condition of anonymity. The board is expected to consider at its Sept. 16 meeting whether to take bids or entertain individual proposals, the official said, noting that it could be as simple as a board vote.

State Rep. Bill Keller, a former longshoreman and a South Philadelphia Democrat who lobbied for years to assemble the acreage for Southport, said, "I would not oppose anything that brings business to the Port of Philadelphia. I'd have to look at it, but I know Phil Rinaldi and Philadelphia Energy Solutions are top-notch."

An energy port and a marine terminal "are not mutually exclusive, Keller said. "If it's a great opportunity for Philadelphia and the port, we have to take a look at it."

In April, Delaware River Stevedores and parent companies SSA Marine and Ports America Group withdrew from Southport because they could not secure a major steamship line as a partner in the finance and construction.

"To develop Southport, you're talking about a couple hundred million dollars, at least," said Robert Palaima, president of Delaware River Stevedores, which operates Tioga Marine Terminal in Port Richmond. His group initially had Hyundai Merchant Marine as a shipping partner, but Hyundai dropped out.

"Southport is a great location, and there's a lot to be said for it, but we couldn't get the commitments from any of the carriers in order to spend the money that would be required to build a terminal there," Palaima said. "It wouldn't surprise me that there are others who have different things in mind, other than the container shipping business."

Pennsylvania has invested $30 million in Southport, including demolition of vacant Navy housing and building a road that extends from the end of Columbus Boulevard into Southport.

The PRPA first sought bids for Southport in spring 2009, but tight credit and the rocky economy stalled the project. In 2010, with an uptick in shipping and the Delaware River navigation channel deepening from 40 feet to 45 feet, the project appeared to have new life.

Source: Philly.com