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Project Profile: Seagirt Marine Terminal

Seagirt Marine Terminal - Baltimore, Maryland

photo credit: Maryland Port Administration

Location

Baltimore, Maryland

Project Sponsor / Borrower

Maryland Department of Transportation / Maryland Port Administration

Ports America Chesapeake, LLC

Program Areas

P3Project FinanceValue Capture

Mode

Intermodal

Description

Seagirt Marine Terminal is a 284-acre dedicated container terminal that handles 97 percent of container volume at the Port Baltimore. Opened in 1990, it currently handles an annual volume of 1,000,000 twenty-foot equivalents (TEU) and has the highest vessel productivity rates in the country with 38 moves per hour. The Port of Baltimore is one of four ports on the East Coast served by a 50-foot channel, allowing it to accommodate post-Panamax ships.

In late 2009, the Maryland Port Administration entered into a 50-year long-term lease concession with Ports America Chesapeake to operate and maintain Seagirt Marine Terminal and make certain capital investments over the life of the lease. Ports America also provided an upfront $140 million payment to the state to support highway, bridge, and tunnel projects serving the Port of Baltimore area. This asset recycling element of the deal has helped fund improvements along I-95 and US 50.

The long-term lease concession involves operation of existing terminal assets, which include three berths, seven container cranes, and 12 gantries. The private partner also agreed to construct a fourth berth (Berth IV) with capacity to accommodate post-Panamax ships. This $100 million expansion was completed in 2014 and added 4 additional container cranes 10 gantry cranes. Beyond the upfront investment in highway infrastructure and Berth IV expansion, the deal, valued at nearly $1.5 billion, includes annual lease payments to the state, a per-container fee on all movements over 500,000 annually, maintenance activities, and additional capital investments in technology and capacity.

Cost

$1,465 million - Estimated revenue and benefits accruing to the state over the 50-year lease term

  • $140 million - Upfront concession payment to MDOT to reinvest in bridges, highways and tunnels near the Port
  • $100 million - Capital investment in Berth IV development
  • $290 million - Estimated annual lease payments ($3.2 million), escalating beginning in year 5
  • $465 million - Estimated variable payment levied per container moved in excess of 500,000 annually ($15)
  • $260 million - Estimated future maintenance expenditures
  • $210 million - Capital investments (technology and capacity, excluding Berth IV build out) and attendant economic development benefits
Funding Sources

Concessionaire's financing

  • Economic development revenue bond issue (Series A senior lien, Maryland Economic Development Corporation conduit issuer on behalf of Port America Chesapeake, LLC) - $170 million
  • Economic development revenue bond issue (Series B second lien, Maryland Economic Development Corporation conduit issuer on behalf of the concessionaire) - $89 million
  • Equity - $75 million
Project Delivery / Contract Method

Long-term Lease Concession (50 years)

Private Partner

Ports America Chesapeake, LLC - part of Ports America Group owned by

  • Highstar Capital (90%)
  • Canada Pension Plan Investment Board (10%)
Project Advisors / Consultants

To Maryland Port Administration

  • PFM Group - Financial Advisor
  • Laurie Mahon - Financial Advisor
  • K&L Gates LLP - Legal Advisor
  • McKennon Shelton & Henn LLP - Legal Advisor
  • AECOM - Technical Advisor
  • Moffatt & Nichol - Technical Advisor
  • Martin Associates - Economic Advisor

To the concessionaire

  • Not available
Lenders

Bondholders

Duration / Status

Preferred bidder selected November 20, 2009

Maryland Board of Public Works approval December 16, 2009

Concession conclusion 2060

Financial Status

Financial close January 7, 2010

Ports America used the Series A bond issue to fund the $140 million upfront concession payment to the Maryland Department of Transportation. The concessionaire used the remaining Series A bond proceeds, the Series B bond proceeds and equity to fund capital and operation reserve accounts and pay for transaction fees and preliminary capital expenditures.

Innovations
  • Innovative mix of long-term lease commitments by the concessionaire in exchange for the right to operate the facility, including: annual payments, maintenance commitments, significant capital investment, and an upfront payment to the state invested in regional highway infrastructure, making the deal an example of asset recycling.
Related Links / Articles

Port America Chesapeake - Seagirt Terminal Info

Maryland Port Administration
Contacts

Bayard Hogans
Vice President, Ports America Chesapeake
Tel: (410) 649-7631
bayard.hogans@portsamerica.com

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