PORT OF OAKLAND TO CREATE NEW MEGA-TERMINALTO ENHANCE COMPETITIVENESS
Port Settles
Litigation To Achieve Long-Term Revenue Stability And Jobs
The Oakland Board of
Port Commissioners unanimously approved a litigation settlement agreement with
SSA Terminals, LLC and SSA Terminals (Oakland), LLC (collectively, “SSAT”), one
of the Port’s major long-term seaport tenants. The settlement involves four of
the Port’s seven marine terminals, and will create operationally the 3rd
largest terminal on the U.S. West Coast. In terms of size and operational
efficiencies, this new “mega-terminal” will be more in line with competing
terminals, allowing the Port to sustain and attract more maritime cargo, which
currently supports approximately 40% of the 73,000 jobs the Port generates
annually in the region.
“We reached this litigation settlement to protect the Port’s long-term viability as a job-creating economic engine for this region,” stated Port Board President Cestra “Ces” Butner.
The four terminals involved in the agreement are located
along the Inner and Middle Harbors: Howard Terminal (Berths 67-68); Global
Gateway Central terminal (GGC; Berths 60-63); Oakland International Container
Terminal (OICT; Berths 57-59); and Total Terminals International terminal (TTI;
Berths 55-56). Under the settlement, SSAT will lease Berths 57-59 through 2022
at current rates and conditions; terminate its lease for Howard Terminal
effective September 30, 2013; and dismiss its lawsuits against the Port.
Additionally and independent of the settlement agreement, the TTI lease will be
assigned to SSAT through 2016, with one option to extend to 2022.
The settlement involves short-term revenue loss in
exchange for longer term revenue growth and stability. Prior to this agreement,
the Port was facing the expiration of all four terminal leases along its middle
and inner harbors in 2016-2017. Further, those leases all had very short
renewal notification periods, leaving the Port vulnerable in the event one of the
operators decided not to renew its lease. The settlement and the independent
assignment of the TTI terminal lease to SSAT create a 350-acre mega-terminal,
which is far more optimal than several smaller terminals in today’s competitive
maritime market.
The Board carefully considered over many months how to
move forward relative to a potential settlement with SSAT and a reconfiguration
of the marine terminals over many months. The Port formed an Ad-hoc Committee
of Commissioners Alan Yee, Ces Butner, and Bryan Parker to study and evaluate
the alternatives available to the Port for settlement. These Commissioners and
staff dedicated countless hours to this important endeavor. Given the realities
of the Port’s current market position and growing competition in the maritime
industry, this agreement provides the Port with important competitive benefits
and future opportunities that will facilitate the efficient flow of cargo
through these terminals.
Commission President Butner added: “This is a fair deal
and creates a lease in line with current market realities. This agreement,
along with other transformative projects like the City/Port Oakland Army Base
redevelopment, is key to long-term economic growth in and around the Port
because it will make us a more competitive gateway.”
About the Port of Oakland:
The Port of Oakland oversees the Oakland seaport and
Oakland International Airport. The Port's jurisdiction includes 20 miles of
waterfront from the Bay Bridge through Oakland International Airport. The Oakland
seaport is the fifth busiest container port in the U.S.; Oakland International
Airport is the second largest San Francisco Bay Area airport offering over 300
daily passenger and cargo flights; and the Port’s real estate includes
commercial developments such as Jack London Square and hundreds of acres of
public parks and conservation areas. Together, through Port operations and
those of its tenants and users, the Port supports more than 73,000 jobs in the
region and nearly 827,000 jobs across the United States. The Port of Oakland
was established in 1927 and is an independent department of the City of
Oakland.
Labels: Ces Butner, LLC, Oakland Board of Port Commissioners, port of oakland, Port Settles Litigation, SSA Terminals
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