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Port Finance late 2016 authorization, the port has embarked on an expan-

P3 in Practice

The roster of projects in south Florida (a P3 friendly state), sion plan (with completion in 2022) that includes dredging to from the bigger access projects to the very specifc business- deepen its entrance channel and turning basin from its pres- related efforts, provides a good example of how varied funds ent 42 feet depth to 50 feet. The estimated $374 million cost sources – including those from the private sector – can be is set to split mostly between the Federal government and combined. In Miami, the new tunnel for trucks opened in the Port, with money generated solely from user fees. The mid-2014, nearly four years after construction began. The state is contributing a small amount towards design. In late tunnel, which links the interstate highway network directly May, Port Everglades announced plans for a $437.5 million with the containership berths on Dodge Island, enables trucks expansion project where new berths for larger vessels would to circumvent the congested downtown streets. A ‘win-win’ be added (alongside an expanded turning area), and crane rail for everyone. infrastructure for new Super Post-Panamax cranes on order

Financing for the tunnel was done through a web of highly would be added. complicated deals. In classic PPP style (a structure known Port Everglades has now received approvals from Broward as “Design-Build-Finance-Operate-Maintain,” where con- County for its Port Everglades International Logistics Cen- struction risk stays with the private participants), an investor ter, LLC (PE-ILC), a foreign trade zone (FTZ) that will be consortium, consisting of Meridiam Infrastructure (a fund completed in 2019, replacing an obsolete facility. The port, packager which raises money from institutional investors) and which encompasses Hollywood, Dania and Fort Lauderdale,

Bouygues (a construction behemoth worldwide, with head- is no stranger to P3 arrangements. Steven Cernak, the port’s quarters in France) owner of the project’s equity, constructed President and Chief Executive Offcer, told MLPro, “One of the tunnel (and then got paid). most successful public-partner partnerships has been with the

The State of Florida, through its Department of Transporta- Florida East Coast Railway and the State of Florida.” tion (FLDOT), paid for 50% of design/construction (handled Mid-2014 saw the opening of an Intermodal Container by the construction division of Bouygues), originally pegged Transfer Facility (near dock rail) that brings containers close at around $670 million. The remaining 50 percent of the de- to the berths via the FECR, instead of draying them through sign/construction costs were divided up between Miami-Dade a congested part of Fort Lauderdale. In this deal, as described

County (which oversees the port in its role as a “landlord”) by the port, “Port Everglades contributed 42.5 acres of land and the City of Miami. The operations and maintenance are … valued at $19 million. Construction costs are estimated to subcontracted to a private “concessionaire” until 2044, when total $53 million, which will be paid through $18 million in ownership reverts back to FLDOT. According to the US DOT, grants through FDOT’s Strategic Intermodal System program, total capital cost of the project was $1.1 billion, and total pay- a $30 million FDOT State Infrastructure Bank loan, and $5 ments (including annual “Availability Payments” paid each million from FECR’s capital plan. Mr. Cernak, who is also year to the private concessionaire) are estimated to be $2.65 Chairman-elect of the AAPA, noted: “Together, we were able billion – much of it coming from the state. The private in- to build a 43-acre Intermodal Container Transfer Facility that vestors – insurance companies and pension funds who have can handle both domestic and international freight.” invested through the Meridiam Infrastructure North America In the new PE-ILC transaction, a long time tenant at the ex-

Fund – see their return over decades. isting FTZ, International Warehouse Services, Inc. (IWS) will

Separately, and to accommodate the bigger post-Panamax be leasing a newly constructed facility which will offer a wide vessels, a $220 million dredging project for deepening the range of logistics services, including 3PL warehousing, gov- channel to 52 feet, was paid for by the state ($112 million), ernment inspections, and refrigerated storage. Eric Swanson, with Miami-Dade County investing the $108 million balance. Florida-based Principal at Treadwell Franklin Infrastructure

The state also contributed $20 million, approximately half the Capital, LLC (TFIC), described his frm’s role, saying, “TFIC cost of four new cranes, with a reach of 22 containers, to serve is focused on the development of projects that are related to the larger vessels. A related project – this one to improve in- core infrastructure such as seaports, airports, and other transit termodal freight connections – linking the port with the rail nodes. Our role is to structure, lead and manage the transac- network, was paid for jointly by the state, the Florida Depart- tion, including attracting the appropriate fnancing.” ment of Transportation (FDOT), and the Port of Miami. TI- The deal’s structure sees a major private component, with

GER grants played a role in funding this project, and privately Mr. Swanson telling MLPro, “The local partnership that in- owned Florida East Coast Railway also provided capital. cludes TFIC, IWS and ANF Group (a construction company)

Further up the coast, at Port Everglades, which is operated is doing the predevelopment work and will attract equity and by Broward County, expansion is in the works. Following a debt fnancing to the project. The project is a 30-year lease 26 Maritime Logistics Professional May/June 2017 | |