Virginia Port Authority Floats Ambitious Plan for Future
As recently as two years ago, the Virginia Port Authority was losing millions of dollars annually. Now that the port's administration has gotten back to a break-even point, the board of directors is charting an ambitious course that projects to create hundreds of thousands of jobs around the state in the next half-century.
CEO John Reinhart and Chairman of the Board John Milliken, who both took their positions with VPA in early 2014, met with the Daily Press Editorial Board on Nov. 15 to discuss long-range plans for major state-funded improvements at VPA's Norfolk International Terminal and a $320 million investment to be funded by the private owner of Virginia International Gateway.
RELATED: Port of Virginia signs $217 million deal to acquire automated cranes
That investment is part of a recent extension of VPA's current lease through 2065, with an option to buy at the conclusion.
"We've reached the stage of development in our commitment where, we were previously losing money hand over fist, but now we are stable and sustainable," Milliken said. "We developed a plan from last year, and we are in the early stages of implementing it."
Milliken stressed that the port's mission is not to turn a profit, but to "foster economic development and create jobs" in the Hampton Roads region and around the state.
RELATED: Port of Virginia reports another single-month record for container volume
Toward that end, the port recently began construction of new facilities to expand its capacity, and while those buildings are not scheduled for completion until mid-2019, that additional space is already being marketed.
The Virginia Port Authority's primary facilities are the Newport News Marine Terminal, the Norfolk International Terminals and two in Portsmouth — the Virginia International Gateway and the Portsmouth Marine Terminal.
A study earlier this year by economists at the College of William and Mary estimated that the port created more than 20,000 jobs, ranging from harbor operations, warehouse personnel and support staff, and truck drivers who move cargo and containers to and from the port.
Reinhart said companies are establishing warehouse space on the Peninsula and in South Hampton Roads and effectively "betting that they're going to have a tenant." He said warehouse availability costs half as much on the East Coast than on the West Coast, and that the peninsula's easy access to rail traffic makes the Newport News port a vital hub to move cargo and containers not just through the state, but across the South and to the Midwest.
"Our growth area is really in the Midwest," Milliken said. "The rail hubs in Ohio and even to Memphis and Chicago and St. Louis — we've got the rail access to service that market."
Reinhart described a 650,000-pound piece of equipment, for use in a power plant, that recently shipped through the peninsula because the region's rail access was convenient for the specialized cars used to move the piece to its ultimate destination in Emporia.
As construction gets underway on the expanded facilities, Milliken said the port is working with local economic development agencies to market the region. Cathie Vick, the port's chief public affairs officer, said VPA representatives attend trade shows across the country to learn as much as possible about the needs of shipping companies and of the businesses that use them.
Reinhart and Milliken stressed the many advantages that Virginia's ports offer to shipping companies — including some of the deepest waters along the East Coast, which can accommodate larger ships, and a near even balance between imports and exports, which makes for quicker turnarounds on incoming ships.
"We are actively marketing that new space," Milliken said. "You have to get it across to these companies that right now our capacity is X-Y-Z, but pretty soon it will be X-squared, Y-plus-2 and Z-increased. We're working now to market what we will have available three years from now."
