State OKs plan to finance car terminal Fla. firm would benefit

rival to contest deal

The port

September 24, 1998|By Robert Little | Robert Little,SUN STAFF

State officials approved plans to build and lease a new automobile terminal at the port of Baltimore to a Florida-based distri- butor yesterday, a deal that one private terminal operator has called anti-compet- itive and promised to contest before the Federal Maritime Commission.

The Maryland Board of Public Works approved the lease with ATC Logistics Inc., conditioned on changes that would allow for its review if construction costs at the terminal rise too high. Opponents argued that soil contamination at the Brooklyn-area site could more than double the estimated $18.6 million cost of developing it.

Yesterday's unanimous vote means that the Maryland Port Administration, after revising the lease, can seek bids from developers to turn the 50-acre "Masonville" site into a marine terminal for loading and unloading automobiles. If the bids exceed 120 percent of the expected cost, the Board of Public Works will review the plan again.

"It's our responsibility to run this port in a financially sound manner, to make responsible improvements, and I think that's what we're doing here," said state Treasurer Richard Dixon, one of the board's three members.

Officials for the MPA, which manages the state's public marine terminals, argued that construction costs will be repaid by the lease payments from ATC -- an average of $146,000 a month for 20 years. The company claims it can sign contracts to handle 60,000 vehicles in its first year of operation and 125,000 or more after three years.

Those claims raised the strongest objections from the deal's opponents, who argued that the state is underwriting a private company that will compete against established Baltimore businesses.

Officials with Hobelmann Port Services and Premier Automotive Services, which operate private cargo terminals in the port, said they have excess capacity now and that ATC will simply take away their business.

ATC, based in Jacksonville, Fla., operates port facilities in Mexico and has routes in the United States moving automobiles by truck. Its lease with the state requires the company not to take cargo away from other operators, but even Gov. Parris N. Glendening, a proponent of the deal and also a member of the Board of Public Works, called the clause essentially meaningless.

"Quite candidly, I don't know how the provisions make any sense and I don't think they're enforceable," he said. The companies will have "straight competition."

Opponents jumped on that comment as proof that the state is treating them unfairly.

"The governor basically said, 'We don't care, we'll subsidize your competition, and good luck.' And we will sue on that basis." said Timothy J.M. Chadwick, chief executive of Hobelmann.

While the Federal Maritime Commission grants limited antitrust immunity to deals struck between public ports and private operators, some companies have won concessions from the commission when they prove the deals are unfair.

Late last year, the commission ruled that the MPA unfairly discriminated against Ceres Marine Terminal by offering price breaks to a competitor. The ruling is on appeal in federal court, and could cost the state millions of dollars if upheld.

Port officials said the ATC deal will not pose similar complications.

"It's right in line with what we charge all our customers at the port," said James J. White, acting MPA executive director. "We're on solid ground with the competitiveness issue. This lease is very competitive."

Pub Date: 9/24/98

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