The state Board of Public Works approved Wednesday a 50-year lease that will allow a private company to manage operations at the port of Baltimore. Officials say the deal will generate at least $1.3 billion and 5,700 new jobs.
As part of the agreement, Ports of America Group will create a 50-foot-deep berth and purchase four cranes to help prepare Seagirt Marine Terminal for larger cargo ships that are expected after widening of the Panama Canal is completed in about four years.
The deal was announced about a month ago. At the Wednesday public works meeting, Comptroller Peter Franchot, one of three members of the state spending panel, questioned the wisdom of the deal but voted for it along with Gov. Martin O'Malley and Treasurer Nancy K. Kopp.
Franchot said he was "concerned that we'll be worse off than we are now" if Ports of America's owner, Highstar Capital, decides to sell the company.
Christopher Lee, a Ports of America official, said that it is Highstar's intention to sell Ports of America in five to seven years, but he assured the state officials that whoever becomes the new owner, the Baltimore port would be "in good hands."
O'Malley also said Maryland has the right of first refusal when Highstar sells, meaning the state can buy back Seagirt.
Franchot said he was satisfied, adding, "I think this is a good deal," before approving it. O'Malley said the state "desperately needs" the jobs the lease will bring.
Once financing is completed, Seagirt's current owner, the Maryland Transportation Authority, will receive a payment of $100 million that can be used for roads, tunnels and bridges. The state also will receive 65 acres at Dundalk Marine Terminal.
State officials anticipate the creation of 3,000 construction jobs for the terminal and port expansion and another 2,700 permanent jobs to accommodate increased traffic from the larger ships.
In a letter endorsing the deal, the chairmen of the spending committees in the House of Delegates and the Senate wrote that the lease "represents a tremendous benefit to the state."
"We continue to cautiously approach [public-private partnerships], recognizing that on a case-by-case basis, [they] can be an important tool in maintaining and improving state infrastructure," the letter stated.
O'Malley called the deal an exemplary partnership, contrasting it with earlier projects across the nation where states sold highways to private companies that drastically increased tolls and let maintenance lapse. "This addresses all of the shortcomings," he said.