Port expansion really means state entering new market

CHARLESTON, S.C. - It's an ambitious plan, building two steamship terminals in two different areas of South Carolina at an initial cost that could approach $1 billion.

But in size and scope, what the State Ports Authority is proposing is not terribly larger than envisioned a decade ago with the ill-fated Global Gateway Terminal on Daniel Island.

However, in planning terminals both in Charleston and now Jasper County, the agency is expanding to serve a market it has never served - Savannah, Ga., and nearby communities.

"The Savannah River market and the Charleston market are two distinctly different markets. We don't see this as taking away from Charleston," said Harry Butler Jr., the chairman of the State Ports Authority.

In the future, ports on both sides of the river could even foster cooperation between South Carolina and Georgia, which have been fiercely competitive over port business.

"World trade is growing at double-digit rates. I think both states can win if they find some cooperative way to work," said Doug Woodward, a research economist at the Moore School of Business at the University of South Carolina.

He noted that ports, historically, have prompted states to work together.

"That's why New York and New Jersey have a ports authority," he said. "These rivers don't respect state boundaries."

The Global Gateway - at the time expected to cost $1.2 billion - was projected to have as many as 12 steamship berths. The plan was scuttled when, after public opposition, state lawmakers directed a terminal be built at the old Charleston Naval Base.

The State Ports Authority is now pursing permits to build a $500 million terminal at the old base.

It also wants to build on an almost 1,800-acre site on the Savannah River where Jasper County has been pursing plans to build with a private port developer. That tract has enough space for 11 berths.

The authority has said that, if an agreement can't be reached, it will condemn the land owned by the Georgia Department of Transportation used as a dredge spoils site for dumping silt from deepening the Savannah River shipping channel.

Jasper County, meanwhile, has started its own condemnation.

The Georgia Department of Transportation rejected the county's offer to buy the land because there is not enough information to guarantee there will still be a spoils site, said Russ Willard, a spokesman for the Georgia attorney general's office.

Unless those concerns are met, he said, it's likely the state will oppose the condemnation.

The South Carolina State Ports Authority, meanwhile, has asked the state Supreme Court for a ruling that it, not Jasper County, has the right to develop the property for a steamship terminal.

The county's condemnation is unlikely to be successful, said Tom Davis, a former aide to Gov. Mark Sanford and a nominee to the South Carolina State Ports Authority board.

"You need to have the standing of the state," he said. "To make a port a reality in Jasper, you're going to need the stature or authority that the ports authority has."

State Sen. William Mescher, R-Pinopolis, was one of several lawmakers who opposed the Global Gateway. But he likes the idea of the State Ports Authority building on the Savannah River.

"I think it's wise on their part. I'm just surprised they waited so long," he said. "If I had been involved with the State Ports Authority, I would have said it looks like there is going to be a port down there. And if there is going to be a port, it should be ours."

Butler said the authority will consider both public and private financing.

"We have always in the past used private sources to finance some of what we have done," he said. "We are very open and our governor is very open to the idea of public-private financing. It might be a little different in Jasper County because a private company has already expressed a willingness to put the dollars up."

Jasper officials have agreements with a subsidiary of private port developer SSA Marine to build a $450 million terminal. During a tour of the site with journalists several years ago, lawmakers estimated total build-out of the property could reach $2 billion.

The South Carolina side of the river is undeveloped so workers who live in Savannah and Georgia would immediately benefit from a terminal, Woodward said.

"If people just drive across that bridge into Jasper County every day to work and take their paycheck back to Georgia, that's a real leakage," he said. "That's a very tricky aspect of this."

While there will likely be turf battles, he eventually sees the states cooperating. "We have to look at our port authority less as a state asset and more as a regional asset, which it is," he said.

Mescher also sees the possibility of cooperation.

"It might resolve the issue that Georgia owns the property and South Carolina wants to build a port on it," he said. "It would be a perfect marriage."

The Georgia Port Authority has said it will honor an agreement with the U.S. Army Corps of Engineers to use the Jasper land as a spoils site.

"This is the current purpose of the land and we plan to follow the law and our obligation," said Robert Morris, a spokesman for the Georgia authority.

But Butler said there are other areas to dump dredge spoils.

"There are alternate sites where that could be done," he said. "We find it hard to believe it can only be done on this property, which also happens to be the best deep-water site for a port."

Woodward said a new port will prove good for both sides of the river. But, he cautions, "the economics are one thing, the politics are another."