An agreement announced last week by the St. Joe Company could have a major impact on the growth of the Port of Port St. Joe.
St. Joe announced that it had signed a Letter of Intent (LOI) with Green Circle Bio Energy, Inc., a maker of wood pellets used for energy, particularly in European markets.
The deal is perfect symbiosis for the companies: Green Circle Bio Energy needs sustainable forest products; St. Joe has tens of thousands of acres of timberlands.
In the LOI, Green Circle and St. Joe expressed intent in entering into a wood fiber supply agreement as part of a formal agreement still to be negotiated.
The release details that the LOI “anticipates several potential new business development opportunities to create jobs in Northwest Florida.”
Green Circle is interested in leasing a site from St. Joe along the Genesee Wyoming railline, formerly the Apalachicola Northern Railroad, to develop a wood production facility, the release continues.
Those pellets, under the LOI, would be shipped through the Port of Port St. Joe.
"The relationship between Green Circle and St. Joe is a step toward creating jobs and revitalizing the Port of Port St. Joe," said Park Brady, CEO for The St. Joe Company.
The key for the Port of Port St. Joe is that the LOI changes the dynamics on maintenance dredging, a top priority for the partners, St. Joe and the Port St. Joe Port Authority, in growing the port.
The plans to ship through the Port of Port St. Joe are contingent on the maintenance dredging which has become a top priority for St. Joe and the Port St. Joe Port Authority.
"This is exciting news for the Port Authority," said Leonard Costin, Chairman of the Port St. Joe Port Authority. "With the commitment from Green Circle Bio Energy, the Port Authority can now move forward with grant proposals for funding the ship channel dredging."
The partners in developing the Port of Port St. Joe have been lobbying the U.S. Army Corps of Engineers and the Florida Department of Transportation concerning the maintenance dredging.
A FDOT grant of some $1 million is available for the Port of Port St. Joe pending a local match. There are also some federal monies available if dredging moves forward.
St. Joe has already secured a FDOT grant for improvements to the old AN Rail line, work that should be completed sometime early next year.
The LOI with Green Circle anticipates that some time will be required to secure the permitting, permission and execution of dredging, but in the LOI the obligations of either party are contingent upon the Port of Port St. Joe receiving funding to complete maintenance dredging of the shipping channel.
And that changes the narrative for dredging. No longer is it “if” dredging is completed a customer will come. Now, the port and St. Joe can argue a customer is present and waiting.
"A viable business is ready to use the Port and rail access to the Port site is being improved; the missing link to an operational Port is the necessary dredging improvements to the shipping channel," Brady said.
The port has a navigational channel that is federally-authorized to a maximum of 37 feet. Dredging to the authorized depth has been the top priority of the Port Authority and St. Joe in luring customers.
Once dredging has been completed, the port’s options will only grow, said port director Tommy Pitts.
According to Pitts, the commitment of tonnage through the port, though still conditional, “is a phenomenally huge step in the efforts to revitalize port activity here.”
Once a commitment to dredge and the dredging is accomplished, Pitts said, other opportunities that were previously out of reach come closer.
Green Circle operates the world’s second-largest wood pellet plant in Cottondale. The company employs 81 at the plant with several hundred indirect jobs and more than $70 million injected into the local economy, according to the release.
The wood pellets produced at the new production facility can be transported via truck or railway to the Port of Port St. Joe for shipment to overseas markets, particularly Europe where the consumption of wood chips for energy is exploding.
"We are excited about the possibility of leveraging our strong presence in Northwest Florida, further job and economic development in the region, and look forward to the successful dredging improvements of the shipping channel," said Morten Neraas, CEO for Green Circle Bio Energy, Inc.
Additionally, bulk cargo port facilities are being considered for development at the port site to accommodate Green Circle's shipping needs. The Florida Ports Council, in its annual report, noted that the Port of Port St. Joe is positioned for bulk cargo shipments, offering access to rail, the U.S. Gulf Intracoastal Waterway and state and federal highways.
State and federal elected officials also weighed in on the announcement.
"This is great news for Port St. Joe and our surrounding region," said Congressman Steve Southerland. "By building upon Northwest Florida's tremendous potential, both as a world leader in biomass production and a natural fit for rail, road, and waterway shipping, The St. Joe Company and Green Circle have made an important commitment to growing jobs and strengthening our local economy."
Gov. Rick Scott this week vetoed a $2 million appropriation which would have helped the Port Authority meet mortgage requirements on the barge terminal parcel. The effort sponsored by Capital City Bank and supported by the Port Authority, was aimed at providing time and space for the port to grow. The case now returns to its previous status, heading to a Circuit Court hearing at which each Capital City Bank and Port Authority are seeking summary judgments in their favor. A court date is not known at this time.