Port development won’t come overnight but “the pieces are there.”
That was the message delivered last week to the Port Authority of Port St. Joe by Jeff Holt, Managing Director for Infrastructure Banking for the Bank of Montreal.
The Bank of Montreal was formally hired several months ago by the St. Joe Company to assist in the development of the Port of Port St. Joe.
“We are already deeply engaged and we have been for several months,” Holt said after the meeting. “We’re in for the long run and we know what it takes.”
Holt, with more than 30 years in investment banking, said a visit to the area roughly six months ago convinced him that there was potential at the Port of Port St. Joe, which at several points in its history has been an operating port but is now considered a blank greenfield slate.
“We got to like the assets a lot,” Holt said of what he called the regional “gateway” that is the Port of Port St. Joe. “We liked the gateway. That does not go away.
“We like what we see. You have all the pieces. We have to get the interest back.”
Holt said he has declined overtures for engagement from a number of ports in the United States and Canada and said there “were enough parts here” that the project to develop the port could be successful.
“It has been a successful operation in the past; you have a great local partner in the St. Joe Company. It’s really fortunate to have a company like St. Joe. It’s a flag we can wave and I think St. Joe is a good calling card. It lends gravitas to any conversation you have.”
A bulk port is likely the most advantageous route, Holt said. He also said his team was not looking for a company seeking to get into the port business, but rather an investor which has 65 port terminals around the country or globe and is looking for No. 66.
“It is a bulk opportunity,” Holt said. “The depth (of the shipping channel) doesn’t allow for much else. There is also a rail line going out the back (of the port property) and that is a good thing.”
The Bank of Montreal, he added, has a significant stable of clients it can reach.
When an investor is ready to enter the port, Holt said, would be the time to reach out to state and federal agencies to deploy their resources – expediting permitting, for example, or dredging of shipping lanes and channels by the U.S. Army Corps of Engineers.
The case can then be made to those governmental agencies, this company is coming in, will invest a specific number of dollars and the Port of Port St. Joe needs these promises and actions from government, Holt said.
“Everybody has to be a part of this, from (the Florida Department of Transportation) to the Corps,” Holt said. “It is a chicken-and-egg sort of thing. That’s the way these things work. We are trying to provide exposure for the (investors) and bulk operators to what is there.”
Port director Tommy Pitts, at the suggestion of Holt, said it would be time to re-energize past efforts to have the shipping channel dredged to authorized depth.
The job for the bank was to advise not just on bringing in an investor or company, but also in how to craft the deal. The bank is working on a “success-fee” basis, essentially putting much of the risk on the bank.
“But we like what we see,” Holt said.
The bank’s contract with the St. Joe Company is exclusive, Holt said, but the partnership to collaborate on port development between the company and Port Authority meant that at some point, once potential clients are ferreted out, the Port Authority must be part of the discussion.
Aspects of operation such as licensing, tax exemption financing, wharf and service fees fall under the gateway and the public authority overseeing that gateway, in this case the Port of Port St. Joe.
“You have a big part to play here,” Holt told Port Authority board members. “The question is if we can put a fish on the hook and what the fish would want.
“What we are charged with is turning on the light in this gateway. Not only for the benefit of the company, but also you. We want to do everything we can to continue to develop the port.”
Holt and St. Joe senior vice president Jorge Gonzalez both emphasized that the gateway of the Port of Port St. Joe was a part of a broader effort to maximize the potential of the region.
And in developing that gateway, the Port Authority and its land – which combined with St. Joe’s holdings around the port account for more than 300 acres, with a rail line – are essential to the equation.
“We’ve been focused on the big dog, not just the little dog,” Gonzalez said, emphasizing the partnership between company and Port Authority. “The Port Authority asset is going to be something folks are going to look at. They have to.”
Holt, noting that most large ports are near metropolitan areas, said he expects that an investor will be one looking for “low-hanging fruit” or a port with a largely untapped potential that would likely provide added value at a relatively low price.
“I am encouraged by what you are saying,” said Port Authority president Leonard Costin.
Holt said it was also important not to expect results, like, next week.
Holt’s team is close to a deal to sell or lease the Port of Wilmington (Delaware) that it has been working on for two years and had recently completed a deal to run rail line through to the Port of Los Angeles, a $2 billion venture, that took some six years.
“This is probably not going to happen overnight,” Holt said. “We have a sense of what can work and can’t work. I am not a stranger to long lead times and patience.”