The Port of New York /New Jersey’s infrastructure and operational future is largely reflected in the Master Plan, a plan based on two 15-year segments that end in 2050.
The Port of New York/New Jersey’s infrastructure and operational future is largely guided by the port’s Master Plan, which as Port Director Bethann Rooney explained to the AJOT is broken into two 15-year periods, 2020-2035 and 2035-2050. “We’re a third of the way through the first phase of the master plan — and the first phase of the master plan was largely focused on maximizing the use of all of the infrastructure that we had put in place by 2020 and then beginning to optimize land use across our facilities. And that was in combination ensuring vacant parcels were leased out. If those vacant parcels did not provide any commercial maritime benefit, then look to the best of those and then optimizing the use of the remaining property.”
In real terms it meant reorganizing the property usage in a manner grouping compatible “products” or industries such as container terminal or auto processing related activities into “districts” so, rather than having “brand new import autos sitting next to scrap metal and road salt, that was adjacent to a container terminal.” And at this point, all of the autos have been removed from the middle part of the facility in Newark and Elizabeth, which is called “Port Newark South.” Additionally, PANYNJ made a commercial decision to no longer service scrap metal and Belgium block. The port now has only one remaining scrap metal operation, and they are on an expiring lease. And in so doing will create “additional space for us to provide to the container terminals or for container terminal expansion area or container support area,” Rooney noted.
Modernizing Leases
And from PANYNJ’s perspective it was a two-pronged effort, provide a lease term that would encourage the terminal operators to invest in “densification of their facilities.” The first one of these leases to be “modernized” came about with CMA CGM’s acquisition of what was previous called Global Container Terminals (GCT). The provisions in the GCT lease allowed PANYNJ to open the lease and change provisions. For PANYNJ as Rooney described it, an “opportunity to modernize our leases and to put requirements in, not only for near-terminal capacity expansion, but to determine, to compare rather, a master terminal development plan and to identify with us that when the terminal’s capacity meets a certain threshold, [triggering] additional investment that would be made in even more capacity. There are performance measures in those leases that have never existed.”
Establishing A New Tradition
In some respects, this PANYNJ approach is breaking new ground for a landlord port authority. “Traditionally, …port authorities around the world… rent the land out and collect rent but we have now modernized those leases to ensure that the property is used in the best way possible,” Rooney says of the new lease agreements. The modernized leases also readjust the port authority and tenant relationship. Rooney says, this “also means that we put into the leases that there is a responsibility on the part of the terminal operators on how they interact with the trucking community…because 85% of our cargo was out by truck, the relationships with the truckers and the trucking community is vitally important — the interaction between the trucker has to be one of essentially mutual respect, right? We’re all in this together, and if we are going to grow as a gateway, it will be good for the terminal operator, the ocean carriers, the rail carriers, the truckers, the longshoremen, the warehouse operators, and everybody else in the ecosystem. And therefore, we need to cooperate and think like strategic partners that are in this for the good of the whole.”
