Expect the debate over the future of the Port of Pensacola to heat up when the Mayor’s Port Advisory Committee and the Pensacola City Council see the latest report from Dr. Rick Harper of the University of West Florida Haas Center for Business Research and Economic Development.
Economists and economic development experts interviewed by Harper don’t believe the Port can be a moneymaker.
At the request of the advisory committee chairman, Dr. Harper talked in early June 2011 with several economists and economic developers around the state about the economic development prospects of the Port of Pensacola.
They included:
• Dr. Bob Cruz, Chief Economist with Miami-Dade County, expert in economic impact,
• Dr. Tony Villamil, Principal at WEG (Coral Gables) and former head of OTTED and the US BEA,
• Dr. Dale Brill, former head of OTTED, current President of FL Chamber Foundation,
• Dr. Hank Fishkind, Principal at Fishkind Associates, Orlando.
According to Harper, these experts don’t see potential to turn the Port into a moneymaking enterprise for the City.
“Apart from the issues of positive cash flow to the Port enterprise account, that they do not see near- to medium-term potential for job creation associated with the current use of the property. This is because most of the economic activity associated with the Port occurs away from the Port (i.e., where the chickens are produced, where the road builders spend their income), and locals that do use the Port for shipping have other alternatives that are unlikely to damage their business profitability.â€
What did the experts say?
Hank Fishkind: His instant characterization was of an asset that doesn’t work in its current configuration and can’t get better due to its location and inadequate local non-port infrastructure (particularly transportation and market access). He thinks this would be true even if Pensacola put in the $50 million (his number) necessary to install container cranes, other equipment, and warehouses. His instant response was to focus on non-industrial marine development.
Tony Villamil: Overall not favorably inclined towards the future of the Port, and does not think that growth in international trade and widening of the Panama Canal will create previously unknown opportunities. The main reason he gave is that much of local value-added for a community comes from “cracking the boxes,†or taking inbound or outbound containers of products and repackaging, handling or otherwise processing them so as to create local jobs and add value locally. He doesn’t see this happening in the City of Pensacola.
Dale Brill was the most favorably inclined of the group to see economic potential in traditional seaport usage of the Port of Pensacola in coming decades. He termed a move to residential or mixed use development of some or all of the Port property as “a wrong step towards the Old Florida,†and suggested that non-shipping uses would “lock Pensacola into an old economy model.â€
Bob Cruz asked if any of the shippers affect the local economy, as this would be his litmus test for value. He doesn’t see much of a future for the Port of Pensacola unless there are bottlenecks in port capacity elsewhere along the central Gulf coast. He emphasized that for a port to be viable, it has to be cheaper than alternative locations. He sees the natural market as being for Caribbean cargoes.
What was Harper’s conclusion?
“It would be fair to say that the experts agree that there are not easy and obvious fixes for a Port that doesn’t already have trade-ready businesses on the tax roll in the City. Without a willingness of the jurisdictions that potentially use seaport services to share in the financing, the cost will continue to fall on City taxpayers.
It is also fair to say that the response of these experts was to avoid giving up the core maritime industrial asset until there is demand for it to be put into specific alternative development uses.
Perhaps the risk-minimizing strategy for the City would consist of several things that were suggested by respondents. One would be to attempt to put some consistency in timing into the leases of port users upon renewal, so that the maximum amount of contiguous property would be available as the leases turn over.
Another would be to make parcels on the north edge of the Port available for development by private investors so as to test the waters for alternative high-value uses for this taxpayer asset.”
The next meeting of the Mayor’s Port Advisory Committee is Tuesday, July 12, 2 p.m. in the Whibbs Conference Room at City Hall.
Read full report: Harper report on interviews about Port