Planned private port sparks controversy in Savannah

Marine terminal located downriver from the Georgia Ports Authority was once an environmental wasteland
SAVANNAH, GA - JANUARY 29, 2024: Four vertical wells stand on the edge of a 750 acre marsh that borders the SeaPoint property. SeaPoint donated the marsh to the state and continues to monitor for any contamination. (Stephen B. Morton for the AJC)

Credit: Stephen B. Morton for the AJC

Credit: Stephen B. Morton for the AJC

SAVANNAH, GA - JANUARY 29, 2024: Four vertical wells stand on the edge of a 750 acre marsh that borders the SeaPoint property. SeaPoint donated the marsh to the state and continues to monitor for any contamination. (Stephen B. Morton for the AJC)

SAVANNAH ― A privately owned marine shipping terminal is planned along the Savannah River at a once-polluted site downstream from Georgia Ports Authority facilities, a multibillion-dollar project that has drawn objections and suspicion from state officials at the nation’s third-busiest port complex.

The SeaPoint Industrial Marine Terminal features more than a half-mile of riverfront and sits more than 5 miles closer to the Atlantic Ocean than the sprawling Ports Authority terminals located west of downtown Savannah. Engineers are designing a dock wall to serve a facility fit to handle a “broad range of maritime transported goods and materials,” with construction expected to begin later this year.

SeaPoint’s owner, Savannah businessman Reed Dulany, is seeking a tenant for the 226-acre site and is building the berth infrastructure to make the property more attractive.

SeaPoint’s cargo mix could include containers, which has drawn the Ports Authority’s ire.

SAVANNAH, GA - JANUARY 29, 2024: SeaPoint Industrial Marine Terminal bought the former Chemical processors site that had manufactured titanium dioxide and spent $38 million dollars to turn the brownfield into a viable commercial property. The last operator, Tronox, went bankrupt in 2010, and the federal government declared the property one of the most polluted wastelands in the nation and unfit for redevelopment without extensive remediation. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

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Credit: Stephen B. Morton for The Atlanta Journal Constitution

The Ports Authority is currently expanding capacity by converting one multiuse property, Ocean Terminal, into a container-only site and building another container-specific facility on land nearby. President and CEO Griff Lynch told the authority board this week about plans to invest $4.2 billion on expansion over the next decade.

Georgia’s ports are huge economic drivers. The Savannah terminals and other Ports Authority facilities support 561,000 jobs across the state and contribute $59 billion annually to Georgia’s gross domestic product, a recent study showed. The ports’ business has nearly doubled over the past decade.

The Ports Authority’s stated reason for protesting development of a container terminal at the SeaPoint site is not concern over competition for business but the effect of SeaPoint-related rail and road traffic on the Savannah community. If built, cargo-carrying trucks and trains would have to travel through the densest parts of Savannah, including its bustling tourist district, to reach connecting interstates and rail lines west of the city.

The Ports Authority’s pushback has already nixed one tentative deal to build a container terminal on the site. As plans for the ship berth begins, there remains uncertainty about what kind of user — a manufacturer, a bulk cargo trader, a logistics company or a container terminal operator — would be best for the site.

Interest in the property is high, with the Savannah Economic Development Authority confirming that at least three suitors are considering the site. None of the prospects are in the container shipping business.

Those potential tenants were drawn to what SEDA President and CEO Trip Tollison described as a “monumental project” because of a hard-to-find combination of attributes. The property is large and zoned for heavy industry, and it is located in a tax-friendly federal opportunity zone with most of the necessary infrastructure and deepwater access.

“There is no other site like it in the Southeast,” Tollison said. “You can do so many things there that you just can’t do anywhere else.”

SAVANNAH, GA - JANUARY 29, 2024: Some of the metal infrastructure still stands after SeaPoint spent $38 million dollars on removing the contaminated soil from the site once listed by the federal government as one of the most polluted wastelands in the nation. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

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Credit: Stephen B. Morton for The Atlanta Journal Constitution

Vision for a ‘flexible canvas’

SeaPoint’s proximity to the ocean is its greatest selling point.

The project is farther east than the state-owned terminals and downstream from the Talmadge Bridge, an impediment to a growing number of ships too tall to squeeze under its span. The Georgia Department of Transportation recently started a project to raise the bridge’s roadway by as much as 20 feet and has future plans to replace the bridge either with a new, much-higher span or a tunnel under the Savannah River ― initiatives championed by the Ports Authority.

SeaPoint’s location east of the bridge prompted the Ports Authority to study the site for a container terminal, even signing a purchase option for the property in 2017.

The authority later abandoned the idea, citing an estimated $4.2 billion cost as well as concerns about the difficulty in creating a ship-turning basin near the site and the impact of port-related truck and rail traffic on downtown Savannah. Without a turning basin near SeaPoint, container ships would have to sail upriver to the Garden City Terminal to be spun around, negating one of the downriver advantages of a location avoiding the Talmadge Bridge.

The Ports Authority wasn’t the only prospect for the site, and Dulany had been marketing it for a variety of uses. The challenge at the time, though, was the property’s condition.

SAVANNAH, GA - JANUARY 29, 2024: SeaPoint Industrial Marine Terminal owner Reed Dulany stands on the bank of the Savannah River on part of SeaPoint property that features more than a half-mile of riverfront. The proposed terminal sits more than five miles closer to the Atlantic Ocean than the Georgia Ports Authority terminals located west of downtown Savannah. (Stephen B. Morton for the AJC)

Credit: Stephen B. Morton for the AJC

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Credit: Stephen B. Morton for the AJC

Chemical processors had manufactured titanium dioxide, a whitening chemical used in products such as toothpaste and foods, on the site for half a century. The last operator, Tronox, went bankrupt in 2010, and the federal government declared the property one of the most polluted wastelands in the nation and unfit for redevelopment without extensive remediation.

“The site looked so bad,” Dulany said. “It was like walking somebody through a derelict house and telling them your vision for a restoration. Some people can see it, but most can’t.”

The contamination was so extensive Dulany and other prospective buyers had to be vetted by the Georgia Environmental Protection Division, the U.S. Environmental Protection Agency and the U.S. Department of Justice. The remediation, completed in 2022, cost $38 million.

As crews cleaned up the site, Dulany secured a permit for SeaPoint that would allow for the construction of a ship berth. SeaPoint is a “flexible canvas” meant to be as attractive to as many prospective tenants as possible, Dulany said.

He envisions the property being developed into a combination marine terminal, manufacturing facility and logistics hub, with the buyer needing onsite access to a ship berth.

SeaPoint also has the potential to be an environmentally friendly terminal, with an existing solar farm and sulfuric acid processing plant producing enough electricity to make the site energy neutral.

SAVANNAH, GA - DECEMBER 17, 2021: Longshoremen load and unload containers at the Georgia Ports Authority Garden City Terminal. Recently, in coordination with the U.S. Department of Transportation, the Georgia Ports Authority improved its cargo flow by increasing rail capacity and activating flexible Òpop-upÓ container yards near manufacturing and distribution centers. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

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Credit: Stephen B. Morton for The Atlanta Journal Constitution

A ‘relief valve’ for the Ports Authority

Container shipping companies recognized the site’s advantages, and at least two expressed interest in developing the property for that use. A private container terminal locating close to a state ports authority facility is not unprecedented. The ports in Baltimore, New Orleans and Norfolk have both private and public terminals.

But the Ports Authority expressed concerns about SeaPoint at a time of expansion for the state complex. Its Savannah-based terminals handled 5.4 million equivalent container units last year, and the Ports Authority is expanding capacity to 10 million containers, all at a time while SeaPoint is marketing its site as capable of moving 2 million units a year.

The Ports Authority’s Lynch sent a letter to the Army Corps of Engineers in September 2022 protesting SeaPoint’s permit, which focused on bulk and breakbulk cargo, defined as goods that do not fit in shipping containers.

SeaPoint’s request, Lynch wrote, made no direct mention of pursuing container business and did not include impact studies on road and rail traffic — major considerations at SeaPoint’s location, which would direct trucks and trains through Savannah.

In an interview with The Atlanta Journal-Constitution, Lynch said he was not averse to SeaPoint receiving a permit, but he said that the private port wasn’t being held to the same standard as the Ports Authority.

“We could never do what was done there. We would never even try to do it because I wouldn’t want to sleep with that,” Lynch said. “I would not want to tell a federal authority I’m going to do something and do something completely different.”

The Ports Authority’s protests contributed to the Army Corps suspending SeaPoint’s permit and mandating that Dulany apply for a permit modification in order to develop the site as strictly a container terminal.

Dulany initially contested the Army Corps’ interpretation but later agreed to abide by the original language of the permit, with the focus on a variety of cargo. SeaPoint’s permit was restored June 1, 2023, and planning for the berth wall commenced.

In an interview, Dulany clarified his intentions in seeking a container terminal developer for SeaPoint.

“A container terminal here would never be a significant competitor to the Port of Savannah,” Dulany said. “It was meant to be supplemental, a relief valve that doesn’t cost the taxpayers a dime, and because it is private investment, would generate tax revenue.”

Dulany estimates the future user of the marine terminal will make at least a $2 billion investment.

“We’re ready to return this property to productive use,” he said.

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