SAVANNAH — The dinner was a festive affair at one of Savannah’s trendiest restaurants, marked by laughter, flattery and celebratory toasts. The Georgia Ports Authority had signed an agreement to buy property along the Savannah River for a new container terminal, and authority officials and board members turned out to thank the owner of the would-be new terminal site.
The deal was hailed as a business game-changer for the state authority. The new terminal would sit more than 5 miles closer to the Atlantic Ocean than its sister facilities and downstream from a bridge that threatened to limit access to the state-owned ports.
Not long after that late-2017 gathering, the Ports Authority abandoned the project. It cited the findings of a consultant’s report that expressed concerns about the proposed terminal’s $4.2 billion estimated cost, as well as fears of public pushback from driving truck and rail traffic from the new cargo facility through Savannah’s downtown and city center.
Credit: Stephen B. Morton for the AJC
Credit: Stephen B. Morton for the AJC
The authority’s decision disappointed the terminal site’s owner, Savannah industrialist Reed Dulany. But he’d been marketing the property, known as SeaPoint, since signing a sales contract on it in 2014 and knew other suitors held interest.
What he didn’t expect was that the Ports Authority’s objections to SeaPoint would continue to haunt plans for the site. Or that Ports Authority President and CEO Griff Lynch would mount a campaign to stop a deal to build a private container terminal at SeaPoint and limit Dulany’s ability to attract future tenants.
In September 2022, when Dulany was close to reaching an agreement with a container terminal operator, Lynch raised objections with the U.S. Army Corps of Engineers. Lynch cited the same traffic impact issues he referenced in withdrawing from the Ports Authority’s deal with SeaPoint five years earlier.
In interviews with The Atlanta Journal-Constitution, Lynch acknowledged and defended his letter to the Army Corps, the permitting agency for the project. He also justified a series of actions, revealed in public records obtained under state and federal transparency laws, meant to prevent the building of a private container port on the site, one that would compete with the state’s terminals upriver.
The Ports Authority is a self-funded state entity with a vision statement that says it exists “to promote trade and economic development for our state.” Lynch says his opposition to a private container terminal is in state taxpayers’ best interests because of the investment in roads and infrastructure that support the Savannah facilities.
“We’re self-funded and we have the volume to support that,” said Lynch, who earned $1.7 million last year and whose compensation package includes incentives tied to port performance. “If I was to sit here as a CEO and let the business erode to the point where we’re not self-funded anymore, I don’t think people would be happy at the state. So the goal is to be economic development, but at the same time, we have to run a business. And when we run a business, that doesn’t mean we just let the business dissolve. That’s never been our journey.”
Lynch’s approach troubles Dulany. He said he considers Lynch’s tactics as clear examples of a government agency interfering in private commerce.
“The (public records) reveal GPA’s anti-competitive actions that it took against a private industry working on a project that hugely benefits Georgia taxpayers and likely all U.S. taxpayers,” said Dulany, who estimates SeaPoint will attract more than $2 billion in investment and limit the need for future Ports Authority facility expansions. “Clearly GPA should stop its reckless and wasteful campaign against much-needed privately funded competition.”
Credit: Georgia Ports Authority / Jeremy Polston
Credit: Georgia Ports Authority / Jeremy Polston
Bulk cargo or containers?
After the deal with the Ports Authority fell apart, Dulany moved forward with another suitor. In 2019, Dulany entered into negotiations with a cargo port developer for the site, albeit not one specific to containers that would directly compete with the state-run port. Dulany applied for a marine terminal permit that included language about “a broad range of maritime transported goods and services,” which could include containers.
According to Lynch, the Ports Authority reviewed the permit and chose not challenge it.
But email records from Aug. 7, 2020, show Ports Authority officials expressed concerns about the broad language of the application. A 37-point breakdown of the application indicates staff suspected SeaPoint could use the permit to build a container terminal.
“They don’t mention the word ‘container,’ but the entire facility is being designed for containers,” Lynch said in an interview.
Even so, the authority chose not to object during the public comment period.
Meanwhile, SeaPoint’s deal with the bulk cargo terminal prospect fell through, and Dulany resumed his search for a tenant. With COVID-19 vaccines widely available in 2021, the pandemic began to wane and container shipping surged. At least two shipping terminal operators showed interest in developing the site, including MSC, a longtime Ports Authority customer.
MSC officials contacted Lynch in spring 2022 about their interest in SeaPoint and referenced a 13-page document touting SeaPoint as a container terminal. The advertisement references the opportunity to build a facility “without air draft restrictions,” a reference to Savannah’s landmark Talmadge Bridge, which is too low to allow a growing number of container ships access to the Ports Authority’s terminals.
“What I find fascinating about this is that the entire report is about why you don’t want to call the Georgia ports and why you should call SeaPoint,” Lynch said. “This plan isn’t for multiuse, it’s for containers.”
In an email, Lynch shared with MSC the flaws the authority found with the SeaPoint site, particularly the width of the river near the site. The correspondence emphasizes how the geography hinders a terminal user’s ability to turn ships, particularly the 1,300-foot-long vessels SeaPoint’s marketing materials made reference to.
According to the authority, a container terminal operator at SeaPoint would have to dredge what is known as a turning basin, which would require extensive permitting and environmental study. Without this deepwater area, ships visiting SeaPoint would have to sail upriver — and under the bridge — to the authority’s turning basin at Garden City terminal to return to the sea, negating the downstream terminal’s advantage.
Dulany disagrees with the turning basin argument, saying the river is deep and wide enough to spin ships without significant dredging. He also said the authority did not cite the turning basin as an issue when withdrawing from the deal to purchase the property in 2017.
Credit: Stephen B. Morton
Credit: Stephen B. Morton
Concerned by competition
When MSC showed interest in SeaPoint, the Ports Authority finally lodged a formal protest of SeaPoint’s permit.
In the September 2022 letter to the Army Corps protesting SeaPoint’s permit, Lynch wrote that he supports the terminal becoming a bulk-use facility but expressed concerns about the intentions to develop it for containers because of the impact of rail and truck traffic. He noted the homepage for SeaPoint’s online marketing materials showed a container ship. Attached to the letter was a multipage document highlighting what he labeled as “discrepancies” in the permit application.
The Army Corps suspended SeaPoint’s permit a month later, requesting a modified application that would address containers.
As the Army Corps considered the permit suspension, the authority was exploring the commissioning of a traffic study involving trucks and railroad cars moving containers in and out of SeaPoint. In an email exchange with a staffer expressing concerns about the $205,000 cost of the research, Lynch justified the expense by raising fears of $280 million in lost revenue should SeaPoint develop as a competitor to the state-run terminal.
Credit: SeaPoint Industrial Terminal Complex
Credit: SeaPoint Industrial Terminal Complex
The authority developed a virtual reality animation illustrating the traffic impact of a SeaPoint container terminal, albeit using findings from a 2017 study based on a much larger facility on the site.
Dulany called the Ports Authority’s animation misleading and the authority’s focus on traffic hypocritical. The Garden City terminal handles 12,000 to 14,000 trucks a day through three gates. The authority has led in developing projects to relieve congestion, such as championing a parkway connecting the facility’s gates to I-95 and I-16 and directing trucks away from roads frequented by residents and commuters. But ports-related traffic remains a nuisance.
“At no point will SeaPoint generate the heavy traffic volume or congestion created by GPA and faced by the residents of western Savannah and Chatham County,” Dulany said.
Dulany insists the port’s opposition is borne out of fear of competition. SeaPoint’s location would make a container terminal there more attractive than the authority’s facilities upriver. Lynch dismisses that argument.
“We’re always fighting the battle of competition. It doesn’t keep me up at night,” Lynch said. “If there’s a container terminal at SeaPoint, once they try to start handling those ships, and their customers see this congestion and can’t get their trucks or their rail there, the business will stay at the GPA because it’s about the cost of doing business. And then you look at the impact of a container terminal there on the community ... it just doesn’t work.”
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