For the first time in 30 years, the Maryland Port Administration has acquired land to accommodate growing business.
The port administration announced Tuesday that it has completed the purchase of Point Breeze Business Center near Seagirt Marine Terminal in Southeast Baltimore in a $55 million deal that will expand Seagirt's footprint to 356 acres.
The acquisition is symbolic of a reversal of fortunes for the port of Baltimore, which in recent decades has struggled to remain competitive with larger East Coast ports in New York and Norfolk, Va.
The port now needs extra land to help handle the growing volume of containerized cargo it's been seeing since the expansion of the Panama Canal. The widened canal gave the super-sized container ships carrying Asian-manufactured goods a more direct route to U.S. East Coast ports beginning last summer.
Capitalizing on its deep channels and timely investment in four massive container cranes, Baltimore was able to offer shipping lines an alternative to the congestion and draft and clearance issues in other ports. New York harbor is hampered by shallower, rocky channels, while Charleston, S.C., is limited by the height of a bridge and its distance from East Coast markets.
After the expanded canal opened last year, Baltimore's container traffic grew by nine percent in the second half of 2016, hitting a record 538,567 containers last year. In the first quarter of 2017, the port's container volume grew eight percent.
"We were concerned that with the success that we had in 2016 — we were the fourth fastest growing port in North America — if we were continuing to grow at that pace, we would have needed to grow container [space] by 2023," said James White, executive director of the Maryland Port Administration.
With the new land, he said, the port should have adequate container capacity through 2030.
"Since welcoming our first big container ship through the newly expanded Panama Canal last year, the Port of Baltimore has seen a significant jump in its container business," Gov. Larry Hogan said in a statement. "With the purchase of additional land, the Port will have more ability to handle the increased economic activity while generating new job opportunities for Maryland citizens."
The port's expansion is expected to generate roughly 1,650 new jobs, which state and local officials and Baltimore dockworkers eagerly anticipate.
"It means more jobs and more opportunity for us — that's huge," said Scott Cowan, president of the International Longshoreman's Association Local 333. "Volumes have increased, and it's definitely moving in the right direction, for sure."
"Obviously they're happy," he added. "More man hours, more work opportunities and more space for the port. Everybody wins."
City Councilman Zeke Cohen, whose 1st District in Southeast Baltimore borders Seagirt, said the expansion represents "real opportunities for some real economic revitalization."
"Traditionally, the port has been a place for not just family-sustaining jobs but family-sustaining careers," Cohen said. "To see that resurgence has been powerful."
White noted the port's top commodities — including cars and roll-on/roll-off equipment — are labor-intensive, and containers fall into that same category.
"We don't go after big tonnages that don't produce jobs or economic impact," he said. "We have so much acreage, how do we provide the best opportunity?"
The port of Baltimore remains much smaller than its rivals, handling about a third of the 1.5 million containers Norfolk handled last year. The port of New York and New Jersey handled about 3.5 million containers.
The Maryland Port Administration acquired the 103-acre Point Breeze Business Park for $92.5 million. Rukert Terminals Corp., a nearby private marine terminal operator, has agreed to buy 33 acres from the state for roughly $35 million, White said.
The state Board of Public Works approved the deal in February. The property's owner, Point Breeze LLC, wanted to sell to one buyer.
The site currently houses low-lying warehouse and industrial buildings, some of which are occupied by tenants. As their leases expire or are renegotiated, the state will demolish the buildings and pave the land to create a 70-acre storage lot. It's unclear how long that will take, White said.
Maryland's last land purchase for port expansion was in 1987, when the state bought land at the Fairfield Marine Terminal to handle vehicle imports. The port is now the nation's top port for automobile imports.
The port administration had expressed interested in buying the Point Breeze property more than a decade ago, but the sale never materialized, White said. State officials also considered other options to grow the port's container capacity, such as building a new marine terminal at Sparrows Point, but Point Breeze, on Broening Highway adjacent to Seagirt, was less expensive and more convenient.
The state struck a $1.3 billion, 50-year deal with Ports America Chesapeake in 2010 to allow the private company to operate Seagirt in exchange for a 50-foot-deep berth and four "post-Panamax" cranes capable of unloading the giant new container ships.
"The cranes are already there, the dredging is already done, the railyard is there for when we get the double-stack," White said. "It was a contiguous property to what we already own. It was the least expensive way to grow out our container business."
While offering easy access to the Interstate 95 corridor, the terminal remains hampered by its rail connections. For shipments heading to the Midwest, the ancient Howard Street Tunnel isn't tall enough to allow containers to be stacked two-high on freight trains, the most efficient means for rail transport. The state reapplied in December after being rejected last year for $155 million federal funding to raise the height of the tunnel.
With the recent uptick in traffic and ships arriving in bunches, the port — which has been ranked for three consecutive years as the most productive in the United States — has struggled recently to meet its one-hour goal for loading and unloading containers on trucks, White said. The expansion is expected to offer some relief in that regard, he said.
"This land will now give us additional opportunities to also maintain that type of productivity," he said.