The port's big catch

Why not renovate, not replace, Howard Street Tunnel? That simple idea could mean billions for Maryland's econo

With all the focus on Baltimore's future, particularly the need for jobs and investment, one would assume that a $2-billion-plus opportunity might draw considerable interest. Blame all the focus on Maryland's primary election, the Freddie Gray anniversary or perhaps post-General Assembly session fatigue, but the recent announcement regarding the Howard Street Tunnel deserves considerably more attention than it has received so far.

Here's what happened while many of us were distracted: CSX Transportation and Maryland Department of Transportation officials announced that they've come up with a plan to add about 18 inches of clearance in the 121-year-old tunnel that runs underneath Howard Street. That may sound small, but it's really quite big. That extra room will allow CSX to double-stack trains — meaning containers going in or out of the Port of Baltimore can be efficiently transferred by rail and shipped like collapsed bunk beds at about half the cost.

The Howard Street Tunnel has been the proverbial Great White Whale of the Maryland Port Administration. Shipping containers headed to or from destinations across the country — known as discretionary cargo — end up traveling through ports in Virginia or New York because double-stacking is available there. That's a real lost opportunity given that Baltimore's port is less traffic-congested than its peers and could move freight more quickly (and cheaply) if not for the tunnel. As Captain Ahab might say, port officials have been chasing the tunnel around the Norway Maelstrom and perdition's flames for years, but the replacement cost loomed large — about $2 billion.

But then CSX officials started taking a second look in recent years as part of the company's National Gateway project. They determined that instead of outright replacing the tunnel, the aging structure could be adapted — lowering the tracks in some areas where possible and carving out some of the ceiling elsewhere to gain those precious 18 inches of vertical height.

The net result? The expansion can be whittled down to a $425 million renovation. MDOT has already applied to the U.S. Department of Transportation for federal assistance under a formula that breaks down the cost into thirds. CSX would pay $125 million (plus $20 million to upgrade drainage around the site), Maryland taxpayers would kick in $145 million, and the federal government would be expected to contribute $155 million.

Some may balk at the thought of so many tax dollars spent on behalf of CSX, but the payoff is huge. A consultant hired by the state determined that the project should generate 2,500 full-time jobs (and that's not even counting those related to construction), many of them at Seagirt Marine Terminal, which currently operates at only 60 percent capacity because of the impediment. In return, the study concludes, those new jobs will generate the state's $145 million share of the project in new taxes (from the new jobs and economic activity those jobs generate) in about six years. Six years!

That's a tremendous return on investment, and it shouldn't be lost on anyone that port-related jobs pay well above the average. The typical East Coast longshoreman's pay is about $35 an hour. CSX pays its workers an average of $94,000 in wages and benefits annually, according to a 2014 report. For the Baltimore area, which has lost manufacturing jobs at nearby sites like Sparrows Point, that's just what the economic development doctor ordered.

This won't happen tomorrow, of course. Should the Obama administration approve Maryland's application this summer, it will take at least two years to design and engineer the project and then another four years to complete (less if CSX is willing to close the tunnel to freight trains for an extended period). But it's hard to see a downside given the proven success at the port — and the considerable investment the state has already made there.

Two years ago, it appeared the best Baltimore could do was to create a transfer station in West Baltimore's Mount Clare Station to double-stack trains on the other side of the Howard Street Tunnel. Morrell Park neighbors feared the noise, traffic and pollution and successfully turned it away. That turned out to be fortuitous: Had the $95 million project gone forward, it's unlikely the proposed 21-foot-tall Howard tunnel would have gotten government backing.

Still, it would be wise for state officials to make the most of this opportunity. Earlier investments in a 50-foot channel and berth should help Seagirt attract larger container ships when the Panama Canal expansion is finalized this year. Once Seagirt is filled, the question will be where to expand next. One possibility would be public-private partnership to create a marine terminal with developers of Tradepoint Atlantic at the former Sparrows Point Terminal. That may sound ambitious and years away, at best, but then who knew a "White Whale" that's existed in Baltimore since 1895 would ever get caught?

Copyright © 2018, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
45°