Thursday, October 8, 2009

Tacoma Port Pulls Plug on New NYK Terminal

After spending more than $190 million on developing a new 168-acre container terminal for Tokyo-based NYK Line, officials at the Port of Tacoma and the shipping line have officially terminated the project.

Port commissioners voted last week to officially scrap the 2007 deal and sign a new deal with NYK that will see the Japanese line use an existing Tacoma facility. In scrapping the old deal, port officials cited a drop in port revenue due to the downturn in the global economy and projections that the final NYK project could cost $400 million more than the original $800 million estimate.

The new deal calls for NYK to begin using the port's existing APM Terminal by July 2012. Maersk previously called at the terminal until the shipping line vacated the facility in May to head to the Port of Seattle.

The 2007 deal called for the port to develop the east side of the Blair Waterway into a new terminal for NYK, after relocating tenant Totem Ocean Trailer Express and constructing road and rail infrastructure.

The port has already spent $35 million in design costs for the Blair Waterway NYK terminal, relocation of Totem to another site and infrastructure development. In addition, the port spent $146 million to acquire property and demolish vacant buildings, $6 million on site remediation and permitting, and $3 million in staff costs.

In the wake of the decision to cancel the original NYK project, Tacoma port commissioners are expected to meet with port executive director Tim Farrell in closed session Thursday to discuss his future with the port.