The
settlement, which SSAT revealed July 18, involves four of the port’s seven
marine terminals, all of which are along Oakland’s Inner and Middle Harbors:
Howard Terminal at Berths 67-68; Global Gateway Central (GGC) terminal at
Berths 60-63; Oakland International Container Terminal (OICT), inhabiting
Berths 57-59; and Total Terminals International (TTI) terminal at Berths 55-56.
Under the
settlement, SSAT will lease Berths 57-59 and Berths 60-63 terminals through
2022 at current rates and conditions; terminate its lease for Howard Terminal
effective Sept. 30, 2013; and dismiss current litigation against the port.
Additionally,
and independent of the settlement agreement, the TTI lease will be assigned to
SSAT through 2016, with an option to extend to 2022.
SSAT had sued
the Port of Oakland in 2009, accusing the port of violating the Federal
Shipping Act of 1984 by signing a 50-year lease deal with Ports America. Under the
deal, the Port of Oakland had agreed to turn over operation of some of its terminals
to a private investor in exchange for $686 million.
Settlement
talks between the port and SSAT began in 2012 and were concluded with the July
18, 2013 announcement. Prior to the settlement, the port had been facing the
expiration of all four terminal leases along its middle and inner harbors in
2016-2017.
The contracts
also had very short renewal notification periods, which left the port
vulnerable in the event one of the operators decided not to renew its lease.
The
settlement and the independent assignment of the TTI terminal lease now allows
SSAT to move forward with the creation of the proposed 350-acre mega-terminal,
which would be the largest in Northern California.
“These
terminal expansions are a prerequisite to remain viable to our customers and
for them to continue to retain Oakland as a port of call,” SSA Terminals Vice
President Jon Rosselle said. “It also further enhances the logistics chain for
exporters and importers in the local region and well beyond.”
The port says
agreement also provides Oakland with important competitive benefits that would
facilitate the efficient flow of cargo through the terminals.
“We reached
this litigation settlement to protect the port’s long-term viability as a
job-creating economic engine for this region,” port Board President Ces Butner said.
“This is a fair deal and creates a lease in line with current market realities.”
