THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners' Value of "Ensuring economic opportunities for Broward’s diverse population and businesses" and the Goal to "Increase the economic strength and impact of revenue-generating County enterprises balancing economic, environmental, and community needs."
On October 23, 2012 (Item No. 15), the Broward County Board of County Commissioners (Board) approved a five-year Marine Terminal Lease and Operating Agreement between Broward County and Sol Shipping Services, Inc. (Sol) for 5.34 acres of land in the Midport area of Port Everglades after waiving the competitive selection requirements for Marine Terminal Lease and Operating Agreements. Additionally, a 1.2-acre grid has been rented to Sol on a monthly basis under the terms and rates in Port Everglades Tariff Item No. 1140 since November 21, 2015.
In March 2017, representatives from Sol contacted port staff indicating an interest in renewing their lease at Port Everglades and expanding the parcel available for cargo operations. Section 32.5.d. of the Broward County Administrative Code authorizes renewal of a marine terminal lease if it is in the best interest of the County. Since Sol has been moving cargo through Port Everglades since 1993 and has held a lease since 2012, Port staff proceeded with negotiations for a lease renewal based on that authority.
Sunshined negotiations meetings were held on September 29, 2017, and October 9, 2017, with representatives from Sol and staff from the Port Everglades Department and the Office of the County Attorney. An authorized representative of Sol has signed the agreement (see Exhibit 2). The primary business points of the new agreement are as follows:
- The term of the new Agreement will be five years retroactive to November 1, 2017, to coincide with the end of Sol’s previous lease term. Sol has remained on the lease parcel under the month-to-month tenancy provisions of the previous lease.
- The new lease parcel will be for 6.54 acres of land in the Midport area of Port Everglades, incorporating the previous leasehold plus the additional land that Sol had previously been renting as a grid (see Exhibit 3).
- On June 1, 2018, Sol will relocate to a larger 7.0 acre parcel adjacent to their current parcel that is better configured for their operations, and frees up their existing leasehold for other port uses. The relocation to the new parcel is delayed to allow Sol to continue to operate on their current parcel until June 1, 2018 to minimize disruption to their cargo operations during the perishables import season that ends in May 2018.
- The annual land rent for the leasehold will increase from $0.68 per sq. ft. to $1.06 per sq. ft. for the first year of the new lease based on recent appraisals of similar land in Midport. The land rent will increase annually over the term of the Agreement after the first year by the greater of CPI or 3%.
- To provide land use flexibility for the County, the Agreement provides that the County can relocate Sol to an equivalent parcel within the Port with 90 days notice. Sol has 90 days to either accept the relocation site or terminate the Agreement without penalty to Sol.
- Sol will be charged a bundled rate of $52 per container shipmove, with a Minimum Annual Guarantee (MAG) of 16,000 shipmoves per year, for containerized cargo moving through the leasehold. This bundled rate is in lieu of separate charges for dockage, container unit wharfage, and harbormaster fees, and replaces the current approach of all charges being based on tariff rates and a MAG based on cargo tonnage. The bundled shipmove rate will be adjusted annually over the term of the Agreement by the lesser of CPI or 3%.
- The bundled shipmove rate will be discounted by $10 per shipmove for all containers moved through the leasehold above the MAG as an incentive to increase cargo throughput at Port Everglades.
- While Sol’s cargo is normally handled using ship’s cranes or shoreside truck cranes to move cargo on or off the ship, if Sol uses a Port-owned container gantry crane or mobile harbor crane, such usage will be provided at a discounted rate 15% below the published tariff rates for crane rental or standby charges.
- All other marine services and charges applicable to Sol’s operations at Port Everglades will be billed in accordance with Port Everglades Tariff No. 12.
- Sol will provide a Payment Bond of $350,000 in a form approved by the County.
Based on an economic impact analysis completed by Martin Associates, it is estimated that Sol’s operations at Port Everglades at MAG levels will support 246 direct, induced and indirect jobs for Broward County area residents, with a total annual wage and salary income impact of over $16.3 million. Local businesses will receive over $22.5 million in sales revenue from providing services to the ocean cargo activity. This does not include the value of the cargo moving through the Port. A total of almost $1.7 million of state and local tax revenue is estimated to be generated annually as a result of the cargo activity through Sol's marine terminal (see Exhibit 4).
The Marine Terminal Lease and Operating Agreement has been reviewed by the Port Everglades Risk Manager and approved as to form by the Office of the County Attorney.
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