THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners' (Board) 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."
Florida International Terminal, LLC (FIT), has been operating a container terminal in the Southport area of Port Everglades since 2005. On December 8, 2015 (Item No. PH-2), the Board approved the most recent Marine Terminal Lease and Operating Agreement between Broward County and FIT. The agreement had an initial term of ten years with two five-year options. The effective date was retroactive to July 1, 2015. This long-term agreement included provisions which allowed for the construction of the Port Everglades Southport Turning Notch Extension (SPTNE), including the relocation of FIT to Interim Premises during the construction. This resulted in a reduction of FIT's leasehold from 36 acres to 32.1 acres during construction.
Through a letter dated June 29, 2018, addressed to the Port Everglades Chief Executive/Port Director, FIT proposed leasing additional land to meet their operational needs. Fact-finding meetings and negotiations were successfully completed on August 3, 2018, and on September 7, 2018, the Port Everglades Chief Executive/Port Director executed a one-year land lease for 12.5 acres of land in Southport non-contiguous to FIT's primary leasehold, with an effective date retroactive to September 1, 2018.
On May 23, 2017 (Item No. 66), the Board approved an Agreement between Broward County and Moss/Kiewit, a Joint Venture, for Managing General Contractor for the Port Everglades SPTNE. Construction on this project began in March 2018 and will continue until 2023. This is a delay from the original estimated completion date of December 31, 2019.
During the negotiations with the Southport container terminal operators in 2015 and 2016, leaseholds that accounted for the land required for the SPTNE construction were agreed to by all parties. However, those leaseholds were not optimal due to the need to reduce the size of both the FIT and King Ocean Services Limited (Cayman Islands) Incorporated (King Ocean) leaseholds.
On October 12, 2018, representatives from FIT, Crowley Liner Services, Inc (Crowley), and King Ocean met with Port staff to propose modifying their respective leasehold parcels to better accommodate their operations during the construction of the SPTNE. It was agreed that separate sunshine negotiations would be held with each terminal operator. This agenda item addresses FIT. Separate agenda items address Crowley and King Ocean.
Sunshined negotiations were held with FIT on November 7, 2018, to discuss a First Amendment to the Marine Terminal Lease and Operating Agreement, including representatives for FIT, Port Everglades staff, and the Office of the County Attorney.
The major elements of the proposed Amendment terms are as follows:
- The land parcel defined as "Interim Premises" is increased from 32.1 acres to 46.6 acres, and the separate 12.5 acre land lease is terminated as of March 1, 2019 (see Exhibit 5)
- Due to delays in the projected completion date for the SPTNE, the Agreement’s provision granting FIT the ability to terminate the Agreement if the SPTNE is not completed within six months of the projected completion date is modified to reflect the new completion date of December 31, 2022
- The new annual land rent for the Interim Premises increases from $817,215 to $1,237,475 reflecting the larger Interim Premises and a lease rate of $0.61 per square foot compared to the previous $0.57 per square foot
- A provision is added to provide FIT with access to Berth 31 and two container gantry cranes should it be determined by the County at the time of FIT's berth application that these are available for FIT's use. This is the berth that the three new super post-Panamax cranes currently under construction in China will be placed on when these are commissioned in Spring 2020
- The agreement provision providing FIT with early termination for convenience rights is deleted. A new provision defining a Material Adverse Change is added providing FIT with early termination rights if an event outside the control of FIT results in a year-over-year reduction in the number of containers (shipmoves) handled by FIT equal to 25% or greater
In Fiscal Year 2018, FIT transported 226,358 TEUs (20-foot equivalent units) through the Port, handling nearly 20% of the Port's Container Revenue Center cargo volume. This equated to $6,976,364 in revenue.
The amendment has been reviewed and approved as to form by the Office of the County Attorney. Signature pages are still being finalized and will be provided prior to the Commission meeting. |