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Dallas should get on board with Corpus seaport

Tuesday, January 29, 2008

TAMPA, Fla. – Commercial real estate companies risk private capital by building on speculation all the time. But building ports and highways with public money in the hope that economic development will follow is getting a lot harder in the face of voter skepticism and tight budgets.

A recent conference here of port directors glumly looking at capacity constraints ended with a session on attracting private equity for public projects. One of the examples cited was Corpus Christi's proposed container port.

Corpus Christi still has lots of "if you build it, they will come" enthusiasm. The city, its port authority and its transportation planners have promoted trade with Cuba, a 100-mph truckers' toll road, a huge dockside warehouse and, now, a terminal for mammoth container ships called the La Quinta Trade Gateway.

"We don't have the problems inhibiting expansion at other ports," said Judy Hawley, a Corpus Christi port authority commissioner. "We're positioned, we're permitted, and we can offer optimal productivity."

But this isn't going to happen through taxpayer money or bond issues. Corpus Christi is planning an auction for the La Quinta terminal to see who wants to design, finance, build and run a multimillion-dollar facility under a long-term lease.

This matters to Dallas because of the economic energy of international trade. North Texas is a hub – very much like a seaport – of distribution centers, transportation arteries and global shipping routes that provide employment for hundreds of thousands of people.

The containers arriving in North Texas today are largely coming from Asia by way of Southern California ports and double-stacked trains.

Some container cargoes arriving at Houston surge into Dallas truck and rail yards, airports and distribution centers. A great many more may be coming, thanks to an expanding Panama Canal and container terminals in Houston and possibly Corpus Christi.

Ms. Hawley said Dallas could be an important partner for Corpus Christi's container port.

Dallas/Fort Worth International Airport is North Texas' premier example of public "building on spec," and it has paid off hugely for the economy.

That model is still alive.

Houston voters approved $250 million in bonds last year for the Port of Houston Authority. The port's commissioners approved a $74 million container terminal expansion earlier this month. Demand for container shipments to and from Houston is so great, there's no doubt about the economic viability of the new terminal.

Corpus Christi is one of several ports across the country moving in another direction.

Right now, there is no container traffic through Corpus Christi. Houston, on the other hand, moved 1.8 million containers last year and is considered "the magnet that draws container ships into the gulf," said Tampa port director Richard Wainio.

A marketing study done last year for Corpus Christi's proposed La Quinta terminal found that the port would get most of its business by siphoning traffic from Houston. In future years, it would draw container cargoes now going to California, even though Corpus Christi is an additional three days' sail away.

For Ms. Hawley, Corpus Christi's access to three railroads and several highways provides shippers with reliability no longer available in Southern California.

As for Houston, there will be so much cargo coming and going through Texas, competition between the state's ports isn't an issue, she said.

"We don't view our scheme in any way as competing with Houston. We're very complementary," she said.

Bids for the La Quinta terminal are due at the end of February. Investment banking analysts say infrastructure investors are keen on ports because of their near-monopoly control over shipping access.

A strong bid response for La Quinta could become an economic stimulus for Dallas as well as Corpus Christi.

Source: dallasnews.com