GALVESTON — In a move some officials say is likely the last chance to attract any significant outside investment to the public docks, the Wharves Board of Trustees on Wednesday voted unanimously to pay a consulting firm $300,000 to help find customers and money to redevelop the western half of the Port of Galveston.
The wharves board, which governs the port, voted 6-0 to enter into a professional services agreement with Laredo-based Phoenix Port Partners. The firm’s duties will include finding a developer to fill slips at piers 36 through 41, deepen the nearby channel and develop the area for cargo operations. It also would be responsible for securing terminal operators and financing for the project.
The long-term success of the port, which survives on its own revenues and isn’t supported by taxes, depends on redevelopment of the west end, officials said Wednesday. Deep in debt and barely breaking even each year, the landlord port has struggled to invest in its infrastructure or to make improvements that could attract new tenants. It has gone as far as it can go on its own, officials said.
Phoenix Port Partners, a partnership formed specifically for this project, would get paid the $300,000 in installments over about three months after completing various tasks, including developing a business plan and a model for cargo terminals operations, building a financial model and developing a market strategy.
Officials said they were working on an arrangement through which the port would be reimbursed the $300,000 by investors Phoenix Port Partners secured.
“Whether we like it or not, the facts are, we can’t operate unless we have outside money,” Trustee Benny Holland Jr. said.
Wednesday’s decision comes at a time when island residents have lost patience with costly consultants and studies.
Trustee Rusty Legg, who represents the city council on the wharves board, said his constituents aren’t interested in pouring more public money into studies that invariably get shelved.
But Legg voted for the agreement after port staff and other trustees said Phoenix Port Partners would solicit customers for the port and be paid in installments based on performance.
Holland said the public had shot down efforts for port growth in the past, specifically a proposed merger with the Port of Houston that would have pumped millions of dollars into aging infrastructure on the island’s waterfront. Had the merger been approved, the Port of Houston would have built its $100 million Bayport Cruise Terminal terminal here instead of Pasadena. Merger opponents had said private investors would save the port. But those private investors never surfaced, Holland said.
“I can’t let people out there tell me how to run the port,” said Holland, who also is executive vice president of the International Longshoremen’s Association.
The port should be positioned to capture business from Cuba, which will come online when Fidel Castro dies, and South America, Holland said.
If the port can’t find a way to invest in its future, it “might as well buy for sale signs,” Trustee Johnny Smecca said.
“I want to survive; go forward,” Smecca said.
Improving berthing on the west end would increase the port’s ability to accommodate new vessels for both niche container and roll-on/roll-off cargo such as tractors and automobiles, officials said. Such improvements would cost the port $50 million, which it doesn’t have, officials said. Its has only about $18 million remaining from federal and state grants.
Port officials want the redevelopment to begin before U.S. Army Corps of Engineer permits to fill in the slips expire.