Port stands with Kinder Morgan for operations
Published 12:00 am Tuesday, December 15, 2009
Three months after choices were laid out for the operation of the Port of Vicksburg — either renew the current lease or find another operator, possibly the county itself — port commissioners decided Monday to stick with Kinder Morgan for at least another year.
The Houston-based company is the largest independent terminal operator in the United States, and its lease here expired last Dec. 31. The extension will be for a year, with a one-year option included in the final vote.
Also remaining the same will be the $135,000 annual base rent rate, a decision that essentially reversed more than two years of back-and-forth talks that appeared to have been settled at $100,000 more per month and preserved incentives tied to gross revenue.
With a deal to make the port a major player in steel shipments to the SeverCorr plant in Columbus apparently shelved for now, the recession’s effects on steel has left the company few options in Vicksburg, according to regional sales manager Tom Murphree, the main contact between the company and the commission throughout the drawn-out contract talks.
“Maybe in the future, we can sweeten the kitty a little bit, but we just can’t afford it right now,” Murphree said.
Port revenue based on cargo unloaded through November is just less than $1.1 million, on pace to be short of the $1.75 million collected in 2008. That year’s revenue surpassed 2007’s by about $500,000 when a new support structure was under construction. Tonnage this year has consisted mainly of scrap metal, wheat, soybeans and corn.
“We’ve relied on grain and fertilizer, but that’s seasonal,” Murphree said, providing a baseball analogy to sum up business recruitment to the port. “We’ve hit a few singles and doubles, but it depends on how much we want to go for these home runs.”
The option of running the port without a contract operator, trumpeted by some officials in September during the most recent substantive talks on the issue, was panned Monday as a possible drain on port staff.
“I’d be willing to do it, but I’d be dealing with a whole other avenue of issues,” executive director Wayne Mansfield said, indicating it would complicate his role as head of the area’s lead economic development arm.
Though the vote to extend the lease was unanimous, discourse between Murphree and the board wasstrained at times, particularly on the topic of business recruitment.
“In my experience here, I question their ability to get more market share,” Commissioner Mike Cappaert said. “We’ve beat the SeverCorr thing to death in this room.”
Murphree said he was optimistic about a handful of small shipments the firm was working to bring to the local port, but the economy would drive anything substantial unloading in Vicksburg.
“About the only thing that would turn it around is if we get more industry located here,” Murphree said.
Before Monday’s vote, the most recent renewal on the table had the company paying $235,000 per month in rent and another 8 percent if yearly revenue topped $2.225 million. Even as the recession set in, the deal was heavily tied to Kinder Morgan locking up a long-term arrangement with Severcorr to ship steelmaking components through Vicksburg. The company repaid a $10 million loan to pay for infrastructure back to the state four years ahead of time and is expanding its Columbus plant.
Besides Kinder Morgan, 17 industries operate along E.W. Haining Road and Industrial Drive. Two opened in 2009, Vicksmetal Company and Five Stars Lighting Ltd. Another, Shell Lubricants, is set to close in two weeks. A $7.3 million replacement of the bridge connecting North Washington Street and the port’s lone access road is set to wrap up in 2011.
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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com