Coupled with the Port Authority's previous transaction in 2007 to change the use of the adjacent Northeast Auto Terminal lease to allow for container handling, this agreement will lead to the expansion of the Global Container Terminal to 170 acres, which will assist in handling future cargo growth. The expanded Global Container Terminal will become part of the Port Jersey-Port Authority Marine Terminal facility.
Earlier this week, the Port Authority also agreed to purchase a significant portion of the Military Ocean Terminal at Bayonne for future, long-term port use.
Despite the global economic decline in recent years, the Port Authority remains confident that the shipping industry will rebound and come back strong, and the agency will make certain it has the capacity to meet future demand as the busiest port on the East Coast of North America.
The Port Authority remains committed to its port facilities in Elizabeth, Newark and Staten Island, including continued investments in the on-dock rail system and the 50-foot channel-deepening program.
Under the Global agreement, the Port Authority takes over ownership of the Global property and, in turn, reaches a 37-year lease agreement with Global under which the terminal operator will develop the former Northeast Auto Terminal property into one new container terminal known as the Global Container Terminal as part of the Port Jersey-Port Authority Marine Terminal facility. Global, which is owned by the Ontario Teachers Pension Plan, will then handle the day-to-day cargo operation on the much larger footprint.
The lease agreement calls for revenue sharing on containers handled by Global on the 170-acre combined facility and staged rental payments as the terminal is developed over time. In addition, the Port Authority will provide Global with up to $150 million to develop and construct new container terminal space. The Port Authority also has agreed to develop a rail facility on the adjacent Greenville property that could handle up to 250,000 containers per year.
In addition, the New Jersey Turnpike is redesigning the 14A interchange to handle projected port traffic as the Global terminal expands over time.
The Global acquisition and development will relieve the State of New Jersey from a $150-million financial obligation to the federal government to cover the cost of the 50-foot channel-deepening project in the Port Jersey Channel.
Global currently employs approximately 350 workers at its existing terminal. It is still undetermined how many workers will be hired to operate the additional cargo container space.
Another important piece of the port's long-term strategy was achieved last month when the Port Authority's Board of Commissioners authorized the agency to move ahead with the purchase and redevelopment of Greenville Yards, a century-old rail yard in Jersey City, N.J. The facility will serve as the lynchpin to removing up to 360,000 trash trucks annually from trans-Hudson crossings and New Jersey highways by moving New York City's sealed containerized solid waste and other commodities by barge and rail when the facility is opened in 2013.