Ocean Gateway Waterfront Development History
In 1998, The Mayor's Waterfront Task Force I reviewed the recommendations of the
Cargo and Passenger Study (CAP) prepared for the City and the State of Maine regarding
the primary marine terminals on the Portland waterfront.
The study looked at the passenger and cargo operations in the port and made specific
recommendations regarding how those operations should be rationalized at various
locations within the port.
Specifically, the Task Force recommendations addressed:
concentrating passenger operations in the Old Port area
expanding cargo operations in the industrial western end
The study focused on:
taking advantage of the economics of scale tied into supporting compatible
marine operations
the need for the City to reutilize the BIW complex which would return to City
control in 2002
the growing cruise ship trade
As a result of the acceptance of those recommendations, the City undertook requests for
State and federal funding, as well as designating its own capital contribution through the
Capital Improvement Program (CIP).
In 2000, the State and City selected an engineering firm (Woodard & Curran) to begin the
design and engineering process for what is referred to as the Ocean Gateway Project, or
Oceangate.
This project name was selected to allow the incorporation of adjacent City owned
property, as well as the Maine State Pier into the planning and design process.
The incorporation of adjacent city owned property was necessary to:
measure the impacts on those areas
to utilize all assets to develop the most efficient design
to use State and City contributions to leverage federal funding.
The City recognized that the current Casco Bay Island Transit District Facility (CBITD),
which was designed to handle 500,000 passengers annually, was projected to handle over
a million. Where this was already a significant transportation facility that needed to be
addressed in planning, the CBITD terminal, Maine State Pier area not leased by BIW, the
City owned parking areas and the BIW site were all incorporated into a single 19.5 acre
parcel for the purposes of master planning. This expanded the study areas beyond what
the original CAP Study had reviewed but was necessary as part of an appropriate
planning process.
Also as part of it due diligence efforts, the Transportation Department undertook a series
of additional studies and discussions to quantify and qualify the impacts on the
waterfront, as well as the financial implications to the City.
The CAP Study included a preliminary list of recommended infrastructure improvements
for the BIW site as well as the International Marine Terminal, along with cost estimates.
The scope of that study did not include precise conditional surveys or long term financial
impacts for the rest of the waterfront. It was recognized however that the additional
municipal facility would increase the financial burden, as well as the opportunities, for
the City.
Financial Management Strategy
The department planned a systemic approach to the analysis and management strategy.
The City is currently responsible for three marine facilities, which will expand to four in
2002.
These facilities include the:
International Marine Terminal
Portland Fish Pier and Exchange Complex
Maine State Pier including the Casco Bay Island Transit District Terminal
Bath Iron Works complex.
At the end of this year, the City will be increasing its fixed and variable cost base when
the BIW complex is returned to us on 31 December 2001. Although revenue is up, there
is concern that funds generated by marine operations may be insufficient to cover the
increased operating expenses and capital investment required to maintain of all of the
City's marine facilities collectively.
However, the City has property and building space under the waterfront division that may
be utilized to generate additional revenue to meet operating and capital costs in the long
term.
To meet the financial requirements, the department must continue to develop and
maintain a diversified economic base on the waterfront.
That base includes:
container operations
cruise ship operations
Fish Pier Authority including the Fish Exchange
Parking fees
berthing fees
This approach will offset variations in industrial and economic cycles and balances cash
flow overall.
The City also has waterfront bond debt to settle. This includes a budget shortfall due to
obligations that go beyond the scheduled lease payment termination date from BIW for
that facility. In addition, there will be a requirement for additional capital investment
from the City in the BIW complex, as well as ongoing investment in the other marine
facilities to maintain their infrastructure.
The department is looking at all of its facilities holistically. We have undertaken a
conditional survey of all marine facilities currently operated by the City to develop
maintenance and capital costs. We have a clear understanding of how much it will cost to
maintain our facilities over the next ten years.
We are also completing a financial analysis of
the waterfront division's collective annual and long-term facility operational
expenses
staffing requirements
projected capital investment integrated into a comprehensive long term cost
analysis.
As part of that effort, the department has looked at its revenue capabilities based on
existing and projected business.
We also are looking at a new revenue potential based on new resources all as part of the
Ocean Gateway Project including:
new terminal rental space
concessions
advertising
new ground leases
property development
new parking
car rentals
In looking at potential revenue, we started a comprehensive port profile and competitive
niche industry analysis which will help us determine potential marine growth areas.
What has become apparent is the need to develop additional sources of revenue through
the development of City owned properties in a manner compatible with the City's goal of
maintaining a working waterfront.
Many port communities address the need to meet financial goals through the
development of seaport properties for compatible, non-marine use. Revenues from these
sources are used to maintain marine related infrastructure as well as offset operational
deficits.
The need to entertain new compatible, but non-maritime development to meet financial
requirements to maintain the City's facilities may influence Portland's waterfront zoning
which was developed as a result of a 1987 Waterfront Referendum.
The extent of the financial requirements will not be defined or articulated until all of the
waterfront studies are completed in the spring of 2001.
It can be reasonably assumed however that:
some high yield revenue development will be necessary in areas where such
development is currently restricted by current zoning
private sector property owners under those same restrictions will want to
participate in that consideration to their own benefit.
Eventually the City needs to develop a master plan not only for the East End of the
waterfront, but for the entire port area.
That effort will need to:
be broad in perspective
involve private sector
involve the marine sector
involve community interests
set forth guidelines for growth and sustenance of the seaport area for the
long term.
It is important also to understand that the economic engine created by waterfront
industries, affects the entire City of Portland and the entire:
joint port community of South Portland
Southern Maine region
State of Maine
northern New England region.
Those interests will also need to be taken into account and the decision making process
must be comprehensive and all-inclusive.
Terminal Rationalization
Prior to making final recommendations, the department reviewed consolidating the
international ferry operations with cruise operations and moving all passenger operations
to the proposed Ocean Gateway site.
There were some critical points made in the original CAP Study, as well as operational
constraints that supported this change.
1. There was insufficient space to accommodate international ferry operations and
cargo operations at the International Marine Terminal because of anticipated
growth in both areas. Because of the limited berth size, there is a conflict between
the Scotia Prince and the new container ship. The 710-foot berth is not large enough
to handle newer style cruise ships.
2. For Passenger Cruises to remain at the IMT, a capital improvement program
would need to be undertaken to improve the facility. Estimated improvement cost
would be $8-9 million as the useful life of the building in nearing an end. Conversion
of IMT to freight eliminates the need to invest large sums to improve current facility
for continuing passenger operations.
3. Passenger ships remaining at IMT would require that a new cargo facility would
have to be developed. The facility would require a minimum of 10 acres of open land
in addition to a berthing facility with a minimum of 1,000 linear feet along a 100
foot wide apron. The facility would require deep water, rail and road access.
Estimated cost of development including acquisition and build-out would be $
600,000 per acre plus the cost of construction of a new pier. The existing crane could
be moved to a new facility. The only land available for such a facility is located west
of the Casco Bay Bridge and east of Merrill's Marine Terminal, which is privately
owned. There is no property under city control on which to relocate freight
operations.
4. The Ocean Gateway Facility would be redesigned as a port of call facility without
a smaller size terminal. Any homeport operations would be handled at IMT
assuming that such a vessel did not exceed 725 feet which is a significant limitation
given the increasing size of modern ships. The estimated cost for this type of
improvement would be $12-13 million.
5. CBITD terminal improvements, estimated at $5-6 million, could continue on a
parallel track, under FTA funding.
6. POFC handles 160,000 passengers annually. Currently, Commercial St. is a
barrier to tourism, as most passengers do not get into the Old Port area. Relocation
puts the majority of international passengers into the heart of tourism area. A
Federal Inspection Facility combined with a terminal built for POFC provides us an
opportunity to attract new homeport business, which requires similar
accommodations and would be well suited to the Old Port business district.
7. The western end of the waterfront is primarily industrial and does not properly
lend itself to hosting a passenger operation. Visitor comments have tended to be
negative regarding this part of town. The new I-295 connector provides the City an
opportunity to limit truck traffic associated with cargo operations from going
through the Old Port and adding to the existing traffic problem.
8. Passenger ships berthing at the head of the harbor lessens traffic congestion in the
inner harbor.
9. Operational costs for the city increase when managing five facilities vs. four.
There are significant advantages and disadvantages associated with both the
consolidation and segmentation of marine operations.
Consolidation affords:
operators the ability to take advantage of economies in both operational costs
and capital investment
Freight and passenger operations together create an inherent safety risk but
most types of freight operations are compatible with each other
A single facility can handle multiple passenger operations such as home
porting, port of calls and ferry operations more cost effectively.
Segmentation affords:
distinct advantages in operations and expandability, particularly in cargo
facilities.
Ports that have expansive waterfront property can separate all types of
marine operations by cargo into specific terminals
The economies are best achieved through leasing terminals out to carriers or
terminal operators.
As operations expand, these facilities have the opportunity to increase the per
acre throughput and increase unit returns.
Passenger operations are significantly different than freight operations. A
large amount of infrastructure is dedicated to customer convenience, federal
inspection, ship servicing and baggage. Passenger terminals in most ports are
located near tourism areas and outside of industrial zones.
The determination on if a port should segment or consolidate operations is primarily
dependent upon demand and availability of space.
In most cases, ports have existing facilities that can be easily converted to specific uses.
The most costly port infrastructure is generally associated with the passenger trade,
although new container terminal construction with modern cargo handling equipment
including gantry cranes can exceed $1 million per acre, and generally are no less than 100
acres, with 2000 linear feet of berthing. The average cost of new projects associated with
the cruise ship trade is between $30 and $50 million.
Alternatives Analysis
The 1988 CAP Study looked at various alternative scenarios regarding port operations
should BIW not vacate the site at the east end of the waterfront.
That report looked at alternative properties including the land west of the Casco Bay
Bridge as well Deake's Wharf.
As part of the final analysis for the Ocean Gateway Project, the department looked at
those same properties again should the physical constraints not allow all cruise ship
operations to be co-located at the east end waterfront site.
The analysis also incorporated the findings of the project consultants Woodard and
Curran, who as part of their initial tasking, did a site conditions survey of the existing
infrastructure at the BIW site.
The following was determined:
Due to the condition and age of the Maine State Pier, and the length and
width of the existing pier 2, substantial investment would be required to be
made to accommodate modern cruise ships.
Cargo Operations now at the IMT would need to be relocated to another
part of the waterfront and the IMT would need to be reconfigured with a
new terminal built to replace the existing facility.
There was no existing location on the Portland waterfront capable of
handling the City's existing cargo trade. This accommodation would require
the purchase of new land, with deep-water access that would need to be
improved for container handling. Land acquisition would require 10 acres.
A shuttle system would need to be implemented to provide passenger ships
customers with Old Port access.
CBITD improvements could move forward as originally planned.
Alternative Costing
This is the estimated cost of development for an alternative scenario, which would keep
passenger ship operations at the existing International Marine Terminal.
Assumptions are that:
site development would take place for the Bath Iron Works facility
CBITD expansion would take place
the IMT would be improved and a new cargo facility would be developed
1. BIW Site Redevelopment
a. Pier 2 reconstruction
b. Pier 1 reconstruction
c. Site work
TOTAL
$ 10,000,000
1,000,000
1,000,000
$ 12,000,000
2. CBITD Terminal Expansion and Improvements
a. Terminal Expansion
b. Berth Improvements
c. Traffic Improvements
TOTAL
$ 2,000,000
1,000,000
1,000,000
$ 5,000,000
3. IMT Site Redevelopment
a. Existing shed demolition $ 300,000
b. Terminal reconstruction
8,000,000
c. Site paving
500,000
TOTAL
$ 8,800,000
4. Cargo Facility Development
a. Land acquisition
$
b. Paving and improvement
c. Pier (700x100)
TOTAL
$
4,000,000
2,000,000
7,000,000
13,000,000
Funding Availability
Segment 1 funding is fully available under the existing State bond.
Segment 2, which involves the CBITD facility, is 30% available under an
anticipated FTA allocation
Segment 3 and segment 4 would have to be funded under a new financing
scenario provided by the City. This could be funded through City issued
general obligation bonds. Bonding obligation could be reduced through the
sale of developable property at the Ocean Gateway site. Six to eight acres
could be made available at $600,000-$800,000 per acre. The bulk of this
property would be north of the existing Maine Narrow Gauge Rail track.
