Tuesday, December 10, 2013
PORTLAND – Two real estate deals that Phineas Sprague Jr. completed last week will bring changes to the west end of Portland's waterfront, but not the change the state wants most: extending railroad tracks to the port's cargo terminal.
After selling the Portland Company complex on the eastern waterfront, Phineas Sprague Jr. is planning to build a boatyard on the western side off Commercial Street, shown above at left.
Not yet, at least.
Sprague sold the 10-acre Portland Company Marine Complex to a Yarmouth-based development company for an undisclosed price.
The deal allowed Sprague to finalize the purchase and lease of a total of 23 acres on West Commercial Street, on the western waterfront. He now has the cash and land he needs to build the boatyard he plans next to the International Marine Terminal, near the Casco Bay Bridge.
Sprague says he will start work on the boatyard immediately, building a ramp and a tension-fabric building to store boats this winter.
Other potential developments on the western waterfront are more significant for the city, including extending rails to the International Marine Terminal and expanding the terminal to make space for a cold-storage warehouse.
For several months, Sprague, Pan Am Railways and the state have been negotiating a deal that would enable Eimskip, the Icelandic shipping company that moved its North American operations to Portland in March, to significantly expand its container service operation here.
Eimskip decided to come to Portland with assurances from state officials that Pan Am Railways tracks will be extended about 1,500 feet to reach the International Marine Terminal, where Eimskip vessels dock, said Larus Isfeld, general manager for Eimskip USA. The company is now operating the first direct container service between Maine and Europe in 33 years.
If train tracks reach the terminal, containers can be moved from ships to trains at the same terminal for the first time in the port's history.
Eimskip now trucks its containers along Commercial Street to the Merrill Marine Terminal, where they are loaded on trains with a crane and then shipped across the country.
Trucking containers down the street is expensive, requiring about twice as much staffing as Eimskip has in other ports, Isfeld said. Rather than pass the cost on to customers, the company is now "swallowing" the expense, he said, but "it's not sustainable."
Because of the extra expense in Portland, Eimskip is no longer pursuing new customers for rail delivery, Isfeld said. Instead, its new customers are those looking for truck delivery within 100 miles of Portland.
"We are waiting for this to happen," he said of the track extension. "It was an important piece of the puzzle everyone was aware of before we started. We would not have come here without this piece being in place."
Before Eimskip decided to move to Portland, Sprague reached a purchase-and-sale agreement with Pan Am Railways and an agreement for a long-term lease with Unitil, an electricity and natural-gas company, giving him control over nearly 23 acres on the waterfront.
Sprague finalized those deals last week, buying 14 acres from the railroad and leasing 9 acres from Unitil.
The railroad tracks now end at a propane terminal on Unitil's land. The state wants to own a right-of-way so it can build a rail extension to the International Marine Terminal, said John Henshaw, executive director of the Maine Port Authority, part of the Department of Transportation.
The state also wants to acquire land next to the container terminal to create more room for port operations and a cold storage warehouse, which Henshaw said the state would build in partnership with a private developer.
The tracks would be extended over land owned by both Sprague and the railroad. Now that Sprague has closed his deal with the railroad, Henshaw said, the state will negotiate with him and the railroad separately.
Henshaw would not say how much money the state would spend, but said he is optimistic that the Department of Transportation has enough to acquire the right-of-way and extend the tracks.
He said funding to expand the container terminal and develop a cold-storage warehouse depends on a new transportation bond approved by the Legislature. He said those elements are not as urgent as the rail extension and could take several years to develop.
The state has spent $8.5 million in recent years, including $5 million in federal stimulus funds, to transform the International Marine Terminal from a multi-use terminal to a container terminal. Henshaw said investment in the terminal creates jobs statewide because a Maine-based container service lowers shipping costs and makes the state's manufacturers more competitive.
Sprague said he's eager to make a deal with the state, since Eimskip's success would benefit the entire port.
He plans to start building the boatyard in the spring, but he will erect primarily tension-fabric structures that can be moved if the state buys the land for a cold storage warehouse.
To make room for the warehouse, Sprague said, he would move the boatyard to the west and would need additional land from the railroad to have enough space.
Sprague said he wants "fair" compensation for the land he has bought and rights to cross the railroad right-of-way to his property.
"I am not trying to create a mess," he said. "I am trying to create solutions."
Officials from Pan Am Railways could not be reached for comment Monday.
Tom Bell can be contacted at 791-6369 or at:
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Last week’s sale of the Portland Company Marine Complex on Fore Street, above, allowed Phineas Sprague Jr. to move ahead with his plan to build a boatyard on Portland’s western waterfront.
Gabe Souza/Staff Photographer
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Phineas Sprague Jr. says “I am trying to create solutions” for development of the waterfront.
John Patriquin/2013 Press Herald file