Monday, April 20, 2009

State's Sad Record on New Port Facility

I have been alarmed by Representative James H. Merrill’s recent introduction of an amendment to S.351. The proposed amendment would not only be extremely detrimental to the communities of North Charleston, it would be extremely harmful to the State as a whole. Consequently, I wanted to take the time to clearly explain to you the City’s position.


Promises
North Charleston
is at last poised to be a land of promise. That promise has not been fast in coming. For years, North Charleston has borne the costs of the Tri County area’s economic needs. We’ve hosted the airport. We’ve had the port. We’ve had the Navy. We’ve had the container yards. We’ve had the factories. But patiently, persistently and sometimes quietly, North Charleston has come into its own and begun to create for itself a different future.


While North Charleston still serves as the economic hub of the Lowcountry, it has focused on 2 main initiatives for its future. (1) We have worked to diversify our employment base and take the lead in more sustainable fields that are more compatible with our surroundings communities. We have gone from an area dominated by smokestacks thirty years ago to an area shifting to high tech, retail, service and artistic uses. (2) We have worked to improve the quality of life for our citizens and communities. We have added communities in the North such as Coosaw Creek and Indigo Fields. At the same time we have been ambitious in revitalizing areas in the South, such as Park Circle and the former Navy Base.


The progress we have made has been the product of perseverance, efforts, and promises kept. The City’s current renaissance is based on our commitment to the future. Reliance on that commitment has been the basis on which people have been moving into communities like Oak Terrace Preserve, Mixson, the Olde East Montague Historic District, Charleston Farms, Horizon Village and the like. That commitment has been the basis on which millions of dollars of public and private investment has flowed in to restore these communities. The people and the money necessary to rebuild communities from within are flowing based on faith and trust.


There are several specific promises made by the State and relied upon by the people that would be impacted by Representative Merrill’s amendment to S.351. As far back as 2003, the State Legislature passed a bill that transferred the North end of the Navy Base to the City and established the Port site on the South end of the Navy Base. This was not to be a free for all. This was subject to certain mutually agreed upon conditions.


Those conditions were a hard fought battleground because they were so important to so many people. The State needed a port whether the City wanted one or not. Once it was clear that the Port was coming over North Charleston’s objections, the City needed to have certain commitments from the State so that the port’s presence would not destroy our communities. Eventually a deal was struck and accepted by the legislature in the form of a Memorandum of Understanding (MOU) - The City was to receive the property north of Viaduct Road and the South Carolina State Ports Authority (SCSPA) was to receive the land to the south. The MOU provided rail overpasses for three heavily used rail crossing and a dedicated access road from I-26 so as to keep all Port traffic out of the neighboring communities and off City land. It also specifically recited that “[t]he SPA acknowledges that the City does not want the SPA to utilize rail access from the north and the SPA will use rail access exclusively from the south end of the property.”


The promises of the state were relied upon. Hundreds of permits have been pulled for renovations of homes in the south end of the City. Redevelopment projects such as Oak Terrace Preserve, Mixson, Horizon Village and Noisette launched based on the strength of those promises and the certainty of what the future would look like. The City established parks and landed the Hunley museum. The City even worked with Clemson University in order to establish a world class restoration institute campus on City owned land on the Base along with the Warren Lasch Conservation Laboratory.


The City and its residents were not the only ones that relied upon the State’s promises. So did the United States Government. The SCSPA had to apply to the federal government for a construction permit. Thousands of man hours are devoted to creating, reviewing and analyzing such proposals and, specifically, the impact of such proposals on the surrounding community. The federal government’s analysis is based on the applicant’s representations. Activity that deviates from the permitted and approved proposal can grind the project to a halt.


Just as the State gave specific promises to the City, the State was equally willing to give specific promises to the US Army Corps of Engineers. As noted in the Final Environmental Impact Statement (EIS) issued by the Corps, “[t]he proposed project does not include the construction of any new rail facilities on the project site, nor does it include constructing improvements to any existing rail facilities located on the remainder of the Charleston Naval Complex property. According to the SCSPA, all container cargo that enters or exits the project site by land will be carried by trucks.” See Final EIS Section 3.2.4 If you do not think the federal government relied on that, consider the conditions attached to the permit issued to the SCSPA: “The determination of this office that issuance of this permit is not contrary to the public interest was made in reliance on the information you provided.” “This office may reevaluate its decision on this permit” … if “you fail to comply with the terms and conditions of this permit” or “the information provided by you in support of your permit application proves to have been false, incomplete, or inaccurate.” Moreover, the Corps noted that the SCSPA “understands and agrees that their commitment not to begin operation of the approved port facility until the access roadway between the marine container terminal and Interstate 26 is operational was an integral part of our evaluation. Operation of the port facility cannot commence until the access roadway is operation and available for use by all port related truck traffic.”


Forgotten Promises
Recent activity suggests that the State’s prior promises have been forgotten. You can imagine the City’s surprise when it recently received the State’s “State Rail Plan 2008 Update.” There the State’s consultant identified three potential “Near dock intermodal [rail yard] sites.” Two of the three were on the City’s development area as designated by the prior City / State agreement. In fact, for all intents and purposes, there would not be any remaining area for the City to see developed. The State’s consultant got at least part of the equation right, noting that “the only properties with [rail yard] promise are those undergoing redevelopment or reuse.” ES-13


Recent legislative activity has transformed the community’s surprise over the State’s rail study into alarm. The amendment to S.351 introduced by Representative Merrill would convert the Rail Plan from mere random musing by a consultant into actual broken promises.


SECTION 15 of S.351
13-1-1355 All Tracks, spurs, switches, terminal, terminal facilities, road beds, rights-of-way, bridges, stations, railroad cars, locomotives, or other vehicles constructed for operation over railroad tracks, crossing signs, lights, signals, storage, and all associated structures and equipment which are necessary for the operation of any railroad located on any “applicable federal military installation” or “applicable federal facility” as defined in section 12-6-3450 shall, upon transfer to the State of South Carolina, immediately vest, in fee simple absolute, in the Division of Public Railways of the Department of Commerce. This statute is remedial and shall be deemed to be retroactive.


Abandoned Communities
North Charleston
cannot accept northern rail access and the decline of renaissance communities that would result. Think these concerns are not real? Ask yourself why the Port is NOT sitting on thousands of undeveloped waterfront acres on Daniel Island. When plans emerged years ago to build the “Global Gateway” terminal there, on land already owned by the Port and which was unquestionably sufficient, the howls of protest could be heard at least 120 miles away in the Capitol. The State Legislature took action. What were the howls about? The howls were about the impact on Daniel Island and Mt. Pleasant residents from the future container traffic, noise, truck traffic, and ugliness of the port. Put simply, the concern was that locating the Port on Daniel Island would destroy a community in the process of being built up.


The Legislature appeased Daniel Island and Mount Pleasant by decreeing that the Port would be located in the City of North Charleston on the south end of the former base. Taking the Port was not “optional” for the City. But as mentioned, the City worked hard to obtain commitments from the State for every conceivable safeguard – rail overpasses, dedicated highway access roads, and no northern rail access. And based on those safeguards promised by the State years ago, North Charleston’s resilient communities began to move forward again. Mixson, Oak Terrace Preserve, Noisette, Olde East Montague, Horizon Village and more neighborhoods all began to flourish safely with the knowledge that the Port would not be driving through their living room hundreds of times a day. Momentum built up. In fact, even during the current recession, the area of North Charleston, inside I-526, has been one of the few communities where property values have increased in the past year. The sad fact is it is difficult to imagine keeping the redevelopment momentum the City has enjoyed if we allow the State to break its promise.


I am saddened when I realize the political realities of why the State is abandoning its promises and these communities in North Charleston. It is not that the impact of Port traffic on a community would be any different on Daniel Island than in North Charleston. Frankly, far fewer folks would have been impacted on Daniel Island. Instead, the answer is the people. The tip of Daniel Island, as well as the areas of Mt. Pleasant that also protested, have become populated predominantly by affluent, highly educated, white residents. And when those predominantly white people complained about noise, view, and containers, the Legislature could not move the Port away fast enough. Where did they send it? It was sent to historically black North Charleston neighborhoods populated by hard working people fighting hard to revitalize their community. North Charleston did not ask for it and did not want it any more than the folks on Daniel Island. The difference was North Charleston’s people, predominantly less affluent and African-American. The City cannot stand idly by and watch these neighborhoods be dumped on.


Squandered Opportunities
Northern rail access as proposed by Representative Merrill will create problems that will haunt South Carolina for generations. Consider the consequences and squandered opportunities of the State’s failure to obtain federal approval for port rail and its attempt to about-face now.


1) The first squandered opportunity is the chance to have a healthy port and economy. The SCSPA will not have a North Charleston terminal operating for years if northern access is attempted. As mentioned previously, the Port’s permit from the federal government was expressly based upon the idea that all traffic would leave by road and no rail improvements would be made anywhere on the former Charleston Naval Base Complex. Deviation from those assumptions violates the permit. Violation of the permit results in construction of the Port being halted by the federal government. Further, the State may rest assured of being engaged in litigation with the City of North Charleston for years to come. Count on an injunction halting Port development while the lawsuit drags on.


It is ironic that the State’s about-face here will solve the Port’s “lack of capacity” problems even more certainly than construction of the disputed new terminal. Increased capacity is only needed if the Port has customers. The recent pullouts and renegotiations by Maersk and others cannot be overlooked. The Port has long threatened that without a new terminal open it would lose even more business. Well, lost business is one way to solve the capacity problem. Once South Carolina becomes a ghost-town of shipping, having lost its clients to Savannah, Jacksonville, and Norfolk, there will not be any shippers bringing containers here anyway. There will be no need for more capacity. Unfortunately, we will all pay the consequences as this State teeters along in economic doldrums for years to come.


2) The second squandered opportunity is the State’s refusal to create a real, workable and comprehensive rail solution for the region. Shocking as it may sound, North Charleston agrees that appropriate rail is vital to the well being of this region and vital to the Port. The City is not against rail. To the contrary, the City has had grave concerns over the original wasteful and inefficient proposal by the Port to use exclusively truck transport. Rail is the answer for the port and a necessity for the region. So the issue is not having rail, the issue is doing rail “right.”


What would “rail done right” look like? For one thing, it would come from the south. Even the State Rail study indicates the former Macalloy Site is the preferred location for a potential rail yard and this site is easier accessed from the south. There are multiple rail right of ways in the peninsula and there are not that many rail customers. If the two major commercial rail carriers would cooperate, the multiple right of ways could be used more efficiently and improve services to the various customers. Cooperation might even result in sufficient right of way becoming available to permit the establishment of commuter / light rail, something our traffic clogged tri-county area desperately needs. Cooperation certainly would result in the State being able to obtain the dual access it desires for its new terminal facilities. However, cooperation is not possible without interest and effort.


Is this possible? Absolutely. One of our local developers has been watching the events unfold concerning the rail line to the Port with interest. He created a conceptual plan which provides for southern rail access to the new Port terminals and also improves rail access to existing terminals in the City of Charleston. South Carolina Public Rails was aware of this proposal, but failed to even include it in the State rail study.


Is it free? No, but it is the least expensive option for this state. If the State were to properly locate a rail yard, then track would have to be laid. While expensive, track is going to have to be laid whether a new yard is established on Base or to the south. What about land? Again, that is not free but a new rail yard will require land whether established on Base or to the south. So the cost inputs are there either way. What about funding? Many hands make light work. The SCSPA, the City of North Charleston, private developers and two railroad lines eager of Port business all have an incentive to work together. Moreover, the State has a unique opportunity with historic federal infrastructure stimulus money available to apply for grants and get the rail “right.”


So why is the State pursuing the installation of rail yards on land previously deeded to North Charleston? It appears that the State mistakenly assumes that land and destroyed communities in North Charleston cost nothing. The State may soon learn that the land will become the most expensive it has ever acquired. It is far from “free.”


The Merrill approach, if passed, would create financial and legal problems for the state. The South Carolina Constitution in Article I, Section 4, provides that no law impairing the obligations of contracts shall be passed. Obviously this is what the state is attempting to do. With the State’s blessing, the City of North Charleston, State Redevelopment Authority (RDA), and the SCSPA, entered into contractual obligations with each other regarding not only boundary lines, but also specifically rail routes and Port access. The City relied on these promises in order to enter into contracts with third parties. Now the State, without regard for the constitution, is attempting to pass legislation that would impair all of the contracts executed by the City. Not only would this impair the spirit of the contracts the City entered into, it makes the State and City appear to be disreputable business partners that cannot be trusted to honor their commitments. It would also be expensive.


The State Legislature’s proposed path (whether it is viewed as“impairment” or a “taking”) will lead it towards a financial nightmare. Think about all the items for which the State is about to unwittingly pay. The dirt under the rail tracks is valuable land. The State will be buying each and every acre. The dirt under the rail yard is valuable land. The State will be buying each and every acre. Moreover, the State will also be paying for the diminution of value to the surrounding land caused by its actions. Remember, the land on Base around the proposed rail facilities is undergoing redevelopment. The redevelopment established value based on exciting plans. But none of those dreams can be fulfilled with a rail yard lying in the center of the community. The State will end up compensating owners for that change in decreased value. For example, if the land surrounding the tracks was worth $50 million dollars with the state’s promises in place, but falls to $10 million once the redevelopment is destroyed by the State’s new rail plans, then the State just earned the right to pay $40 million in addition to the cost of the land it actually needs.


One must also add to the direct cost the lost revenues for the State as a whole. As mentioned, Port construction will stop. During that time, customers will drift away faster than ever, and by the time the State pays the lawsuits and pays to develop the terminal it will stand as a vacant reminder of the State’s broken promises.


Solution
This is a problem too important to remain unsolved. North Charleston’s communities need a proper rail solution if they are to flourish. The Port needs a proper rail solution if it is to effectively compete for customers. The citizens of this State need a solution, the net effect of which is to increase revenues and economic opportunity rather than destroy them. The good news is that proper solutions exist. What we need to move forward is nothing more than a group of motivated people to come together to listen and work together. In this regard I remain what I always have been – an optimist willing to roll up his sleeves and get to work. I am waiting.


Sincerely,


R. Keith Summey, Mayor
City of North Charleston

No comments:

Post a Comment

personal, fashion, travel, loan, insurance, health, real estate, home, marketing, personal, fashion, travel, loan, insurance, health, real estate, home, marketing,