An artist rendering of the future new docks at bulk terminal 1, which is located between Citgo and I-210 bridge on the west side of the river. (Special to the American Press)
Last Modified: Monday, October 21, 2013 9:43 AM
Officials with the Port of Lake Charles hope to utilize up to $100 million in revenue bonds for several construction projects, which are aimed to improve access to the port and cultivate economic development in Southwest Louisiana.
The State Bond Commission has given the green light for the Lake Charles Harbor and Terminal District to issue the revenue bonds in one or more series not exceeding 30 years.
The commission is designated by the legislature to review and approve any debt incurred by a public body like the Port even though it operates like a business.
“We have not determined the precise amount,” said Michael Dees with the Port. “The issuing of the bonds will be determined by the timing of the expansion projects at the port and how much cash flow the port is able to generate while the projects are under construction.”
The first series, probably $50 million, will be issued in early December. It will encompass a $17 million rehabilitation to “Shed 1,” which was the first dock and transit shed constructed at the port in the late 1920s and early ‘30s.
Another project is the ongoing remodeling of the old administrative offices — about $4 million — for the federal government to locate a regional Customs, Immigration and Homeland Security office that will cover several states from that location. The port has entered into a long-term lease with the federal government to lease the building near the end of Shell Beach Drive. The port is currently leasing office space until they build a new office building to be funded through the bonds as well.
The other major projects are two additional docks at Bulk Terminal No. 1, which is located on the west side of the river between Citgo and the I-210 bridge.
“Those two docks will help us. We have more customer demand at that facility than we can currently accommodate, and we’ll be able to increase our cargo there with these two additional docks,” Dees said.
One dock will only service liquid cargo, which will mainly be used by Lake Charles Clean Energy — due to start construction next year. The company has a 25-year lease agreement with the port.
“The agreement pays us on a per-unit basis,” Dees said. “Those revenues will flow to the port and be used to pay the bond issue back.”
Dees said in the last decade the port has “improved remarkably with its income and expenses,” ushering in the capability of these improvements.
Dees said the cash flow has been $10-13 million per year and over the last 5-7 years the port has been completing projects on a “pay as you go basis.”
“But now the demand for these projects are so expensive that what we need to do is take our prospective cash flow and pledge it for a bank loan, basically, which is the bond issue,” Dees said.
He added that the bonds are not being paid off taxpayer property taxes but through operational profits.