Capital Goods - September 2010

O Captain! No captain
By Scott Mooneyham

The ship that is the $3 billion megaport planned for near Southport has run aground. As reported in last month’s Business North Carolina, legislators declined to provide the state’s $4.7 million share for a $10 million study required for the deepwater, cargo-container port to proceed. Soon afterward, the agency that runs North Carolina’s two existing seaports said it was mothballing the project. “The N.C. State Ports Authority has heard and respects the concerns voiced by local communities and our elected officials and is placing the proposed N.C. International Terminal (NCIT) project on hold, ” the authority announced a couple of weeks after the General Assembly adjourned.

So the the legislature’s decision and local opposition sealed the megaport’s fate? That’s one way to interpret events. Another is that the 11-member authority never really sought out a captain to take the helm.

Former Gov. Mike Easley and then-Lt. Gov. Beverly Perdue sat on the Council of State in 2006 when it gave Ports Authority the go-ahead to buy 620 acres on the Cape Fear River. Neither jumped up and down to proclaim the project the salvation of Eastern North Carolina or to make the project their own. None of the high flyers in the legislature — not Senate leader Marc Basnight, not House Speaker Joe Hackney — decided the megaport and the massive public investment it entailed was a must-have item on the state’s economic-development to-do list.

The authority, though, quietly proceeded. It conducted studies. It jumped through required federal hoops. It wanted the state to position itself to take advantage of changes coming to the shipping business. With improvements to the Panama Canal, shippers would be building bigger cargo-container craft and more would come to the East Coast. If North Carolina could build a modern port capable of handling those ships, it could capture a portion of the new traffic. The Ports Authority produced studies showing that the megaport would create 6,500 direct jobs — employment for truckers, longshoremen and railroad workers — by 2030. An additional 10,000 indirect jobs would be created from the associated spending.

CEO Tom Eagar and crew never sought the broad political support reason would suggest is needed for a $3 billion public investment. The authority, with the ports in Wilmington and Morehead City, has its own revenue stream, and only rarely has it come hat-in-hand to the legislature. It was used to doing things its own way, without attracting a lot of attention. As governor, Perdue said she supported the project, but she wasn’t the cheerleader former Gov. Jim Martin had been for the N.C. Global TransPark nearly two decades earlier.

And there was that opposition. Local critics created NoPort Southport, countering the authority’s claims with their own study suggesting that the project would never live up to the hype and that North Carolina would never catch ports in Norfolk, Va., and Charleston, S.C., with their rail and highway advantages. Nearby towns joined the fray. The Baptist State Convention, which operates a camp and conference center on nearby Oak Island, came out against it, too, sending a letter to Perdue calling the economic projections “unrealistic and unattainable” and the environmental impact severe.

For the Ports Authority, a bad summer got worse when the region’s congressman, Mike McIntyre, weighed in against the project. The Lumberton Democrat called it “too risky and too costly.” There was quiet opposition as well. Some existing businesses in Eastern North Carolina worried that rail changes associated with the project might cost them money or hurt their service. Progress Energy Inc., whose Brunswick Nuclear Power Plant is adjacent to the site, took no public position. Word around Raleigh was that company brass wouldn’t be unhappy to see the project go away.

Despite the pronouncement about putting the project on hold, the Ports Authority hedged a bit. Chairman Carl Stewart told one newspaper it had no plans to abandon the site. Eagar told another paper that the project wasn’t dead. Then came news that the authority had hired CapStrat Inc., a Raleigh public-relations agency known for its pull in state political circles. A Ports Authority spokeswoman says CapStrat will not be lobbying legislators about the development of a deepwater port but offering advice on business development and handling media promotion of the existing ports.

Those words didn’t soothe opponents, who saw the $375,000-a-year contract as a sign the authority will try to revive the project. If so, CapStrat or anyone else advising the authority might want to begin with a critical piece of advice: Find a captain and get him or her on board.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.