This is lengthy, I know - but I ask you all to spend a bit of time
reading...because our community and future is at stake.
There is a proposal being considered by our City Council: The Port of St.
Marys Industrial & Logistics Center. We have, in this document, attempted
to summarize the primary concerns, provide documented resources, and raise the
many questions that must be answered before this project moves forward. We urge
you to read the material and attend any and all public meetings about this
matter. Ask yourselves what it is that you treasure about St. Marys, and the
way in which this project may alter our community. Whether your primary
concerns are environmental, economic, quality of life, civic responsibility, or
whatever: this issue deserves your active and involved consideration.
Port of St. Marys Industrial & Logistics Center
Rezoning Proposal
Prepared by Robert Divine and Alexandra Kearns
Background:
The Port of St. Marys,
LLC, has submitted a Rezoning application with the City of St. Marys for
the 722 acre tract of land that was the former home of the Durango Paper Mill.
The Rezoning application requests a change from the current classification
of PD (Planned Development Mixed Use) to a PD (Planned Development
Industrial) district under Section 110-68 of the City of St. Marys Zoning
Ordinance. http://www.stmarysga.gov/department/community_development/docs/151109_RezoningApplication.pdf
The proposed development would be known as the “Port
of St. Marys Industrial and Logistics Center” and includes a projected
redevelopment area of nearly 500 acres with nearly 5,000 linear feet of
frontage on the North River branch of the St. Marys River.
The property is currently
controlled by a Federal Bankruptcy Court for the estate of Durango–Georgia
Paper Company, which ceased operations in 2002. LandMar Group acquired the
property in 2005 with intent to redevelop the site into a mixed-use residential
and commercial development. The property was rezoned for that purpose, and most
of the industrial facilities were demolished and cleared but LandMar went into
bankruptcy in 2010 and the property reverted to the bankruptcy trustee.
ASM Capital, a New
York-based company that routinely buys bankruptcy debt (a legitimate business)
is thought to have done so in this case, thus controlling the creditors
committee that must recommend approval of any settlement to the Bankruptcy
Court. ASM Capital apparently has
established a subsidiary, The Port of St Marys, LLC, which has a contract to
purchase the mill property if the rezoning proposal is approved. http://www.asmcapital.com
Economic Considerations:
- Earlier studies indicate that a
barge terminal at this site may not be feasible. See the study by Georgia Tech,
March 1992, and the study by Georgia Southern University, February 1993, both
commissioned by the Development Authority of St Marys.
The Georgia Southern study concluded that a barge terminal would be
economically feasible only if the Gilman Paper Company utilized barge shipping
for “a significant portion” of their shipments, in and out. Paper manufacturing
companies such as Gilman and bulk commodity (gravel, dry chemicals, garbage,
etc.) companies produce great quantities of cargo suitable for barge shipping,
while very few other industries (including desirable high technology
enterprises) generate this type of freight volume.
- The study also pointed out that “ICW barges fully laden to a draft of
8-12 feet would generally be unable to transit the North River at low water”. The depth of the North River channel,
particularly at low tide, would restrict access to small ICW-type barges that
are not suitable for ocean transport. Inasmuch as silting has limited the
current ICW depths, north and south of St Marys, only limited intra-coastal
transport can be expected. Regarding the need for dredging, Mr.
Christopher Ragucci, the designated representative of the development owner,
ASM Capital, has stated that no dredging would be required, although the
Georgia Southern study indicated otherwise. Ocean transport would require the
added cost of transferring cargo from small barges to larger barges or
ocean-going ships at another location, thus impacting economic feasibility.
- The rezoning
proposal is not specific as to the type of industrial development that may be
considered.
Although the
proposal includes building height and set-back restrictions, it does not
specify restrictions on uses that may be considered objectionable (noise, odor,
light, chemical or other pollutants). Each proposed use will have to be
considered by the City before issuing a permit. In each case, the choice will
be between jobs for the residents and tax income, versus the possible
undesirability of the use - a difficult conundrum for elected officials. In effect, approval of the proposal
effectively delegates the economic development of the site, the largest potential
driver of economic growth in the City, to a non-resident private company with unknown
ultimate objectives.
- The proposal provides building height and setback
restrictions, but does not provide requirements for maintaining a favorable
visual appearance along Osborne Street or in the Mixed Use commercial area on
Meeting Street. The Osborne Street side of the property provides the first view
of downtown St Marys. It is crucial that this first impression be favorable to
visitors and pleasing to the residents. The re-zoning ordinance should provide
for this so that unsightly industrial buildings will not detract from St Marys’
attractiveness.
- Bankruptcy Proceeds: Presumably some of the
proceeds from the sale of the property by the bankruptcy trustee will be used
to settle claims of creditors, many of whom are St Marys citizens.
One of the motivations for the City Council to
approve the re-zoning application is to provide at least partial payment of
claims of its citizens. In order to evaluate the merit of this motivation, the
City Council should determine from the bankruptcy court the terms of settlement
for each of the various classes of creditors, if the sale should be
consummated. This information should be publicized so that citizens/creditors
can know what to expect.
- Port
security is handled jointly by the Coast Guard and U.S. Customs and Border
Protection, both components of the Department of Homeland Security. Local law
enforcement agencies and the FBI also have a role in port security at the local
and regional level. The importance of the container shipping industry is
equally matched by its vulnerabilities to terrorist attack. Cargo containers represent the largest area of concern in terms of security
and vulnerability. With an estimated global inventory of over 12 million, the
securing, tracking, and inspection of all shipping containers is a difficult
task. The largest obstacle to overcome with cargo and port security is cost:
the cost of inspecting the containers, and the cost of shipping delays from
those inspections. Will St. Marys' taxpayers be responsible for paying
for local law enforcement security efforts at the proposed Port?
Environmental Considerations:
- The Wood Stork Rookery:
The rezoning proposal recognizes the Conservation
Area but does not provide for public access for viewing. It should be
well-noted that the wood stork is listed as a threatened species under the
Endangered Species Act by the U.S. Fish and Wildlife Service. What impacts
would wide-scale construction, industrial activities, and barge traffic have
upon the Rookery?
- Wetlands and
salt marsh:
The total property under review includes 165 acres
of salt marsh. The property also includes U.S. Army Corps of Engineers
jurisdictional freshwater wetlands.
Development is contingent upon “Georgia Department
of Natural Resources and USACE permitting.”
Development plan envisions that “3,000 linear feet of barge and vessel
berthing is attainable on the North River.”
Will development require dredging of the North
River to increase depth, straighten the channel or to provide for a turning
basin? What are assurances that the
Georgia DNR and/or the US Army Corps of Engineers (and EPA, if that agency
prevails in the currently-proposed jurisdictional claim) approval can be
obtained? Opposition, including legal
action, can be expected from environmental groups.
- Increased impervious surfaces and stormwater:
Once the propose development is complete, 75
percent of the site is projected to be impervious surfaces. The “applicant”
states that the project will utilize onsite stormwater detention ponds and
buffers. It must be determined whether or not these ponds would retain all
stormwater from the development or if additional stormwater will be added to
the existing system. Additionally, it should be known whether or not the ponds
will be discharging stormwater into the adjacent marsh in that any such
discharges could negatively impact an environmentally sensitive area.
- Traffic and noise:
The development of a 722 acre industrial,
manufacturing and barge port facility will generate greatly-elevated levels of
truck traffic and noise. The rezoning proposal projects “Volume Added to
Adjacent Streets: 24,998 Weekday Average Daily Trips.” What would the impact be
upon the traffic-flow from the downtown historic area and what noise might be
experienced by the surrounding residential neighborhoods?
- Toxicity:
The site in question contains chemicals and toxins.
What measures will be taken to protect the surrounding residential area during
construction?
- Quality of Life:
It should be noted that during the “public input” periods involved in
the formation of the “Main Street/Downtown Strategic Visioning Plan”, the vast
majority of respondents cited such attributes as “peaceful”, “charming”,
“historic” and “quality of life” when asked about St. Marys advantages and what
must be preserved while going forward.
The question facing our elected leaders must be “Will a heavy road,
rail, and water traffic industrial barge port at the gateway to St. Marys
Historic District serve to protect and promote the unique nature of our
community and environment - or will going forward with this proposal be a
classic case of “killing the golden goose”?”
Feasibility:
There are questions regarding the general
feasibility of the development proposal.
Is the developer financially capable of carrying
out the plan?
What is its record in similar projects?
Does the developer have audited financial
statements, and have the statements been evaluated by competent examiners?
Has the developer ever defaulted in carrying out a
similar project? In what other projects is the developer currently involved?
Do any of the principals have a record of illegal
activities? (According to public records and newspaper articles, this is an issue. URL
links will be provided upon request.)
The proposal does not specify any particular
intended uses of the property, but earlier statements by the developer
suggested consideration of uses that do not appear to be feasible or desirable,
including wood pellet manufacturing (There are ten pellet plants currently
operating in Georgia, generally located in the center of a circle of available
tree raw material, unlike this site which is at the edge of a semi-circle of
raw material, thus increasing inbound freight costs because of longer hauling
distances; also would result in significant Highway 40 log truck traffic.) It
is also quite possible that the manufacturing or export of wood pellets will
result in legal intervention: https://www.southernenvironment.org/cases-and-projects/biomass-energy-in-the-south
Mr. Ragucci has also spoken of natural gas
interests: “One cargo that’s being
explored is natural gas
that could be liquefied from a pipeline at St. Marys and put into tank
containers for shipment to nearby deepwater ports and
distribution to Caribbean customers, Christopher Ragucci, CEO of Worldwide and
managing director of the St. Marys project, told JOC.com” http://www.joc.com/port-news/us-ports/barge-port-planned-st-marys-georgia_20141203.html
Kinder Morgan/Southern LNG plans to expand its
large facility in Savannah, with direct ocean shipping access, thus avoiding
the extra cost of reloading from ICW barges to ocean-going vessels.
The proposal estimates of employment in the 5,300
range appear to be extremely unrealistic. The Gilman Paper mill at this site
employed only about 1,000 employees. In general, labor-intensive industries
tend to locate in Asia where labor is much cheaper. Increasingly, successful
growth industries find ways to utilize fewer employees per output unit,
compared to industries such as paper-making which utilize technology developed long
in the past. The most desirable technology industries (with minimal pollution,
noise, odor and truck traffic issues) generally do not employ large numbers of
people in the United States.
With the limitations of vessel size and carrying
capacity, how can this site be competitive with other nearby ports such as
Savannah, Brunswick, Fernandina and Jacksonville that do not have similar
capacity limitations and are already well-established?
It appears that the developer either does not know
or does not wish to reveal what uses are planned. In either event, the
“build-out” of the proposed development is very long term (15 years), and the
developer’s representative has stated publicly that no significant improvements
will be made to the property until at least some of the end uses are known.
Any increase in tax revenues and employment will
come at some undefined point in the future. Failure to achieve these desired
results may not be confirmed until after many years of missed opportunity to
pursue more tangible projects.
In summary,
the City of St Marys cannot afford another failed development on this site.
This would tie up the property for an additional extended number of years.
Although there is a natural eagerness to “get
something going”, the City Council has a responsibility to the citizens of St
Marys to carefully examine the economic feasibility, social implications
(quality of life) and environmental ramifications of this proposal AND the
capability of the developer, and to approve it only if all relevant questions
have been answered in a positive way. It is better to reject a proposal that is
not likely to succeed and to wait for a better opportunity, than to buy into an
unrealistic proposal with questionable chances for success.
All
the above is not an argument against the proposed re-zoning.
It
IS a call for the City Council to do a thorough job of examining all aspects of
the proposal, including economic feasibility, specific plans by the developer,
past experience by the developer in similar long-term projects, financial
capability of the developer, examination of past legal issues of the developer
and the developer’s representatives, impact of environmental issues on the
developer’s plans, impact of the proposed property sale on the claims of St
Marys businesses and citizens on the bankruptcy estate, street-front appearance
issues, wood stork rookery issues, traffic issues, water and sewer usage,
probability of the developer obtaining necessary approvals from Georgia DNR, US Army Corps of
Engineers and other regulatory bodies, and very importantly, the wishes of St
Marys citizens.
Some City Council members have correctly observed
that the property owner (the Bankruptcy Court on behalf of the Durango estate) can
sell the property to whomever it chooses - this is not a matter for the City Council
to decide. The proposal sale to ASM Capital/The Port of St Marys, LLC,
apparently is contingent upon approval of the rezoning proposal, which is subject to City Council approval.
Thorough and objective research and public
answering of the questions raised above may indeed provide good cause to
decline this proposal, or it may not. All that is required is for the City
Council to have the resolve to seek the answers that will protect and serve
their constituents - the citizens of St Marys.
Looking Forward:
Although it should have been
done much earlier, perhaps now it is time for the City Council to commission an
objective study of the best uses of this property. This property represents the
most significant economic development opportunity that St Marys will have for
many years in the future. We cannot
afford to waste it!
