Port operator wants to talk about expansion plan
ND Port Services hopes to get MADC on board for new rail
Trending
The operator of Minot's intermodal facility hopes to capture new investment to build out port infrastructure and is asking for the city's help.
Greg Johnson, president of North Dakota Port Services, and William Sprague, managing director of Headwaters MB, Denver, asked the Minot City Council Dec. 4 to aid in bringing stakeholders, particularly Minot Area Development Corp., to the table to discuss how to advance the intermodal facility as a player in economic development and job creation.
"We understand that not all discussions and all business discussions consummate into actions. We totally understand that. People have different perspectives. We have different objectives," Sprague said. "But we really have not been able to engage in a comprehensive discussion with all those people."
MADC President Stephanie Hoffart said this week that her board has not seen NDPS' latest project plans but members are open to listening.
"We are going to at least sit at the table," she said. Mayor Chuck Barney attended an MADC executive committee meeting to request the participation after hearing from port representatives last week.
With an $80 million investment on the line, Sprague had urged the city to move quickly.
"When we have momentum around a project and around financing, moving and taking advantage if that momentum is important. Losing that momentum is going to be very difficult to recover," he said.
"I can also tell you that we are going to do our due diligence as a community," Barney responded. "If that takes some time, so be it, but we want to make sure it's done right from the community's perspective, and I am sure you want to make sure it's done right from your perspective."
Headwaters, an investment banking firm, has been working with NDPS to raise capital to continue building out the port.
"We have had our circumstances, issues, in putting the funding together on a package such as this. Being the one and only type of project that exists in the U.S., it's been challenging," said Johnson, referring to the unique nature of Minot's facility.
Sprague said they set out to generate $125 million in investments in the summer of 2013, but the transaction fell through, primarily because a European infrastructure fund became concerned about the longevity of the energy boom.
"In hindsight, they might have actually been right," Sprague said. "So what Greg has done - and we have helped him with that - is completely revise the business model and not focus on the energy market but focus exclusively on the core pillars, or the economic drivers, of this community, which is agriculture and creating a distribution and logistics center to be the core hub between Chicago and Seattle.
"We put together financing for that - $80 million - and prepared to move quite expeditiously to make that happen," he added.
At his office last week, Johnson explained NDPS currently operates with three tracks of about 4,500 feet. Limitations with those tracks preclude handling more than a few cars at a time. NDPS would like to construct four rails of 9,500 feet to enable the port to serve more cars and create a more viable operation.
Making it happen requires sitting down with MADC to talk about property issues, Johnson said. MADC owns 800 acres, including land on which NDPS proposes to expand rail.
The city has been seeking lease payments from NDPS that it states are overdue. In court documents, NDPS alleges the city breached the lease by failing to maintain the property. First Western Bank filed foreclosure against NDPS in May for delinquent loan payments. That legal debate continues in North Central District Court.
Johnson said the $80 million investment would provide capital for NDPS to exercise an option to purchase the MADC-owned land proposed for the track expansion. It also would enable NDPS to settle with the bank, he said.
Development of the port began in 2005. NDPS was established in 2007, and transloading activity began occurring about 2010. Johnson said the port is active these days, mostly with smaller transactions and some oil industry-related movements.
"We still have the energy to some degree, and we have a lot of requests from the energy industry for in-bound," Johnson said.