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Port authority offers more than $40M

 

Jacksonville Business Journal - by Tony Quesada Staff Writer

JACKSONVILLE -- The Jacksonville Port Authority has offered to pay in the mid-$40 millions for about 167 acres it intends to be the site of a future container terminal.

The offer, sent in early February, comes about two months after Abraham Zion, principal of Zion Jacksonville Limited Partnership, which owns the land, sent the authority a signed contract offering to sell the property for more than $70 million.

If Zion does not accept the authority's offer by early March, it likely will file a lawsuit for condemnation with the expectation of acquiring title to the property by eminent domain within two months, Executive Director Rick Ferrin said.

Ferrin has said much of the authority's future "hinges on the acquisition of this property."

Lawyers representing Zion did not return phone calls seeking comment. But David Edwards, one of the lawyers who has represented Zion, said in January that if the authority countered with a much lower offer, his client would likely reject it.

In January, the authority's board of directors authorized its staff to use eminent domain as a last resort to acquire the Zion property.

The authority has been negotiating with Zion for more than two years, but the authority's urgency has increased since it signed a memorandum of understanding in October 2007 with Hanjin Shipping Co. Ltd. The memorandum calls for the South Korea-based ocean carrier to build a 170-acre terminal in Jacksonville by 2011, capable of handling 1 million 20-foot-equivalent units of containerized cargo a year.

The authority is also talking with Smurfit-Stone Container Enterprises Inc. about buying adjacent land. The Zion and Smurfit-Stone parcels would provide more than 300 acres to build a terminal and possibly an intermodal container transfer facility.

The property involved in the authority's offer does not include several acres of wetlands that were part of the proposed sale contract that Zion sent to the authority in December 2007. But the difference in footprints does not entirely account for the difference between what Zion and the authority believe the land is worth.

One issue affecting the land's value is that most of it is separated from the waterfront by Heckscher Drive. As a result, the authority is helping to pay for a multimillion-dollar project to elevate the road so that containers can pass underneath it, between the waterfront and the back of the property.

Though the Zion property would cost more to develop than other land the authority has built on, it's been identified as among the few remaining tracts suitable for port use.

The authority sent the offer to Zion's lawyers, who subsequently asked for and received an appraisal the authority used to craft its offer.

If the authority resorts to eminent domain, it will mark the second major parcel for which it's exercised that power in about two years. A judge ruled in December 2006 that the authority had established a public purpose and reasonable necessity to take about 70 acres belonging to Keystone Coal Co.

The authority has not taken title to that property because it chose to follow the process for a slow take, in which a condemning authority waits until after a valuation trial to decide whether the price is acceptable.

A valuation trial for the Keystone property is scheduled for April 21, having initially been scheduled for May 2007. Pretrial rulings regarding the admissibility of evidence resulted in the property owner's lawyers having to revamp their case, and they were given more time.

In the case of Zion's land, authority officials said they would pursue a quick take. In that process the authority would assume title immediately after and if a judge rules the condemnation is proper. The cost would be determined later through settlement negotiations or a trial.


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Revised: February 10, 2010 .

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