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Friday, June 20, 2008

Port authority backing off eminent domain But still interested in Zion land

Jacksonville Business Journal - by Mark Szakonyi Staff Writer

JACKSONVILLE -- The Jacksonville Port Authority's plan to buy about 167 acres along Heckscher Drive -- originally intended as a site for a container terminal -- is on hold as the prospect of moving the potential terminal operator to Dames Point looks promising.

Also on hold is consideration of taking the property, owned by Zion Jacksonville Limited Partnership, by condemnation, authority Executive Director Rick Ferrin said.

Ferrin said he told Abraham Zion, principal of Zion Jacksonville, last week that the authority doesn't plan to exercise its eminent domain power. He plans to recommend that the board rescind its resolution that authorized the staff to pursue condemnation.

"Our need for the property is not immediate," Ferrin said.

Zion still wants to sell the property -- initially planned as the home for Hanjin Shipping Co. Ltd. -- for more than $70 million. But Ferrin said the authority is sticking to its original offer in the mid-$40 millions.

Zion has other entities interested in the property but has had difficulty marketing it because of the "cloud of eminent domain," said Paul Harden, a Jacksonville lawyer representing Zion.

The authority's interest in the property waned after Hanjin said it's open to the authority's idea to have the company develop a terminal on land the authority already owns at Dames Point.

That would make Hanjin next-door neighbors with TraPac Inc., a Mitsui O.S.K. Lines Ltd. subsidiary that will operate Mitsui's 158-acre terminal.

The likelihood of the companies agreeing is good because Hanjin and Mitsui would be able to share security and space. They could also share cranes if they lengthened their docks to meet.

Another alternative is for the authority to wait and see if Zion will lower the price of the land and then buy it.

Or the authority could consider the partnership offered by Zion last week. But the authority's legal counsel is evaluating whether its charter would permit such a deal.

Ferrin said the Zion property would best be used by the authority as an intermodal container transfer facility, a bulk terminal or both. For the bulk terminal option, the authority would have to determine whether pipelines, conveyor belts or both could pass under Heckscher Drive.

In recent weeks, the authority has determined that developing the Zion property as a container terminal poses many obstacles, such as bulkheading, dredging and the need to elevate Heckscher Drive.

The Zion terminal plan would also require property owned by Smurfit-Stone Container Enterprise Inc. To complete a deal with Smurfit, the authority would have to fill in a 130-acre aeration pond and create or buy a similar pond. Hanjin wants to be operating by 2011, and such conditions threaten that date.

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