Jaxport officials said Monday they have settled on the financial framework for a deal bringing Hanjin Shipping Co. Ltd. to Jacksonville, setting the stage for Hanjin's board to vote as early as next month. The port would finance and build the terminal at an estimated construction cost of $176 million, according to a summary given to port board members.
The Korean-based shipping giant would make payments to Jaxport in an amount high enough to fully cover the annual expense of paying down the port's debt for the terminal.
If Hanjin and the port seal the deal, the terminal would open in 2011 or early 2012. Hanjin's terminal would handle as many as 1 million cargo containers a year. The shipments would generate up to 5,700 jobs at the terminal and at shipping-related businesses, according to Jaxport projections.
Hanjin would join Mitsui OSK Lines as the second Asian shipping company at Jaxport.
"This is a great one-two punch for Jacksonville," board Vice Chairman David Kulik said after the meeting.
Port officials said it's highly unlikely a company as financially strong as Hanjin would default on its obligations under such an agreement. But the proposed deal would give some protection to Jaxport by requiring Hanjin to post a letter of credit in the amount of the next year's debt payment.
In that worst-case scenario, Jaxport would draw on the letter of credit to pay the debt installment for a year while seeking another tenant for the terminal.
The Jaxport board did not vote on the proposal but gave a green light to sending the framework to Hanjin. Hanjin's board could vote on the deal at its Nov. 11 meeting. The Jaxport board would follow by voting on the agreement.
Jaxport and Hanjin signed a memorandum of understanding in October 2007 for Hanjin to locate in Jacksonville. Mayor John Peyton, who attended that signing ceremony in Seoul, said it's taken longer than he originally expected to finalize a deal, but the talks are headed in the right direction and appear "ready to come in for a landing."
He said the length of time for negotiations isn't significant when compared with the "decade after decade" of economic impact Hanjin would bring to Jacksonville.