SwiftShips/Apex: No point in continuing negotiations without a serious partner. Company looking at other sites.

Chairman of Apex, Lutfi Hassan, sent a letter dated April 1 to John LaRue, Executive Director of the Port of Corpus Christi suspending negotiations for Naval Station Ingleside. Hassan reiterates his interest in the property and the local labor force, but says they are “contemplating the suspension of talks for NSI until we believe we have a serious partner in negotiations.” Hassan writes, “we believe that unnecessary roadblocks have been put in place since we began our discussions and there is not a local consensus on how to move forward in the redeveloping NSI.”

The letter says Apex considered a suggestion by LaRue to buy the base instead of renting it. Apex said they would be interested if the purchase didn’t require $25-30 million down. Tom Moore sent an email in response saying the Port would require 25% down on the estimated $130-150 million purchase. That meant Apex would be required to put down $30-40 million.

In addition to assuming the maintenance costs, taxes and fees, a recent tour of the base reveal significant deterioration of parts of the base since December of 2009, which would require even more capital investment on their part.

Hassan expresses a shock at the lack of organization between entities regarding a coordinated economic development reaction, “We have not seen any efforts mad by you or your team to create incentives to move the 500 plus initial jobs APEX/SwiftShips is planning on bringing got NSI. No work has been done by the economic development team to identify potential funding at state or federal levels.”

He goes on to say, “We are a real company with real jobs who have been trying to close this deal since December 2009.” Hassan may be referring to a supposed last minute “offer” by SRV Marine to buy the base. The only problem is SRV Marine, produced by Col. Dennis Beal of A&M, has neither a website nor a track record anywhere.

Hassan refers to an attached offer by St Mary’s Parish, Louisiana. The letter from the Parrish President, Paul Naquin, Jr. of Franklin makes an offer from the Parish, the state and the Port of West St. Mary. It includes up to 1500 acres of land, buildings built to suit, favorable lease rates, not property taxes and building construction funded through tax exempt bonds. In addition it says, “The port has a modern ship yard designed and engineered and makes this available to SwiftShips at not cost.

The letter goes on to say that St. Mary Parish has the highest number of aluminum welders and ship fitters in the state, that they will provide free training to upgrade other welders at no cost to Apex. On top of that they would rebate 5-6% of annual payroll for ten years, provide a 4% sales tax rebate from and $10 million from the state. In addition they would offer a foreign free trade zone to offset tariffs and they are working with a power company to offer competitive rates.
It seems that Apex is fast reaching the end of its rope dealing with some port commissioners’ resistance to any deal other than A&M and the sloppy way in which they have been dealt with. Hassan writes, “Unless we hear from the port leadership with a reasonable offer along the lines that Mr. Gill Proposed your meeting and appropriate, comparable incentive to facilitate job growth, we see no point in continuing our negotiations.”

These concerns were echoed in an email by an Apex representative to a local supporter of the proposal, “A 1,000 acre seaport and its attendant economic accelerators, do not spring up without a strong international effort. Other cities we are engaged with look at Apex’s international access and the jobs it can immediately provide, and want to partner to create opportunities for their community.” The email goes on to say, “I can’t tell you how perplexed we are about he push back we’ve gotten. We are the customer and not he unwelcome salesperson. How we have gotten here I don’t know, but certainly our Chairman has determined that it will no longer continue.”