COOS BAY - The Oregon Legislature committed $60 million in state funding for the Bay Area Tuesday, smoothing the way for the dredging of Coos Bay's shipping channel and a hope the pledge will lure a division of the world's largest shipping company to build a marine cargo terminal on the North Spit.
“I am deeply appreciative of the support I have received in getting this bill passed,” said Sen. Joanne Verger, D-Coos Bay. “This is an incredible economic development opportunity not only for my district, but the entire state of Oregon.”
House Bill 5036, which Verger said Gov. Ted Kulongoski has promised to sign, secures $5 million for the dredging project this year, if APM Terminals North America commits to coming to Coos Bay. An additional $55 million in state money would be spent on the project over the next four years.
The $5 million would be spent on preliminary environmental work and sends a signal to APM, the U.S. operating division for AP Moeller Maersk, that Oregon wants the company to build in Coos Bay.
The bill, which Verger said was tied to spending millions of dollars in lottery funds on a parking facility in Hillsboro and TriMET's light rail system in Portland, passed the Oregon House on a 42-18 vote. The senate approved the measure Tuesday, voting 27-2.
“We had tremendous support in the building for that bill and it got thrown in with some things that some people didn't like,” Verger said. “They bit the bullet and voted.”
Verger surmised the 18 House members voted against the bill because of other spending packages.
“That brought some pushback,” the former Coos Bay mayor said. “They stuck with us in the end.”
The first installment of the dredging funding is considered a critical step toward negotiations between the Oregon International Port of Coos Bay and APM Terminals. The money won't be spent until an environmental impact statement is completed and an agreement is hammered out with the company. The state investment could leverage additional federal dollars pouring into the project, as well as a nearly $1 billion expenditure from APM Terminals, Verger said.
“It's a great day,” she said. “Now we just have to hope that the business plan comes together for the company and that they will actually come. The board of APM will look at it and decide if it makes sense financially for them.”
If it does, it could mean up to 300 jobs for area longshoremen, Verger said. APM Terminals' officials are scheduled to meet in November, Verger said, to decide on where they want to build. In March, when Verger named the company publicly for the first time, APM was eyeing constructing the cargo terminal in Coos Bay, Canada or Mexico.
Port of Coos Bay director of communications and freight mobility Martin Callery said Tuesday the dredging project would deepen the lower end of Coos Bay from 37 to 51 feet and widen the shipping lanes from 300 to 500 feet, along a 71/2-mile stretch from the jetty to Roseburg Forest Product's chipping terminal.
The overall project includes the dredging of the bay, the rehabilitation of Coos Bay's north jetty and a turning basin for the cargo terminal, Callery said. Port officials still are bound by a confidentiality agreement from naming the company, but Callery said the company likely would make a $250 to $750 million investment by building the terminal, rail infrastructure, a container yard, docks and wharves.
According to APM Terminals documents, the company needs 275 acres for its multi-user terminal and 4,000 feet of berthing space. The company seeks a location for an annual capacity of more than 2 million 20-foot-long, standard-sized containers - a magnitude that would eventually rival the Port of Tacoma.
Callery was elated with Tuesday's news.
“It demonstrates to the corporation - and Congress - that we are serious about this project,” he said.
The project was the brainchild of a hodgepodge of Southern Oregon business leaders and politicians who first sat down in the spring of 2006 to figure out how to best use Southern Oregon's assets to bring economic prosperity to the region, Callery said. At about the same time, port officials were just beginning talks with the cargo terminal giant.
Support for the project came from leaders realizing the terminal would “not just create jobs for the Coos Bay waterfront,” Callery said, but also for “the transportation sector throughout the state” and Pacific Northwest.
“Everybody can benefit from it,” Callery said.
It was that reality that greased strong support for the project on both sides of the aisle in Salem. Sen. Betsy Johnson, the chairwoman of the Ways and Means Subcommittee on Transportation and Economic Development, heard the first iteration of the bill - known in February as Senate Bill 21 and carried by Verger. At first, Johnson said the Verger legislation, dubbed the Oregon Gateway bill, needed to be considered based on statewide supply and demand. But during the legislative process, Johnson said, she got the information she needed to back the project.
“Were my questions answered? Absolutely!” the Scappoose Democrat said Tuesday. “And I have ended up being a big advocate for this project. The state of Oregon has made an investment in the South Coast, and I am happy to have been a part of that.”
Johnson credited the South Coast's legislators with the bill's success.
“Joanne Verger and Arnie Roblan have just worked tirelessly - tirelessly! - to advance this bill,” Johnson said.
Verger and Callery noted that Rep. Susan Morgan, R-Myrtle Creek, also was a catalyst in brokering support amongst Republicans, while Johnson also credited APM.
“The company's willingness to provide information shouldn't be downplayed,” she said. “Their representatives were here in the building to answer the technical questions. And from that, from working with them, what one comes away with is a clear impression that they're certainly interested in Coos Bay and the Southern Coast of Oregon.”
Johnson described the passage of the bill as a “first step on the way toward getting the full green light for a very significant project for the entire state.”
Representative Wayne Krieger, who also lobbied for the bill, agreed that it will be a benefit to communities throughout the state, as tax revenues will roll back into Salem.
“The people all the way from Brookings clear to Florence are going to be affected by that port and the economic opportunity it's going to provide,” Krieger said, adding that the effort to get the bill passed was nonpartisan. “I just think it's a great project, and it will help a lot of people, especially the middle class with family wage jobs.”
While Tuesday's political action is a crucial step, the project is years from completion. The U.S. Army Corps of Engineers will oversee the project, Callery said, and a two- to five-year study would need to win approval before the dredging could begin. Port officials said the company wants to be operational by 2014.
Johnson said rail capacity and permitting issues are hurdles that still need to be overcome, but she believes “those issues will resolve themselves to everyone's benefit.
“I think this is a prime example of the Legislature thinking like Oregonians, not thinking parochially,” Johnson said. “The gist of it is, if it becomes clear that the South Coast is able to deal with the transportation infrastructure for these containers, that's good news for the entire state.”
Verger said the deal also hinges on negotiations between APM and Central Oregon and Pacific Railroad. Callery stressed the importance of that partnership, as well, and how the project has the potential to create more distribution centers in the I-5 corridor.
The marine cargo terminal also would bolster the mass shortage of container capacity up and down the West Coast, Callery said. Trade analysts predict, he said, that trade will increase by 50 percent by 2020, yet the current capacity in ports in Long Beach and Oakland, Calif., Seattle and Portland can't meet the demand.
Coos Bay could not only help shrink that gap by providing more access to international trade, but also serve as a potential gateway to the success of Southern Oregon.
“The APM container shipping company's expertise, skill, experience, knowledge, and financial strength are simply unrivaled, and I look forward to a decision that leads to a long future with them,” Verger said.
- World Editor Kathy Erickson and Staff Writer Jessica Musicar contributed to this story.