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A New Snag in the Saga of Searsport Cargo Terminal

December 28, 2009 - SEARSPORT -- In mid-October, the Maine Port Authority asked more than 50 cargo terminal operators and other potential developers whether they would be interested in developing a terminal for container ships in Searsport.

With the help of its California-based consultants, the port authority solicited "expressions of interest" from targeted developers to determine the level of interest and possible ideas for expanding the marine terminal at Mack Point and building a new terminal on uninhabited Sears Island, across the channel in Penobscot Bay.

Not one company responded by the Nov. 25 deadline.

The lack of interest has renewed criticism of the Department of Transportation's long-standing vision for a deep-water cargo terminal on the northwestern shore of the 930-acre Sears Island. Now some critics are renewing their call for the state to abandon the idea and explore other uses for the island.

"It is time to hang up the cleats," said Stephen Miller, executive director of the Islesboro Island Trust.

The island has long attracted private and public developers. Over the years there have been proposals for an oil refinery, an aluminum smelter, a nuclear power plant and, most recently, a liquefied natural gas facility.

The idea of a cargo port on the island dates back four decades, to when the state adopted a strategy to develop and foster deep-water port operations in Portland, Searsport and Eastport. The Sears Island project gained steam in 1982, when the state bought part of the island.

Work on a cargo terminal started two years later with the construction of a two-mile access road and causeway. That triggered an outcry from environmentalists and eventually a criminal investigation by the federal Environmental Protection Agency into whether the transportation department and its consultant had lied about the extent of wetlands on the island in environmental permit filings.

The investigation was eventually dropped and efforts to get a cargo port resumed. They stopped again in 1996, when Gov. Angus King pronounced the project too costly. By then the state had spent $15 million on the effort.

The next year, the state bought the remaining portion of the island with the plan of reviving the cargo port project someday.

Since then a new cargo pier has opened at Mack Point, across the channel from the island, financed by $16 million in state funds, $2.6 million from the Maine Port Authority, $3.8 million in federal funds and $4 million in private investment.

The latest push for a cargo port on Sears Island is the result of an agreement between opposing factions over acceptable uses for the island.

At the urging of Gov. John Baldacci, a 41-member committee was formed to come up with acceptable uses. The final agreement restricted uses – nuclear power and casinos are banned, for example – and granted a conservation easement that protects 600 acres from development.

The remaining 330-acre parcel remains under the management of the Department of Transportation for transportation uses, including a cargo terminal. The agreement requires that the Mack Point terminal be fully developed before any development is done on Sears Island.

Baldacci endorsed the agreement this year and the transportation department was directed to market the potential for cargo development in Searsport. The department has spent $400,000, working with the Maine Port Authority.

Transportation officials say they aren't surprised that the first marketing effort fell flat, and blame the recession.

John Henshaw, executive director of the Maine Port Authority, which the transportation department appointed to lead the marketing effort, said he has had several inquiries since the Nov. 25 deadline. He would not elaborate.

Transportation officials say they intend to continue marketing Searsport and Sears Island and are optimistic that they will find a developer.

"Right now, ports are operating under capacity and capital is very tight. But we are in this for the long term," said David Cole, the state's transportation commissioner.

Some critics say another cargo terminal in Maine will fail to attract investors, global recession or not.

Chalmers Hardenbergh, who publishes Atlantic Northeast Rails and Ports, a weekly newsletter that follows freight railroad and port issues in New England, the Canadian Maritimes and eastern Quebec, said the state's plans are based on questionable assumptions about future demand for container shipping.

He said existing cargo terminals in the region, such as a deep-water terminal in Halifax, Nova Scotia, have been two-thirds empty. Portland's container operations have struggled to keep busy for years.

Hardenbergh said he doesn't buy the argument that the recession and excess capacity have turned off developers. He said Baltimore just clinched a $105 million deal with Ports America Maryland, which operates Portland's cargo terminal, to build a 50-foot berth, install four cranes and lease its terminal, making it only the second East Coast port to have both a 50-foot berth and a 50-foot channel.

"While Searsport was out looking for someone, Baltimore made the deal," he said.

Becky Bartovics, a member of the executive committee of the Maine Chapter of the Sierra Club, which has long opposed development on Sears Island, said she doubts an international cargo terminal on Sears Island is economically viable, in part because the cost of developing the environmentally sensitive area will scare away private developers.

She was a member of the committee that reached the compromise over Sears Island's uses. She said her group intends to make sure the transportation department holds to the requirement that Mack Point be developed first.

Cole said he expects the global demand for container shipping will double in the next 20 years, once the recession is over. He said it is the department's responsibility to protect transportation assets, such as abandoned railways and other facilities, for the long term.

"There is no timetable on this matter. There is no clock ticking," said Cole.

State Sen. Dennis Damon, D-Trenton, co-chairman of the Legislature's Transportation Committee, said the lack of interest from developers this fall didn't diminish his hopes and expectations that a cargo terminal will someday be built on the island.

He said his committee will take up the matter next month and will likely encourage a new marketing effort.

"I have talked with enough people in government to know there is still interest here," he said.

By BETH QUIMBY, Staff Writer, Portland Press Herald, December 27, 2009


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