Port Of South Louisiana To Acquire Avondale Site

The Port of South Louisiana (Port SL) has reached an agreement with T. Parker Host to purchase the former Avondale Shipyard on the west bank of the Mississippi River in Jefferson Parish. T. Parker Host, which purchased the 254-acre property from Huntington Ingalls in 2018 for $60 million, has since redeveloped the property into a multimodal terminal. Host has branded the facility “Avondale Global Gateway.” During a media event at the site late last year, Host said it had spent more than $100 million on Avondale so far.

Opened in 1938, Avondale Shipyard grew to become Louisiana’s largest employer, with around 26,000 employees at its peak. From small repair and new build work, the shipyard began building for the U.S. military during World War II. In the decades that followed, Avondale went on to build a wide range of ships for the U.S. military, including destroyers and destroyer escorts. The USS Somerset, an amphibious transport dock, was the last vessel built at the shipyard before it closed in October 2014.

The acquisition would prove a significant move for one of the nation’s largest ports by tonnage, Port SL CEO Paul Matthews said. The Port of South Louisiana, in addition to its liquid bulk and industrial trade, handles more than 50 percent of the nation’s export grains. Total tonnage in 2021 was just below 230 million.

“The state’s largest port is ready to own the state’s greatest industrial icon,” Matthews said in announcing the agreement. “This acquisition establishes Avondale Global Gateway as a permanent economic development arm of the state of Louisiana. The port is laser-focused on expanding our operations and bringing prosperity to the southeast Louisiana region.”

The port also announced plans to apply for $445 million in bonds to execute the purchase, with T. Parker Host retained as the terminal operator. According to the port, “existing revenue generated on the property” would service the bond debt, although port officials have met with officials at the state and federal levels in search of additional funding for the acquisition.

The port didn’t give an estimated closing date for the acquisition.

“Host saw the potential of the Avondale site and stayed the course through significant challenges to realize what Avondale could become,” said Adam Anderson, president and CEO of T. Parker Host. “Our team of 300 Louisianans has returned the site to commerce as Avondale Global Gateway. Host will continue our work at Avondale as the terminal operator. As we look toward the next phase of Avondale Global Gateway’s evolution, we are confident this public-private partnership with the Port of South Louisiana positions the site at the forefront of the new frontier of renewable energy development, propelling the state of Louisiana into this new economy.”

According to a 2022 economic impact study of Avondale, Host’s master plan for the facility would require more than $886 million in capital investment between now and 2026. It’s unclear if Host’s master plan will remain in place or which entity will shoulder the capital investment burden going forward.

Today, Avondale is equipped with three ship-to-shore cranes, a maximum draft of 47 feet, one 850-foot berth, one 1000-foot berth and two Panamax-capable berths. There is fleeting capacity at the site for 80 barges and more than 1.5 million square feet of convertible warehouse space. There is a 300-ton access road that connects the riverfront to the region’s highways, and Avondale has direct connections to the Union Pacific Railroad. According to Host, there is also both indoor and outdoor Foreign Trade Zone storage.

Besides being a major expense for the Port of South Louisiana, which reported total operating revenues of $15.7 million in 2021 and an operating income of just under $1.3 million that year, the acquisition also marks a noteworthy expansion beyond the port’s traditional jurisdiction. Historically, the Port of South Louisiana’s jurisdiction has covered both banks of the state’s “river parishes” of St. Charles, St. John the Baptist and St. James. Jefferson Parish, where Avondale is located, is part of the Port of New Orleans’ traditional jurisdiction.

Five years ago, Jefferson Parish officials voiced displeasure with what they saw as the lack of river-based development there by the Port of New Orleans. That led in 2017 to the establishment of a task force charged with growing commerce along the riverbank in Jefferson Parish.

That task force, reportedly, was neither aware of the agreement for Port SL to purchase Avondale from T. Parker Host nor part of deliberations between the two parties. The port’s board of commissioners unanimously approved the agreement during its meeting January 9.

Current Jefferson Parish political and business leaders voiced support for Port SL taking over Avondale.

“This acquisition of Avondale Global Gateway sets the stage for exciting new developments at the waterfront industrial park and will serve as a catalyst for new economic activity in Jefferson Parish and across our region,” Jefferson Parish President Cynthia Lee Sheng said. “Jefferson Parish is committed to a long-term partnership with the Port of South Louisiana, and we look forward to the continued job creation and tax generation for schools, public safety and infrastructure that Avondale Global Gateway will bring to our community.”

Jefferson Parish Economic Development Commission (JEDCO) President and CEO Jerry Bologna echoed that praise.

“JEDCO led the effort to bring the former shipyard back into commerce in 2018,” Bologna said. “We thank T. Parker Host for helping us achieve that goal. Now, we applaud the Port of South Louisiana for bringing an even greater focus to this asset. Port of South Louisiana’s emphasis on renewable energy aligns perfectly with goals outlined in the Jefferson EDGE, JEDCO’s economic development strategic plan. We look forward to the job creation, investment and impact that will result from this partnership.”

One vocal detractor of the purchase agreement was Conrad Appel, a former Louisiana state senator from Jefferson Parish who also served on the Port of New Orleans’ board of commissioners.

“Avondale is located in the jurisdiction of the Port of New Orleans,” Appel said in a post on his Facebook page. “There may be serious legal questions about this acquisition. On the other hand, it reopens the discussion that many of us tried for decades to have. Why do we have five jurisdictions competing for resources and business on the Lower Mississippi River? Why is there not a unified port authority and a master plan?”

Appel pointed out that the Port of New Orleans previously looked at the viability of the Avondale site and concluded it was “functionally obsolete.”

“The cost of bringing ships further upriver, the cost of pilots fees, the inability to handle large quantities of containers, the decline in the use of breakbulk cargo shipping, the lack of rail on dock facilities, the unattractiveness of the Mississippi for liner services, competition with East Coast ports that are closer to population centers, and so on, all contribute to Avondale’s economic shortcomings,” Appel said.