RESERVE, La. — On Oct. 10, the Port of South Louisiana announced that it is delaying its plan to ask the State Bond Commission to issue $400 million in bonds needed for the port to buy Avondale Global Gateway from maritime company Host.
A PortSL spokesperson said the port is hitting pause to “thoroughly consider and address questions raised by the commission in September.”
In January, PortSL announced plans to purchase the former Avondale Shipyard from Host for $445 million. Supporters said the deal would provide a boost to the Jefferson Parish economy. Critics said the price was too high and Avondale’s current revenue and future prospects weren’t robust enough to justify the investment.
Avondale, once the area’s biggest employer, closed permanently in 2014. Four years later, Host bought the dormant 254-acre site for $60 million and said it invested approximately $100 million to bring it back into commerce as a logistics hub (essentially, a private port). The company, which moved its headquarters from Virginia to Avondale this year, said it grossed $46 million in total revenue at Avondale in 2022 from the property and from stevedoring.
Host’s long-term goal is to rent space at Avondale to manufacturing tenants in renewable energy and other promising sectors. Gulf Wind Technology, which designs wind blades, and several other businesses rent space at Avondale now, and Host hopes to attract others. So far, efforts to land an anchor tenant have been unsuccessful.
In August, Host agreed to drop Avondale’s sale price from $445 million to $330 million, but members of the Bond Commission expressed skepticism about the deal at a Sept. 21 meeting, when PortSL and Host hoped to get approval for the bonds necessary to complete the transaction.
“We believe the delay is warranted to thoroughly consider points raised by the State Bond Commission and to give members time to analyze the modified agreement the Port reached with Host in late August,” said Paul Matthews, CEO of PortSL, in an Oct. 10 press release. “We believe this acquisition will further enhance our profile and allow Louisiana to compete with ports along the Gulf Coast and around the world. However, we recognize the significance of this transaction and plan to evaluate this sale in light of questions brought by Bond Commission members.”
A PortSL spokesperson emphasized that taxpayers won’t face any risk from the deal because the purchase would be funded by privately held bonds.
The port and Host plan to draft an extension to the closing deadline that would require either party to provide 30 days’ notice to terminate the purchase and sale agreement.
