RESERVE, La. — On Aug. 30, the Port of South Louisiana Port Commission voted to purchase Avondale Global Gateway from Host for a revised price of $330 million.
In January, PortSL announced plans to buy the former shipyard, which had recently been converted into a logistics hub, for $445 million. The deal earned its fair share of critics, who said the price was too high.
Now, after an extended due diligence period and the revised purchase price, PortSL CEO Paul Matthews is as bullish on the plan as ever.
“Avondale Global Gateway represents a transformational opportunity for the Port of South Louisiana and this entire region,” said Matthews in a press release announcing the new purchase price. “We are experiencing dynamic shifts in global trade and logistics, and the acquisition of Avondale Global Gateway – while maintaining terminal management from Host – presents an opportunity for PortSL to reinforce its position as a leading hub for commerce, not just in Louisiana, but along the entire Gulf Coast and around the world.”
Among the site’s attractions are existing logistics infrastructure and rail connections originating on the west bank of the Mississippi River.
Avondale, known for building large naval destroyers, was once the state’s biggest employer. But times changed and the shipyard eventually closed for good in 2014. Host purchased the 254-acre site for $60 million in 2018 from shipbuilder Huntington Ingalls and said it invested $150 to bring it back into commerce as Avondale Global Gateway.
Port SL will seek revenue-backed bonds to fund $280 million of the final purchase price and Host will take on a $50 million seller’s note.
After PortSL takes ownership of the property, Host will act as terminal manager and stevedore.
The port said it completed an extensive due diligence period that included an initial financial assessment, real estate valuations, physical site inspections and environmental reviews. This process led to the revised purchase price. One reason for the change is the “need for time to further develop the property to achieve its full capacity,” said a port spokesperson.
Host Chairman and CEO Adam Anderson — who moved his company’s headquarters from Norfolk, Va., to Avondale this year — said this deal will help achieve that goal.
“In 2018, we had a vision for completely redefining Avondale Shipyards to create Avondale Global Gateway,” he said. “Since then, we have turned a derelict site into a profitable center of commerce, created hundreds of jobs, and secured tenants in our core industries of renewable energy, construction materials, and sustainable food products.”
Host said it grossed $46 million in total revenue at Avondale in 2022 from the property and from stevedoring.
The port said it will seek approval for the purchase from the State Bond Commission at its Sept. 21 meeting.
“A project of this magnitude was always going to take time,” said Matthews. “We have done our due diligence, looked at this project from every angle and have worked to ensure the State of Louisiana gets the best deal possible. I am excited that we are nearing the end of this process and am looking forward to a bright future as we continue the efforts of Host in restoring AGG to its former glory.”
