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Jeff Thoreson
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« on: September 07, 2005, 07:02:44 am »

From today's Erie Times-News:

Authority to hear final shipyard offers
2 companies have plans for Metro Machine site

The two companies vying for Erie's shipyard will have a chance to make a final pitch Friday at the Erie-Western Pennsylvania Port Authority's board meeting.

A local company, Erie Management Group, wants the site. So does Van Enkevort Tug & Barge, an Escanaba, Mich.-based shipbuilder.

Both companies say they could create 200 jobs.

Despite what could be viewed as a hometown advantage, the Port Authority's executive director and several of its board members said Tuesday they prefer Van Enkevort Tug & Barge's proposal.

The board may vote as early as Friday on the group with whom it will negotiate. But first, the board will hear presentations and ask questions of representatives from both organizations, and receive a recommendation from economic development officials.

"They're talking about entering into negotiations for a lease on a facility and we were of the unified opinion that you need to get a lot more information -- or at least a lot more clarification -- of what each party's plans are before you can make a decision,"said Jake Rouch, the executive director of the Erie Regional Chamber and Growth Partnership.

Erie Management Group partnered with Erie-based Logistics Plus Inc. on its plan, which would turn the property into a mixed-use facility that would pull together shipbuilding, ship repair, container shipment and storage and warehousing.

Van Enkevort would work alone, focusing on shipbuilding and ship repair.

The Port Authority's leasing committee met with several Erie County economic development officials Tuesday to talk about the two proposals.

The economic development officials, a team that includes Rouch and Monica Brower, chief executive of the Greater Erie Industrial Development Corp., seemed to lean toward the Erie Management Group proposal, Schreckengost said.

"I do feel like they're leaning that way in the way they talked," Schreckengost said. "But the board is going to make the decision, not GEIDC."

But Brower said her group made no recommendation because it doesn't have enough information yet. They urged the board to meet with the two groups Friday.

"What we said was EMG's proposal was a more complete proposal and that we don't have enough information on the other to even make a comparison,"Brower said. "What we received (from Van Enkevort) was a two-page letter, and none of us had heard their proposal when they came to town."

Dirk Van Enkevort, owner of Van Enkevort Tug & Barge, met with the Port Authority in July to talk about his proposal in detail.

Schreckengost said he prefers Van Enkevort's plan for the shipyard for two reasons.

First, Erie Management Group wants the Port Authority to repair and change parts of the shipyard, while Van Enkevort has asked the Port Authority for nothing, Schreckengost said.

During the meeting, which was closed to a reporter from the Erie Times-News, Schreckengost told the board that he put the estimated cost of changes at $9 million, board member Jeffrey Johnson said.

"That's enough to make me lean toward Van Enkevort,"Johnson said. "Van Enkevort's proposal wasn't subject to any of those costs."

Second, Schreckengost said he favors Van Enkevort's proposal because it focuses only on shipbuilding and ship repair. Dirk Van Enkevort, the company's owner, has said he has $100 million worth of contracts for shipbuilding and ship repair in the next five years.

The Erie Management Group proposal involves many different companies, including shipbuilders who have pledged $57 million in vessel construction over two years. It also includes a ship-repair company that has guaranteed contracts with three companies for ship repair, plus contracts for the construction of six barges. Logistics Plus, meanwhile, has commitments from seven companies interested in warehousing services based at the shipyard.

Schreckengost called Erie Management Group's proposal "convoluted."

"We need more information on EMG," he said. "Their plan is convoluted with lots of generalities."

But Brower said the Erie Management Group proposal was "very complete."

"They had lots of detail about what they're planning to do," she said.

Erie's shipyard, the former Litton shipyard facility, is at the foot of Holland Street. It is one of only two shipyards on the Great Lakes capable of manufacturing 1,000-foot ships. The lease on the shipyard is $500,000 a year.

Because of the shipyard's capabilities, the Port Authority's decision is an important one for the city, board President Don Inderlied.

"It's a major facility in the city that has the potential for significant job generation," he said. "It's nice to have an economic development issue where you have two viable opportunities. It's too bad we can't accommodate both."
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