Erie, Pennsylvania shipyard

[Jeff Thoreson]

From today's Erie Times-News:

http://www.goerie.com/apps/pbcs.dll/article?AID=/20050901/FRONTPAGE/509010384

Erie is about to return to the shipbuilding business.

But the company that will take over the Metro Machine property still hasn't been decided.

The Erie-Western Pennsylvania Port Authority received business proposals from two companies Wednesday, the deadline given to submit plans.

Both companies believe they can create 200 jobs.

The Port Authority will choose a company at its Sept. 9 meeting.

The lease on the shipyard, located at the foot of Holland Street, is $500,000 a year.

The board will choose between Erie Management Group, a joint venture of shipbuilders organized by a hometown group of investors; and Van Enkevort Tug and Barge, an established shipbuilder from Michigan.

Dirk Van Enkevort, whose company is based in Escanaba, Mich., plans to use the shipyard for ship building and ship repair.

"I'm counting on it," Van Enkevort said. "We have work lined up. We have a ship scheduled for repair in December. We need to start construction on the barge next summer."

Erie Management Group is partnering 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.

"Our project is a long-term play," Erie Management Group President Stan Shumway said. "We're looking to establish a permanent presence there. We think these things can grow in their own right and perhaps spawn other things."

Members of the GEIDC economic development team will evaluate the proposals and make a recommendation to the port, said Ray Schreckengost, the authority's executive director.

Herb Packer, executive director of Office Of PennPorts, a state agency that facilitates port development, said maintaining the building as a shipyard is important for several reasons.

First, he said, for every two shipbuilding and repair jobs in the state, more than one spinoff job is created. Also, maritime-related jobs, on average, pay 10 percent more than traditional manufacturing jobs, he said.

Both proposals include plans for shipbuilding and ship repair, making them year-round facilities.

The main differences between the two proposals:


 Van Enkevort said his company has five years of work already lined up, totaling more than $100 million. His biggest project is a 740-foot barge and 135-foot tug. He built a similarly sized barge and tug in 2000 at a cost of $38.3 million.

In contrast, Erie Management Group has committed to two years of work, totaling $57 million in vessel construction. The local group also has already set up ship repair contracts with several shipping companies and have contracts from six storage and warehousing companies interested in using portions of the shipyard.


 The Erie Management Group and Logistics Plus plan is a joint venture. The two local businesses would also include Bender Shipbuilding and Repair of Mobile, Ala., and shipbuilder Peters Kampen, of the Netherlands, as tenants. They would also work with the six storage and warehousing companies.

Conversely, Van Enkevort would work alone.

Erie will benefit no matter which company the Port Authority chooses, Packer said.

"Economically, Erie should be a big winner," he said. "It puts Erie on the map of the Great Lakes again as an active shipbuilder."

Erie's shipyard is one of only two in the Great Lakes capable of building vessels of 1,000 feet. The other is in Sturgeon Bay, Wis.
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Peters Kampen can be found on the web at http://www.shipyardpeters.nl/

[Pedro Baptista]

The Port Authority will choose a company at its Sept. 9 meeting.

Does anybody knows which company took over?

Thanks!

[Jeff Thoreson]

VanEnkevort got the lease. I blew off two classes this afternoon to go to the meeting, and the Port Authority voted 12-0 to accept VanEnkevort's proposal. They will now firm up the contract and start work in December.

[Jeff Thoreson]

According to the local news this evening, in addition to building a new tug/barge unit, VanEnkevort will begin work on redoing the engines in the tug Olive L. Moore in December, and will be converting four steamers into tug/barge units.

[Jeff Thoreson]

And from today's Times-News:

Port picks new tenant

By KARA RHODES
 
Michigan shipbuilder selected for Erie site

Shipbuilding is returning to Erie's bayfront.

The Erie-Western Pennsylvania Port Authority voted Friday to negotiate a lease with an Escanaba, Mich.-based shipbuilder to operate the city's shipyard, one of the largest on the Great Lakes.

It was an important decision for the city because Van Enkevort Tug & Barge officials say they'll need 200 employees in the first 12 months to repair ships and build a 740-foot barge and 135-foot tug.

"We're going to have an active port with people working in great jobs," said Jake Rouch, the executive director of the Erie Regional Chamber and Growth Partnership. "That's a great thing."

Van Enkevort was one of two companies interested in the shipyard.

Erie Management Group, local investors, were also vying for the old Metro Machine property.

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

But Erie Management Group also wanted the Port Authority to make a number of improvements to the property, which Schreckengost estimated would have cost $9 million.

Van Enkevort is asking the Port Authority for no changes to the building and has agreed to the $500,000-a-year lease.

That fact was one of the reasons Port Authority Executive Director Ray Schreckengost said he liked Van Enkevort's proposal.

He said he also liked the fact that Van Enkevort has $100 million in contracts for shipbuilding and ship repair over the next five years.

The port agreed.

"He had a plan in place," board member Matt Gress said after the meeting. "He has work that has to be done, and that he needs to start immediately."

Rouch and Monica Brower, chief executive of the Greater Erie Industrial Development Corp., advised the Port Authority to hold its decision and negotiate with both companies.

The authority, however, felt it would lose Van Enkevort's bid by waiting because he has a contract for work in December. The December contract is for a $5 million engine conversion to a tug and barge, which together total 714 feet in length.

Rouch said that even though the Port Authority went against the advice of an economic development team, he felt the shipyard is getting a "good tenant."

"We were on the catbird's seat because we had two great proposals," Rouch said.

The authority met separately with officials from Van Enkevort and Erie Management Group before voting Friday. Along with the board and Port Authority officials, Jake Rouch and Monica Brower were invited to the meeting, along with State Sen. Jane Earll,of Fairview, R-49th Dist., and state Rep. Flo Fabrizio of Erie, D-2nd Dist.

An Erie Times-News reporter and others at the meeting were asked to leave during the presentations and discussion on the proposals.

Dirk Van Enkevort, owner of Van Enkevort Tug & Barge, said the board questions focused on financing.

They also asked about commitment, said John Chapman, an engineer who will work for Van Enkevort.

"They wanted to know if we were just here to make a buck and move on or if we are here to create jobs and make a difference in the community," Chapman said. "That answer was easy because it's in our hearts."

Chapman, who currently works in Sturgeon Bay, Wis., will move to Erie. Dirk Van Enkevort plans to rent an apartment here within the next few months.

Stan Shumway, president of Erie Management Group, said he is disappointed with the port's decision.

The port voted to negotiate with Van Enkevort through Sept. 23. If that negotiation fails, it will then return to Erie Management Group's proposal.

But Erie Management Group withdrew its proposal immediately after the vote in a letter to Schreckengost.

The letter, signed by Shumway, said that while disappointed, his company is not angry by the Port Authority's decision.

"Our withdrawal, while submitted with reluctance, will allow us to deploy our capital elsewhere to further enhance the economic future for Erie," Shumway wrote. "We will cheerfully support your future activities."

Shumway said he felt the Port Authority viewed his group as "latecomers" to the proposal process.

"I thought ours was the most strategic vision, and they obviously felt differently," he said. "But at the end of the day, Erie is going to be building ships, and that's a good thing. We'll use that money elsewhere for Erie. So I don't see how the community loses."

Erie Management Group is led by Erie businessman Pat Black, whose father helped build Erie Insurance Group. Black has recently been involved with several high-profile properties, including the bid on the shipyard and a July announcement of a $40 million industrial development at the former International Paper Co. site.

This week, City Council approved a $500,000 Black-led plan to renovate Dickson Tavern, believed to be Erie's oldest building.