Jaxport exercises eminent domain: Jacksonville (FL) Business Journal, 11/20/05

By Tony Quesada

The Jacksonville Port Authority has begun the process for taking about 90 acres by eminent domain.

The Jacksonville General Counsel's Office on Nov. 14 filed a petition for condemnation in circuit court on the former Jefferson Smurfit Paperboard plant property north of the authority's Talleyrand Marine Terminal.

The authority is pursuing a slow take, an exercise of eminent domain power in which a property's value is determined — possibly through a trial — before the governmental entity assumes title. The process allows the entity to walk away if the price is deemed unacceptable.

The property owners, Jax Maritime Partners LLC, have 20 days after being served to respond.

But Jax Maritime Partners, which is jointly managed by Jacksonville's The Haskell Co. and Evergreen Paper Co. in New Hampshire, isn't the only company involved.

Jacksonville Assistant General Counsel Bruce Page said the petition was also sent to Keystone Industries LLC, a coal company that announced in October plans to develop 61 of those acres into a bulk materials handling terminal. Keystone has signed a purchase agreement with Jax Maritime Partners.

"We have to serve everyone with an interest in the property," Page said.

Keystone President Tom Scholl said the company was aware of the port authority's interest in the property and had already retained eminent domain lawyers. He declined to comment further.

In May, the port authority's board authorized staff to initiate condemnation so it could assess environmental impact.

The port authority had hoped to buy the property to lease to Mercedes-Benz USA so it could consolidate its vehicle processing operations in the Southeast. But the automobile company has yet to decide where it wants to consolidate, and the port authority has since had to forfeit a low-interest state loan earmarked for the project.

Nevertheless, the port authority said it is still interested in the property and has received proposals from several potential tenants.

One sticking point, however, was that the owners asked the authority to indemnify them and the previous owners for any environmental problems that might be discovered.

Port officials said they can't do that legally and that they would need to investigate the site. The board authorized staff to initiate a slow taking in order to access the property to do so.

The authority is essentially out of waterfront land after Japanese ocean carrier Mitsui O.S.K. Lines Ltd. committed to building a 158-acre terminal on Dames Point. The authority says it needs such land to further its mission of creating economic development.

"It's very important for us to get the Smurfit property," said Roy Schleicher, port authority senior director of trade development and marketing.

But Keystone also said its project will stimulate the economy. The company plans to build one or two deep-water piers, conveyor systems and storage buildings to handle its coal and other companies' bulk cargoes. It estimates its project will involve a $20 million-plus initial investment and will create 60 jobs with an average annual wage of $45,000.

Jacksonville Business Journal: www.amcity.com/jacksonville