Port OKs Tropical Shipping project
Cargo storage to expand after building demolished in $4M plan; talks could bring a second cruise ship.
RIVIERA BEACH — The Por t of Palm Beach and Tropical Shipping have taken the next step toward a $4 million project that, if all goes well, will result in the demolishing of an office building to provide Tropical with an additional 3 acres for an expanded refrigerated cargo storage area.
The port commission unanimously approved the project Thursday as part of a 10-year comprehensive agreement with Tropical with four five-year renewal options. The contract has been under negotiation for months.
Tropical Shipping, founded in 1963, is the port’s largest tenant and makes up about a third of its revenues. Tropical’s main business is shipping food, especially perishable, refrigerated and frozen foods, groceries and consumer goods in containers from Canada and South Florida to The Bahamas and the Caribbean.
Tropical officials said the 3 acres will increase the refrigerated cargo container space from 154 containers to 275 containers if they are double-stacked and to 340 if triple-stacked. Refrigerated containers are plugged in and stored in open, paved areas before and after shipping.
Port officials said Tropical continues to make extensive commitments in the Caribbean and to the port. The company recently ordered five new cargo ships that will arrive and be based at the port starting in 2018.
Doug Vogt, Tropical’s assistant vice president of terminal operations and equipment, said the additional cargo laydown area will provide future growth and revenue at the port.
The agreement starts the clock on the project, Jarra Kaczwara, the port’s senior director of business development and communications, told commissioners.
Plans call for the port’s fourstory Maritime Office Building to be demolished to make room for the increased cargo storage.
The agreement also commits the port and Tropical to negotiations to provide for the berthing of a cruise vessel every day rather than every other day. This will allow the port to have not one, but two cruise ships based at the port. The port is the home base of the Grand Celebration, which cruises to The Bahamas.
Tropical was using the Maritime Office Building for office space, but last year moved to a new 30,000-square-foot building it had built at 501 Ave. P in Rivera Beach.
I t a l r e a d y h a d mo r e t h a n 100,000 square feet of office and warehouse space in that area.
Under a proposed timetable, by June 30, 2018, the port will need to have permits submitted to the city and need to receive permits back by Dec. 31, 2018. The goal is to complete the project by Sept. 30, 2020.
Port Deputy Director and Chief Financial Officer Paul Zielinski said the port has applied for a grant from the Florida Department of Transportation and expects to receive $2 million sometime this year.
Over the course of the agreement, the port will realize approximately $10 million in additional net income. Cash flow for the term of the contract will be more than $12 million.
If the demolition and construction bids come in at more than $4.8 million, Tropical may elect not to proceed. If bids are more than $5.3 million, either party may elect not to proceed.