The Kinder Morgan Presentation
Kinder Morgan had their public presentation on Monday accompanied with the requisite PowerPoint deck to highlight main points. I’ve embedded a copy of that presentation below — it is a black and white copy, so some of the graphics are hard to read. I hope you’ll take a look at these slides (some of them you might need to print) and let us know what you think of this deal so far. But here are some of my thoughts on what is here:
1. This isn’t really a proposal — it is more of an Introduction to KM presentation. I wonder why so many seem so gung ho on this when the information is this thin.
2. As noted previously, the business they envision adding is bulk and break-bulk, which is already a key portion of their port business. And as noted, this business doesn’t add much in terms of new jobs.
3. This confirms the “investment” numbers. $200.5M over 50 years, with only $41.5 available (over 20 years) for capital improvements or repairs. This doesn’t match up at all with the $156 (+/-) that the Port ED said needed to be invested in the Port for long term competitiveness. Then compare the capital improvements and repairs to what the State has contributed via the Bond Bill:
- FY 2008 = $3M
- FY 2009 = $4M
- FY 2010 = $2M
- FY 2011 = $10M
- FY 2012 = $0M
4. This confirms that the buildout of new facilities into the Delaware is not on the table for this round. Which means that all of the effort to dangle this in front of the public as a major benefit was something of a con job.
5. Given that KM knows that the current Port tenants and outside of the gate businesses are very wary of this deal, they only addressed current relationships in two lines on a single slide.
6. A commitment to extending current employees and service relationships (ILA and Teamsters) for 3 years. In 3 years, Jack Markell and Alan Levin will be working on their next political acts and a whole lot of Democrats are going to be up for re-election to something here. I seriously hope that these unions are using this timing to their advantage.
So why all of the excitement for this? It certainly doesn’t look like a very good deal — Alan Levin assuredly would have laughed out of the room anyone who valued Happy Harry’s so poorly. And he would have put whoever made this offer on the Happy Harry’s Always Pay Full Price For Prescriptions list. Further, in 2009 DEDO wrote an article in an online development journal (Area Development Journal Online) touting the advantages of the Port of Wilmington. DEDO assessed the health of the port then as follows:
The port receives an average of 400 ships per year, which convey about four million tons of cargo. The businesses generate $31.5 million in annual gross revenue and about 19,000 direct and indirect jobs are sustained at the businesses. These jobs create $307 million in personal income, $409 million in business revenue and more than $29 million in state and local taxes. Since 1996, the state has invested more than $161 million for port development and expansion. In turn, the port has returned more than $250 million in tax revenue.
A return of $250M in tax revenue is pretty decent for a $161M development and expansion investment (and I don’t know if this includes the purchase price of the port, now that I read that). So what am I missing here? (Other than the fact that DEDO can give you this ROI data for the port, but apparently not for any of their other “investments” for business.)
Even though they don’t know what is in this deal, either, the Chamber has decided to weigh in on this issue on the anti-democratic side. Anything that disrupts the path of businesses to the taxpayer trough irks these guys, but if I was a port tenant or one of the businesses on the other side of the fence supporting these businesses, I’d be making sure that I got my Chamber dues back. Because the Delaware Chamber of Commerce certainly won’t be representing YOUR interests here. Senator Bobby Marshall looks like he is trying to represent everybody — making sure that at the end of the day, we still have a Port that is poised to not just retain the businesses and jobs already there, but also to continue expanding and capturing new business.
h/t to multiple anonymous tipsters who have been sending me documents related to this deal. If you have any other data useful for this, please feel free to contact me. More perspective on this deal is forthcoming.
Tags: Port of Wilmington
I’m not seeing the slides, but don’t feel like I need them given the excellent blogging.
Really excellent blogging. (I can see the slides) Thanks for this, Cassandra.
Jason, I wish I knew why you couldn’t see the slides — I’ve looked at this on three different browsers and I see the slides.
I wanted to post them so everyone could see what was on offer directly.
I see them now.
Until we know what the actual costs and revenues at the port are, we can’t be absolutely certain how bad a deal this is. But what’s on offer truly is abysmal. The true infrastructure improvements come to about $17.5 million, a sum the state certainly could afford.
The real problem here is that, as usual, the state has formed a “quasi-public” body to run the port, meaning lawmakers get to evade responsibility for how it’s being run (for other examples of this crummy way of running things see the Delaware Solid Waste Authority and the Riverfront Development Corporation).
The books need to be opened up. Period.
There are Financial Statements that can get to some of that:
FY 2012
FY 2011
FY 2010
FY 2009
Those are what is currently available at the Auditor’s website.
TO Geezer: Maybe add DART aka the Delaware Transit Corporation to that list.
Was it not Happy Harry’s under Alan Levin’s watch that got real tough with DHSS over medicaide perscription payments and at one point no longer accepted medicaid persriptions.
You would thing Mr. Levin would work as hard for the taxpayers to get the best deal possible
Thanks for the links, Cassandra.
Andy: No, Walgreen’s had taken over by then. Alan may have still had some association, but it was only through the Happy Harry’s name. He had no authority whatsoever at that point.
Andy- Don’t forget the joke that is the DRBA.
My Mistake El-Som
Some would include the SEU also
Thanks for posting Cassandra. The links and assessment are great.
I was also taken with how little the State Chamber’s Op-Ed scold did for those smaller businesses ‘outside the gate’ who no doubt pay their membership dues.
Those businesses ain’t feeling it.
And the effort by those folks to ramp up the numbers this week and distribute them to the public should result in a fairly interesting Wednesday morning down in Dover when the Bond Bill Committee contemplates the Port of Wilmington @10AM, February 27th.
There’s a Daily Kos diary today on the GA state chamber of commerce and an anti-private sector union bill a la ALEC:
http://www.dailykos.com/story/2013/02/15/1187388/-Georgia-ALEC-Chamber-Puppets-Try-to-Wipe-Out-Labor-AGAIN
The Gov and Happy Harry are doing out citizens a diservice. We need an independent audit of the Port for the last 5 years and an environmental impact study before our people,state Reps and Senators can make an informed judgement. Until then Happy Harry should be cainned for what he is trying to do to us all. This man is not very bright.
Sandfly you are mistaken the man is very bright. This has nothing to do with his smarts but his and the Governor’s agenda which has not been pro worker
Andy, this has nothing to do with you. Happy Harry had his dad’s business passed down to him. He sold it for a very good buck. What is his claim to fame being connected? He couldn’t even run for Governor because he didn’t have the stones. This man is the classic taker/faker. He won’t amount to much and when the true facts come out about this horrific attempted shafting of the taxpayers, everyone from Delaware will never see Happy Harry in any form of government again. Just because you have inherited money doesn’t mean you have brains to go along with it. Enough said on this monied moron. Don’t defend the undifensable.
Hey, asshole, it has nothing to do with you, either, but it hasn’t stopped you from trashing the guy. Check on the size of the business when Alan took it over and then the size when he sold it.
PS: A sorry shitsack who spells the word “undifensable” has no room to insult anyone about anything.
You guys are too intense and personal for me. Why not stick to the issues and the facts. The facts are that the Port of Wilmington is too big of an economic engine in the state ($337 million in business revenue and thousands of jobs) to be turned over to one, for profit, company. Their interests are in profits. They will have a monopoly on one of the largest economic assets in the state. Cassandra hit the nail on the head when she said that the Port has been one of the few bright spots for Markell and DEDO. Contrary to what Mr. Levin would like you to believe, based on DEDO’s own figures, it is a no brained for the state to put money into the port.
I agree, but you’d better come up with a better argument than “Alan Levin is a doodyhead.”