The cranes at the foot of Union Street may become history by next year.
The Red Hook Container Terminal (RHCT), which was built in the 1980s to handle bulk shipping, finishes its lease in 2018 and may be turned over by the Port Authority of New York and New Jersey (PA) to the hands of real estate developers.
“We’re at a crucial crossroads with the Port Authority,” said an official of the International Longshoreman’s Union (ILA), which has handled hiring and logistics on the Brooklyn waterfront for generations. “They allocated money in the form of subsidies over a five-year period, and now we are reaching the end of our agreement. We don’t know what will happen. But we have a meeting scheduled with the Port Authority soon, and we have a lot of support.”
The terminal plays a large role in Brooklyn’s economy, safety, and identity, according to the Waterfront Alliance. It processes more than 40,000 containers annually and provides 1,500 jobs.
A letter sent by a group of 14 elected officials including President Eric Adams and Representatives Nydia Velazquez and Jerrold Nadler makes the case that it also “serves as a hub for cross-harbor freight movement, diverting roughly 55,000 truck trips per year that contribute to congestion, pollution, and the overall impact on quality of life.”
Tremendous growth has happened just north of the terminal in the last five years, with massive residential and park development on Piers 1-6. When asked whether the lease for the container terminal will be renewed next year, Port Authority spokesman Steve Coleman said that they would defer to a Master Plan being worked out by Hatch, an engineering consultant group.
“The five-year operating agreement with Red Hook Container Terminal LLC–and the declining level of financial support agreed to by the private tenant as part of the terms of the original agreement–will expire on September 30, 2018,” wrote Coleman to the Star-Revue. “There have been no changes to the existing operating agreement between Red Hook Container Terminal LLC and the Port Authority. The ongoing Master Plan initiative is focused on all facilities in the Port of New York and New Jersey over the next 30 years, including the facilities located in Brooklyn.”
When pressed about what the Port Authority might do with the real estate following the termination of the lease, Mr. Coleman said they would defer to the results of the Master Plan.
Hatch announced the contract with the Port Authority in a December 20, 2016 press release on its website.
“This is a flagship project for Hatch and will be key for PANYNJ as it seeks to improve the everyday flow of freight and cargo through the region and strive to meet increasing volume demand,” Damon Jericho, Hatch’s project manager wrote in the release. “Over the next 18 months, we will work to identify opportunities to maximize land use, improve operational efficiency, and increase revenue for the Port Authority.”
According to the statement, Hatch’s point person for the project is Sian Llewellyn. Before working at Hatch, Llewellyn worked for six years at AECOM, a multinational engineering firm which earned $17.4 billion in revenue in 2016, and which last year rolled out a 120 page “framework” for developing Southwest Brooklyn’s waterfront. The framework would include new residential and park development in the space currently occupied by the container terminal.
But Mike Stamatis, president of the terminal is optimistic that the lease will be renewed.
“New York City and The Port Authority have historically been supportive of the facility,” said Stamatis at the 2017 Waterfront Conference in early May. “The value of having a working port will only continue to grow. The city seems to recognize that as evidenced by the freight tunnel being developed between New York and New Jersey, a project which frankly should have been started years ago. Failure to keep a working port would be a tremendous mistake for the local economy.”
On March 17, 2017, a letter was sent to Governor Cuomo requesting the renewal of the agreement and emphasizing the importance of maintaining the facility. It bore the signatures of Borough President Eric Adams, Representatives Jerrold Nadler, Nydia Velazquez, State Senators Martin Golden, Jesse Hamilton, Daniel Squadron, Velmanette Montgomery, Assembly Members Jo Anne Simon, Joseph R. Lentol, Deborah Rose, Felix Ortiz, and NYC Council Members Carlos Menchaca, and Ydanis Rodriguez.
“Congressman Nadler is our biggest advocate,” said the ILA official.
“We also have great support from James Rudin, Director of Operations for the state of New York, but Mr. Rudin needs to communicate the importance of this to the governor.
At the end of the day Governor Cuomo makes the call. But I’m confident that we’ll work everything out. We’re hoping to keep Red Hook, develop the 39th Street Pier in Sunset Park, and maybe eventually move further south in 10-20 years.”
Tom McMahon, public relations specialist for the ILA, added that the “facility is of vital importance to the area for many reasons: the environmental benefit of getting trucks off the road, the economic benefit of jobs, and the security of a viable functional port. For example, the facility provided crucial services in delivering goods when the roads were closed during Hurricane Sandy.”
McMahon cautioned that the PANYNY’s inaction on the lease renewal may doom the port regardless.
“Without the support from the Port Authority, currently evident in their lack of a decision regarding the facility’s status, it becomes a self-fulfilling prophecy and dooms the facility,” said McMahon. “The Port Authority says the facility is deteriorating, which is bound to happen without investment. The key sticking point from the Port Authority is that the service has been subsidized to the tune of $3 million per year, which we believe is small compared to places like Staten Island which raised over one billion dollars for the Bayonne Bridge.”
Regarding rumors of relocating the facility to Sunset Park, McMahon said, “some argue that moving it there is cheaper, but the problem is that there’s been no cost analysis. Some say it would cost $100 million just for dredging, and they don’t have the necessary infrastructure in place – for example cranes – nor the space that we currently have in Red Hook. Besides, the current shipping company needs to know a year in advance.”
Asked about other interest in the area, McMahon stated, “There are real estate pressures across the city. There is a faction within the Port Authority that is looking to sell off unused assets.
We have support, but there is still much work to do.”