Heartland Port Bill sent to Governor

May 15, 2020: News Tribune (full link below)

The Missouri House of Representatives voted 145-3 on Thursday to transfer 116 acres of state-owned land just east of the Ike Skelton Training Facility to the Heartland Port Authority for a Missouri River port in Jefferson City, sending the bill to Gov. Mike Parson for his signature.

State Rep. Rudy Veit, R-Wardsville, and state Sen. Mike Bernskoetter, R-Jefferson City, sponsored the legislation.

"The port is important for industrial growth. We have to look at, 'What are we doing for the next generation?'" Veit said. "It is important for development of Jefferson City. It is important to use rivers as highways. The river is a commercial highway going up and down (the Midwest)."

The bill also would eliminate a railroad crossing at the Jefferson City Correctional Center.

"That would be eliminated with a bridge," Veit said. "There was a land transfer there for an easement in the port bill. On-grade crossings are challenging. If you put a port in there, you have more vehicles. It's something they've wanted to do for a long time."

Last year, the Jefferson City land transfer was tied in with other land transfer requests from across the state. While there was no opposition voiced to Jefferson City's request, the land transfer bill did not make it to the full Senate and House for consideration, as state budget debates lasted into the final days of the legislative session.

"I think the General Assembly recognized this is an effort to bring commerce to the state," Heartland Port Authority Board Chair Rick Mihalevich said. "They understood putting the state land into economic development was a positive thing to do. They saw how Jefferson City, Cole County and Callaway County leveraged their cooperation to regionalize the economy. I think it hit home with them on several levels. We had so much support among lawmakers, and we had the corn growers and soybean associations all testify in favor of the port."

Last week, the Port Authority Board received a long-awaited report on products that could be enhanced by operation of the planned port.

The Missouri Port Market Study and Business Development Plan, assembled by Iowa-based Decision Innovation Solutions, was paid for with a $183,700 grant from the Missouri Agricultural and Small Business Development Authority, Mihalevich said.

DIS officials said they found a 24-county area could use the port in Central Missouri, stretching as far north as Audrain County and as far south as Laclede County.

One of the biggest assets they said the Heartland Port would have is good access to roads such as I-70 and I-44 thanks to U.S. 50, 54 and 63. Trucks would have easy access to bring freight to be shipped out on barges that could follow corridors that would lead to markets in Mexico and Asia.

The DIS analysis shows the flow of truck and rail traffic in Central Missouri is "showing signs of congestion leading to poor freight flows. Barge traffic would be very economical and environmentally friendly for goods to be transported through this area."

DIS talked to a "number of potential users in the 24-county area, and 42 percent of those users responded favorably, saying port access was something they felt they could potentially take advantage of."

The forestry industry could take advantage of the port to export products, as well as agricultural items such as soybeans and wheat, according to the report.

The DIS study indicated Boone, Moniteau, Cole, Callaway, Osage, Miller and Maries counties were the primary draw area for agriculture products that could come into the port. They estimated 2.1 million bushels of soybean exports could be moved through, and soybeans have the highest potential for profitability among agricultural products that would come through the port.

As for a potential business model, DIS suggested a landlord port model concept.

This would have the Heartland Port Authority executing a concession agreement with an entity that pays a fee to operate the port. The report indicated this entity likely would be a marine river terminal operator or a grain trader.

Under a shared investment concept, the Heartland Port Authority could install major infrastructure at the site to help the port be more viable and attract potential investors. Under the same concept, DIS officials said, the concessionaire could be required to invest in specialized infrastructure, equipment and operational expenditures.

"We find ourselves on federal riverway, which is good because that could lead to federal funding for us," Mihalevich said. "We know other grants and funding sources will be needed to leverage private dollars to build something. This won't work without a combination of public dollars with private investment."

He said he sees positives and negatives in the report the board will have to consider as the project moves forward.

"The study showed we can't be all things to all people, though," Mihalevich said. "Certain products don't go over 500 miles. We ship a lot of corn internally, but we could still do value-added products with corn for foreign distribution. The further distance we go, the more the port becomes viable for shipping products."

The study indicated the port could be able to move products via containers, Mihalevich added.

American Patriot Holdings, based in Miami, has talked with state and local leaders about using a Jefferson City port to ferry goods in containers on the Mississippi and Missouri rivers to ports in Kansas City and Louisiana.

"Containerization is the future, but many of the older ports have had to retool to adapt," Mihalevich said. "If we get the right investments, we could do containerization. We would have the land and could be ahead of the curve with the space for the modern equipment needed to do that."

Mihalevich said the Heartland Port Authority Board is at the point of needing an executive director.

"We need to have someone working full time, but the problem is we don't have any money available to hire that person right now," Mihalevich said.