Million-square-foot Flagler logistics hub key piece of Miami's international trade puzzle
By Zachary S. Fagenson
Work is underway to bore a billion-dollar Port of Miami tunnel and Gov. Rick Scott answered many prayers last week when he agreed that the state would foot the remaining $77 million to dredge the Port of Miami to a 50-foot-depth, but precious few details are available about Flagler's million-square-foot-plus logistics hub that could be the final piece of a massive trade puzzle.
"The strategic location of Flagler Logistics Hub and the unparalleled access it will have to the airport, seaport and vital railways has elicited a great interest from a number of businesses across all sectors," Flagler Executive Vice President Eric Swanson said in an e-mailed statement.
"The proximity of several modes of transportation makes it a very important part of the economic growth in South Florida," he wrote, and "because it is so important, Flagler is moving forward with great care and diligence to make sure that we encourage the kind of development that is best for both Flagler and the community."
Several Flagler executives declined to comment for this article.
The Flagler Logistics Hub, 300 acres near Miami International Airport with Florida East Coast (FEC) Railway tracks running through it, would develop first as the 60-acre Flagler Logistics Park. Once fully developed, the larger hub could have more than 2 million square feet to manage and distributed the millions of added tons of cargo expected to pass through a revamped Port of Miami.
Real estate experts harped on the importance of such a facility at a recent Realtors Commercial Alliance of Miami conference.
"For every successful port system, there is an inland component," John Carver, Los Angeles-based executive vice president of Jones Lang LaSalle's port, airport and global infrastructure desk, told an audience of about 200. "It's not just dredging and port capacity..."
Such is already the trend in China, where inland ports handle the massive amount of goods that country manufactures and exports.
"An inland port must be associated with the seaport because the port can only handle so much at a time on the water," Steve Medwin, managing director at Jones Lang LaSalle in Miami, told Miami Today at the conference.
If more cargo comes through the port, he said, "you need to get it to a place where you can then break it down and send the goods in many different directions..."
Flagler's logistics hub, slated to rise on the Hialeah Rail Yard, seems the perfect place.
It already has FEC rail running through it and the Port of Miami hopes to soon start work on an out-of-use track that connects the port to the yard. About $28 million from the federal government, port officials hope, will be paired with some private funding to push the about $47 million project forward.
"We're hoping to finalize all the necessary grant documents for execution," said port Director Bill Johnson.
The FEC has agreed to fund 20% of the project cost up to $10 million.
The project "allows the Port of Miami to be in an incredible position, to be intermodal," he said. It's a "strategic advantage for the Port of Miami to be able to move hundreds of thousands of containers efficiently and timely."
Though the reopened rail line would run cargo straight into the heart of Flagler's planned project, Mr. Johnson said he has yet to speak with anyone from the company.
"Our door is open. We've met with other developers around the state," Mr. Johnson continued.
At the same time, FEC and Flagler seem to face few challenges working together to get the hub rolling.
"We treat that as any other development that has rail service. We will serve it if there are businesses that move freight," said Husein Cumber, FEC executive vice president for corporate development. "We'll work with them to identify potential tenants, but the rail to the Port of Miami is being built to serve the post-Panamax ships and continue to convert truck traffic to rail traffic."
Yet the two are more closely related.
Flagler and FEC were once part of the same company — Florida East Coast Industries —that in mid 2007 "merged with certain private equity funds managed by affiliates of Fortress Investment Group LLC," according to an FEC press release.
The Fortress website lists both Flagler and Rail America, the parent company of FEC, as assets in its private equity portfolio.
However the partnership among the port, FEC and Flagler works out, most will argue that Greater Miami will benefit most.
Mr. Johnson of the port has said the dredging would create 33,000 jobs in the region. The big target is to have all of the projects — the port dredging, the tunnel, the rail line and possibly the logistics hub — up and running in time for the revamped Panama Canal's 2014 completion.
If all the parts fall into place, Miami and South Florida could rise to greater prominence in the international shipping world.
The Port of Miami, in Jones Lang LaSalle's 2010 global infrastructure outlook report, was in the bottom half of a list of major US ports by volume. In 2009, 807,069 twenty-foot-equivalent units — an industry unit of measurements — passed through the ports. That's far less than the 2.3 million that pass through Savannah and the 1.1 million through Charleston but still bested Jacksonville's 754,352.
Miami, however, is the only port south of Norfolk, VA, with congressional authorization to dredge to 50 feet and as such could be poised to truly become a major player.
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