Sale in the works? Portsmouth fears they could lose $9M yearly in taxes if state buys Virginia International Gateway
PORTSMOUTH, Va. (WAVY) — Could the Commonwealth of Virginia purchase the Virginia International Gateway (VIG) and strip the City of Portsmouth of its largest waterfront property taxpayer? While nothing official has been announced, City Council appears ready to go on the offensive to try and prevent that type of sale from happening.
A resolution on City Council’s agenda for Tuesday, Jan. 23 directs city management to “vehemently oppose” the acquisition of VIG by the state-controlled Port of Virginia.
The resolution goes on to say that the privately-owned facility contributes approximately $9 million per year to the city, which is a sizable amount with 40% of the land in the city being non-taxable.
“The annual loss of Nine Million Dollars (and even more with future inflation) would cause long-term economic devastation for the city and its residents,” the resolution reads.
What remains unknown, is if the Port of Virginia has actually made an offer to purchase VIG and if VIG owners are actually willing to sell.
The Port of Virginia drives job creation throughout the state
Developed and opened in 2007 by the by Danish conglomerate A.P. Moller-Maersk Group, the $450 million container terminal was a highly automated, computerized revolutionary concept at the time for the container shipping industry. It was the first major U.S. container terminal to be built completely with private dollars, according to the WAVY archives.
It was built on nearly 300 acres along the Elizabeth River in Churchland.
However, in 2010, the Virginia Port Authority board approved a 20-year lease of Portsmouth’s container facility from APM worth $865 million, bringing all container terminals in the region under Port of Virginia control.
The Virginia Port Authority is the political subdivision of the Commonwealth of Virginia that owns the Port of Virginia. The Virginia Port Authority is governed by a board of 11 commissioners appointed by the Governor.
While the POV lease remains intact, in 2014 APM sold to Alinda Capital Partners and Universities Superannuation Scheme Ltd. for $450 million.
Alinda Capital Partners did not immediately return requests for comment and a spokesperson from the Port of Virginia was still working on a response by deadline.
However, the resolution submitted by the Portsmouth city attorney’s office, reads “the Port of Virginia is considering buying out the private owner and taking full ownership of VIG.”
Aubrey Layne, the chair of the authority’s board of commissioners, said he is surprised by it all.
“I have no idea why Portsmouth is voting on that resolution,” Layne, said. “I haven’t heard anything in board meetings about this so I can’t opine.”
Reached Monday evening, Mayor Shannon Glover said he was still awaiting further information himself.
What is guaranteed, is that losing the VIG real estate tax revenue would create a dent in the city’s already fiscally stressed budget.
Each cent on the city’s real estate tax rate is equal to $1 million.
This story will be updated.
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