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Pasha plans changes at National City terminal

The Board of Port Commissioners on Tuesday is scheduled to consider a planned multimillion-dollar realignment and expansion of the Pasha Automotive Services leasehold at the National City Marine Terminal.

With an estimated 336,000 automobiles handled last year, Pasha’s operations were reportedly involved in the transport of more cars than any other port on the West Coast.

Port Hueneme was second with 280,000 auto transports, followed by Long Beach with 240,000, according to a port staff report. Pasha is projected to process 441,000 automobiles in 2013 and 452,000 in 2014.

The terminal reportedly serves as the primary port of entry for one out of every eight cars imported to the United States, including Audi, Bentley, Honda, Isuzu, Mazda, Lotus, Mitsubishi, Porsche, Volkswagen, Hyundai and Kia. The terminal also handles lumber and other large project cargo.

The focus of development at NCMT is on realigning the existing lumber and auto terminals to consolidate operations on more contiguous leased areas to improve operating efficiencies, lower costs, and enable additional traffic for the tenants.

The cost of these improvements has yet to be determined.

The NCMT currently offers 5,375 linear feet of 35 foot draft berthing, 157 acres of available land -- including more than 8 acres of covered buildings -- with ready access to major highways and rail connections.

The terminal also includes post-production facilities where factory-trained mechanics accessorize the vehicles to produce a dealer-ready automobile.

While Pasha officials could not be reached for comment, they look to add to capacity with an additional ship, expand the leasehold and provide new railroad track to provide better access to inland destinations.

The Marjorie C., with a capacity of 2,750 cars, is expected to be ready for use in the fall.

The currently operating vessel, the MV Jean Anne, has the capacity for more than 3,000 automobiles. The Marjorie C. is projected to cost $160 million to complete.

Not everyone is thrilled about an expanded terminal operation. Officials with GB Capital Holdings LLC, of San Diego, are concerned that expanded rail next to its 250-slip Pier 32 Marina will impact its business.

“Similarly, representatives from Best Western Marina Gateway have noise concerns with the use of the BNSF rail yard located immediately adjacent to the hotel,” a port staff report added.

This controversial part of proposal would add 30 to 45 railcar spots, depending on the extent of the yard rehabilitation.

Among other changes, six different tracks are expected to be added to the leasehold.

Pasha is proposing to rebuild some of these within the under-used BNSF-owned switching yard off Bay Marina Drive, and to build a new track connecting the south end of the existing track to that BNSF yard.

The cost of this new rail infrastructure will cost about $3 million, Pasha estimated.

The port staff report, while acknowledging the concerns, argued in support of the increased track.

“About 90 percent of PAS’ current volumes through NCMT are imported vehicles, 45 percent of which move inland by BNSF train service," the staff report stated. "This means that NCMT needs to receive regular supplies of empty multi-level railcars to evacuate import vehicles from the terminal to their inland destinations"

In the meantime, growing pains continue.

“The future demand for NCMT’s acreage for vehicle-handling operations is underpinned not only by this limited supply of land but also by expected growth in U.S. imports of automobiles/trucks,” the report added.

Based on the expected volumes and average vehicle dwell times in 2013 of the auto manufacturers currently using NCMT, port staff says PAS will quickly need 117 acres of open storage area to effectively handle these customers. This need is projected to grow to nearly 140 acres by 2020.

The auto transporter may need even more acreage if it is successful in luring an automotive contract from what was defined as another California terminal.

In that case, Pasha would need another 38 acres of open storage area.

The constraints are tight at present. The port staff report said of the 163 acres of total land available to PAS, 115 acres of those are available for vehicle storage.

“It is therefore apparent that over time, PAS will be to effectively utilize as much additional acreage as the port is able to provide for the vehicle-handling business,” the port concluded.

Additionally, Pasha has requested first right of refusal for use of the land areas (approximately 16 acres) it controls north of Bay Marina Drive.

In fiscal year 2012, Pasha’s business yielded approximately $6.5 million in rent to the port, net of Pasha’s 24.5 percent retention.

Pasha estimated its proposal will allow for the potential to capture new business, and assist in committing future business to the NCMT from the Marjorie C and through container shipments on the Jean Anne.

The proposal should increase the current $6.5 million yearly rent to the port by approximately $2.3 million from the Marjorie C., and $1.1 million from the Jean Anne -- resulting in a total rent of approximately $10 million annually.

Pasha is the majority partner in Pasha Hawaii Transport Lines, which operates a roll-on/roll-off shipping service between San Diego and the Hawaiian ports of Honolulu, Hilo, Kahului and Nawiliwili.

Port staff envisions recommending an amendment to the terminal operator agreement in late spring or early summer.

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