OTPP threatens to pull out of New York terminal deal
Ontario Teachers' Pension Plan (OTPP) is threatening to pull the plug on its purchase of a Staten Island container terminal from Orient Overseas (International) Ltd, if the Port Authority refuses to withdraw its demands for what is effectively a “lease transfer” fee.
OTPP and OOIL have sent a joint letter to the Port Authority of New York & New Jersey (PANYNJ) confirming OTPP’s commitment to long-term investment, economic development and job growth in the Port of New York & New Jersey.
PANYNJ is demanding $45.7 million from OOIL before it transfers the lease on a Staten Island container terminal to the Toronto-based pension fund. Port officials claim the money is required to cover dock improvements and future upgrades. OOIL is disputing the size of the fee.
Already the OTPP is threatening to abandon its takeover of the New York Port, one of four container terminals involved in the $2,4 billion buyout of OOIL’s North American port assets.
OOIL completed the sale of its Vancouver and New Jersey Terminals to OTPP in January. OOIL attempted to salvage the transaction by promising to pay a $5 million fee and up to $17 million for future improvements - an offer that was rejected by the port officials.
OTPP’s proposal includes investment of up to $57 million in additional capital expenditures at the New York Container Terminal and the Global Container Terminal in Bayonne, New Jersey, at least $17 million of which would be invested in the New York Container Terminal.
In addition, PANYNJ would receive $5 million for future use in connection with the terminal.
The PANYNJ’s demand for a hefty fee to approve the lease transfer should come as no surprise, since the Port Authority made similar demands earlier this year in respect of the DP World-AIG transaction. However, PANYNJ later withdrew its demand for the fee and accepted an investment commitment from AIG.
OTPP and OOIL have sent a joint letter to the Port Authority of New York & New Jersey (PANYNJ) confirming OTPP’s commitment to long-term investment, economic development and job growth in the Port of New York & New Jersey.
PANYNJ is demanding $45.7 million from OOIL before it transfers the lease on a Staten Island container terminal to the Toronto-based pension fund. Port officials claim the money is required to cover dock improvements and future upgrades. OOIL is disputing the size of the fee.
Already the OTPP is threatening to abandon its takeover of the New York Port, one of four container terminals involved in the $2,4 billion buyout of OOIL’s North American port assets.
OOIL completed the sale of its Vancouver and New Jersey Terminals to OTPP in January. OOIL attempted to salvage the transaction by promising to pay a $5 million fee and up to $17 million for future improvements - an offer that was rejected by the port officials.
OTPP’s proposal includes investment of up to $57 million in additional capital expenditures at the New York Container Terminal and the Global Container Terminal in Bayonne, New Jersey, at least $17 million of which would be invested in the New York Container Terminal.
In addition, PANYNJ would receive $5 million for future use in connection with the terminal.
The PANYNJ’s demand for a hefty fee to approve the lease transfer should come as no surprise, since the Port Authority made similar demands earlier this year in respect of the DP World-AIG transaction. However, PANYNJ later withdrew its demand for the fee and accepted an investment commitment from AIG.