Port of South Louisiana Delays $445 Million Purchase of Former Avondale Shipyard
The Port of South Louisiana has delayed the closing of its $445 million deal to buy the former Avondale Shipyard site, which was once Louisiana's largest employer. The port has hired three consulting firms to study the price and viability of the purchase, with the vetting period extended due to the ongoing assessments. The deal was originally announced by the port's leadership in January, with plans to ask the state Bond Commission in March for approval to borrow money to finance the purchase.
The due diligence period to vet the deal was later extended twice, with the current vetting period being open-ended as the port's leaders await the consultants' reports. Port CEO Paul Matthews has said that "the assessments being conducted by a team of experts are an important part of the process and will not be rushed", adding that there is no timeline for delivery of the reports.
The proposed sale price of $445 million was the lower of two appraisals that the port and site owner T. Parker Host Inc. commissioned from real estate evaluation firms. Host bought Avondale in 2018 for $60 million and subsequently invested $90 million to remediate the site's environmental problems and convert some of its docks for use as a bulk shipment port. However, the proposed sale price was met with skepticism from some industry executives and port officials who said it was speculative and based on the theoretical potential of Avondale down the road if it were fully remediated, functional and able to attract permanent tenants.
Questions have been raised about the viability of the purchase, with Martin & Associates hired to determine whether the appraisal price made sense and Avondale could earn enough to pay off the proposed bonds. The port officials have also engaged WSP and ELOS Environmental to assess remediation requirements. The Bond Commission will also require the port to produce an engineering survey to assess the cost of upgrading or tearing down some of the dozens of buildings on the vast site, as well as bringing into use additional docks in order to realize the site's potential.
After the required reports are submitted, the 14 politicians who make up the Bond Commission will vote on whether to approve financing. They include Governor John Bel Edwards, State Treasurer John Schroder, and Attorney General Jeff Landry. Matthews has said that the port plans to vet the deal thoroughly and could pull out if it proves unviable, although he expects it to move forward. "We are committed to seeing this through and look forward to owning Louisiana’s greatest industrial icon so that we can attract jobs and investment to southeast Louisiana," Matthews said.