CenterPoint Properties, the California Public Employees’ Retirement System-backed real estate company, has submitted an unsolicited proposal for a 60-year concession agreement with the Port of Virginia, in a deal valued at $8.9 billion.
The proposal has been submitted to Virginia’s Secretary of Transportation which must sign off on the deal before it moves on to the Virginia Port Authority and a formal bidding process begins.
Port of Virginia
CenterPoint’s proposed arrangement would provide Virginia with $8.9 billion over the life of the agreement, (around $3.5 billion in today’s dollars), the firm said in a statement.
The Chicago-based industrial real estate development and investment firm, which went public in 2003, said it planned to modernise the port and share profits. The firm also said it would employ Virginia International Terminals to run the port if its bid was successful. CenterPoint was acquired by CalEast Global Logistics, a wholly-owned subsidiary of CalPERS, in 2006.
At 60 years, the unprecedented concession agreement would be the longest ports concession ever granted in the US. The record is currently held by Ports America, owned by Highstar Capital, which this month won a 50-year concession and lease agreement with the Port of Oakland in California valued at $700 million.
Last summer, CalPERS unveiled a plan to increase its infrastructure allocation to 3 percent over the next two years. At the time, the allocation accounted for $8.2 billion of its assets.
CenterPoint declined to comment further on the proposal until it has submitted the bid to the Virginia Port Authority.