January 27, 2009

Sittin' on the Port in the Bay

Justin Katz

As regular readers know, I'm not a supporter of specifically targeted economic development. For one thing, I lack confidence in our leaders' ability to define such far-reaching strategic plans. Moreover, as we see with on the casino issue, if businesses think a particular government activity or change will be profitable, they'll lobby for it, making noise about its value. When the government opts to act independently of private-sector enthusiasm, it does so with ulterior motives, plodding ahead with something other than economic development as its core motivation.

That is the sense that I get about the Quonset port debate. In the years that I've watched it rage out of the corner of my eye, I don't believe I've ever heard from a major shipper, or some other likely client, that the port would be a boon for them, and now it appears that area is seeing other kinds of businesses move in:

On a tour of the park last week, Steven J. King, managing director of the Quonset Development Corporation, could point to only a handful of lots in the former Navy base that haven't been leased or slated for redevelopment. Only about 200 acres in the 3,160-acre Quonset Business Park are still available.

Much of the development has taken place in the past several years. In 2003, there were 136 businesses in the park. Now, the site is home to 164 businesses that employ more than 8,800 people. The number of jobs has increased by a third over the past four years.

The positive to that expansion (which some may see as a negative) is that the government investment is minimal. Private funds (perhaps with some public assistance) goes toward the buildings, paving, and landscaping necessary, and that's that. By contrast:

... some legislators seem to believe those projects aren't enough and have started talking again about the container-port proposal that was championed by Lincoln C. Almond, Carcieri's predecessor in the governor's office. That plan would have required extensive dredging in Narragansett Bay and the filling of hundreds of acres there. Its price tag was estimated at $3 billion.

You can be assured that some powerful people are looking at that potential $3 billion expense as a payday, rather than an investment in longer-term revenue. Indeed, as far as I've read, there is no indication that the investment would be utilized. The Almond plan was a matter of debate before my time of local awareness, but there does not appear to be a corporate name behind the initiative, and the fact that some resource is "underutilized" does not mean that a specific improvement project is the answer.

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And the corruption that I've seen in places like Port Elizabeth in NJ is incredible.
Not that the combination of goods worth huge money, unions, and RI politicians could ever lead to corruption here.

Posted by: Andy at January 27, 2009 7:35 AM

" I don't believe I've ever heard from a major shipper, or some other likely client, that the port would be a boon for them"

That's correct, no company has come forward.

With sincere apologies to Ed Achorn, "If you build it, they will come" is a hazy economic theory that should not be carried out with taxpayer dollars.

Posted by: Monique at January 27, 2009 7:37 AM

Three points:
1. Think about it; without any government interference, more than 8800 jobs have been created or ended up at the old Quonset base. That’s pretty amazing, given the business climate in RI. I would venture to guess that should the container port idea come to fruition, then almost all those businesses there will be forced to relocate. How many will just pack up and leave the state completely?

2. Ports in the US are rife with corruption and graft; I used to go down to Port Elizabeth, NJ to pick up yachts that had been shipped in from overseas builders. With me would come a company rep with a sheaf of hundred-dollar bills in his pocket to spread around the longshoreman’s union workers in order to ensure the boat would be launched on schedule and not “lost” in the port. And those guys are pikers compared to the crooks we have in this state. Do we really want more opportunities for our political class to be bought off by union thugs? We have enough of that as it is.

3. Lastly, the marine industry is a huge employer in this state. It’s a clear case of trickle down economics for all those who doubt the theory; A rich guy buys a yacht. He employs mechanics, sailmakers, marina staff, canvas workers, boatyard workers, boat cleaners, crew, and so on, most at good wages, to take care of his yacht. Now, the coast guard won’t let yachts anywhere near ships as they transit the bay. In some cases, they close down entire sections of the bay while ships move through. It’s been my experience, from working in the marine industry, that rich guys don’t like being told to get off the water while some Iowa farm boy points a 50 caliber machine gun at his boat. The rich guy will soon decide that there are other places where he’d rather use and keep his boat. And poof! There goes another industry and all those lovely taxes out RI’s door.

Posted by: Andy at January 27, 2009 12:01 PM

Let's not forget the incident reported in the ProJo with the Longshoreman's union official at Quonset (initially accompanied by LIUNA official / General Assembly leadership Paul Moura) threatening the local businessperson.

Allegedly after the businessperson was got a Paulie-pat down looking for a wire.

Yeah, we need a bigger Longshoreman's union presence here like we need a new supply of cement overshoes.

Posted by: Ragin' Rhode Islander at January 27, 2009 2:42 PM

I believe that "if you build it, they will come". "It" is defined as bringing the transportation infrastructure up to normal standards. "It" is also defined as building an inviting business climate. On the latter, all of RI is abysmal. On the former, at Quonset the state has managed, under the noses of the voters and many politicos, to put in a decent connector to I95 and to modify rail overpasses so the biggest/tallest rail cars can come in. How did this positive development ever occur? ;) The airport is still a little dodgy, but I'd rather not see more than Air Guard, general aviation and air cargo in support of on-base industry. The good folk of War'k should be careful what they wish for in moving T F Green. Without Green, whats the difference between War'k and West War'k? There would be no there left there. The cost of the move would be staggering as well, but what's a billion or two?
As for container ports, given there are only 200 available acres - not all waterfront - is a full scale container port even possible now? You'd need to fill in a lot of the bay, wouldn't you? NORAD brought in 130000 cars last year. No extra dredging was required above maintenance type dredging. Are there no other cargoes that could be transhipped to/from QPD, given the current shipping channel restrictions?
Overall, I think we've done OK at QPD and need to work on that attractive(or at least not oppressive) business climate.

Posted by: chuckR at January 27, 2009 2:59 PM

You forget that the QDC has had $48 million in general obligation bonds to spend over the last 5 years on infrastructure. It's no coincidence that when you look around the state for private sector development, it has always followed State investment in infrastructure - Fidelity, Amgen, Capital Center...

Posted by: Bruce Danforth at January 27, 2009 3:19 PM

I agree with Ragin. We have enough corruption with the unions in RI. I remember the incident with the Longshoreman and former politican "Paulie Moura". For those who may have forgotten, I will send a copy of americanmafia.com that someone sent to me a couple of years ago regarding this incident to Monique and crew. They can post it online if they are able to refresh your memories.

Posted by: kathy at January 27, 2009 3:37 PM


I didn't forget the bonding. One of the things a state is for is to develop and maintain the necessary infrastructure for the benefit - personal and job/opportunity related - of its citizens. We can of course debate where the funding comes from. Should the roads be funded by gas taxes or out of the general fund or for some purpose by bonding? In my opinion there is no question that you must fund infrastructure including the highly un-sexy maintenance that might have extended the life of the Sakonnet River Bridge as one example.

Posted by: chuckR at January 27, 2009 4:16 PM
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