Broward County Commission Regular Meeting
Director's Name: Joseph Morris
Department: Port Everglades Division: Business Development
Information
Requested Action
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A. MOTION TO WAIVE competitive selection requirements set forth in Section 32.4(h) of the Broward County Administrative Code in accordance with Section 32.10 of the Broward County Administrative Code to enter into a Marine Terminal Lease and Operating Agreement with A.G. Royce Metal Marketing, LLC d/b/a Concrete Reinforcing Products for approximately 3.94 acres (171,468 square feet) of land in the Southport area at Port Everglades, for a one-year term commencing on October 1, 2024, and ending on September 30, 2025, finding that there is good cause for such waiver.
ACTION: (T-10:30 AM) Approved.
VOTE: 8-0. Commissioner Ryan was not present.
B. MOTION TO APPROVE Marine Terminal Lease and Operating Agreement between Broward County and A.G. Royce Metal Marketing, LLC d/b/a Concrete Reinforcing Products for approximately 3.94 acres (171,468 square feet) of land in the Southport area at Port Everglades, for a one-year term commencing on October 1, 2024, and ending on September 30, 2025; and authorize the Mayor and Clerk to execute same.
ACTION: (T-10:30 AM) Approved.
VOTE: 8-0. Commissioner Ryan was not present.
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Why Action is Necessary
A. Board approval is required to waive the competitive selection requirements set forth in Section 32.4(h) of the Broward County Administrative Code in accordance with Section 32.10 of the Broward County Administrative Code.
B. Marine Terminal Lease and Operating Agreements require approval by the Broward County Board of County Commissioners pursuant to Section 32.4(h) of the Broward County Administrative Code.
What Action Accomplishes
A. Waives the competitive selection requirements set forth in Section 32.4(h) of the Broward County Administrative Code.
B. Approves a Marine Terminal Lease and Operating Agreement between Broward County and A.G. Royce Metal Marketing, LLC d/b/a Concrete Reinforcing Products.
Goal Related Icon(s)
☒County Commission
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Previous Action Taken
None.
Summary Explanation/Background
THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners’ (“Board”) Value of “Building partnerships and working collaboratively with others to meet shared objectives,” and the Goal of “Ensuring economic opportunities and a sustainable economy, with an emphasis on Broward’s lower and middle class.”
A.G. Royce Metal Marketing, LLC d/b/a Concrete Reinforcing Products (“CRP”) is headquartered in Sunrise, Florida, and is a national distributor of steel reinforcing bars used for construction projects. Port Everglades has been its primary port of importation for over 20 years.
On September 19, 2023 (Item No. 12), the Board approved the waiver of the competitive selection requirements set forth in Section 32.4(h) of the Broward County Administrative Code (“Code”), finding that there was good cause for such a waiver, and a Marine Terminal Lease and Operating Agreement with CRP for approximately 3.94 acres (171,468 square feet) of land in the Southport area at Port Everglades, for a one-year term commencing on October 1, 2023, and ending on September 30, 2024 (“2023 Agreement”).
Section 32.4(h) of the Code requires a competitive selection process for Marine Terminal Lease and Operating Agreements; however, Section 32.10 authorizes the Board to waive the requirements for good cause. CRP is a long-term port user, tenant, and beneficial cargo owner at Port Everglades. In addition, CRP has met its minimum guarantees every year since becoming a tenant in 2018. Therefore, Port staff recommends approval of a waiver of the competitive selection process.
CRP has requested to enter into a new Marine Terminal Lease and Operating Agreement with Broward County for a one-year term (“New Agreement”). Representatives from CRP, the Port Everglades Department, and the Office of the County Attorney held sunshined negotiations for the New Agreement on August 13, 2024. The primary business terms of the New Agreement are as follows:
• The lease is for a one-year term from October 1, 2024, through September 30, 2025.
• The approximately 3.94 acres (171,468 square feet) leased premises in the Southport area of the Port will remain the same as the 2023 Agreement (see Exhibit 2).
• The land rental rate will increase from $1.30 per square foot to $1.40 per square foot, an increase of 3.7% from the 2023 Agreement, resulting in an annual land rent increase from $231,482 to $240,278 ($20,023 per month).
• The applicable cargo wharfage rate will increase from $3.20 per short ton to $3.58 per short ton. The 12% increase in the wharfage rate corresponds to benefits associated with the completion of the Southport Turning Notch Extension project (SPTNE). The additional berth capacity from the SPTNE allows CRP to berth its ships closer to its cargo yard, reducing CRP’s transportation cost. Prior to the SPTNE being completed, the parties had negotiated a wharfage rate that accounted for a longer-than-usual distance between the assigned berth and the cargo yard.
• The negotiated minimum guaranteed payment (“MGP”) for wharfage for imported break-bulk steel will be $268,500. This is based on a decrease in the guaranteed cargo throughput from 85,000 short tons in the 2023 Agreement to 75,000 short tons in the New Agreement, as high-interest rates and other market factors have depressed new construction and are hampering CRP’s only line of business - importing of steel reinforcing bars.
• The Port Director may require CRP to relocate to another location within the Port at no cost to the Port with a minimum of 180 days’ written notice if the land covered by the New Agreement is needed for another purpose.
From October 2022 through September 2023, CRP imported and distributed over 96,000 short tons of steel reinforcing bars through Port Everglades. During the 2023 Agreement term from October 2023 through July 2024, CRP has already imported and distributed over 63,000 short tons of steel reinforcing bars through the Port. Based on CRP’s positive history at Port Everglades, Port staff recommends approval of the New Agreement.
The New Agreement has been reviewed and approved as to form by the Office of the County Attorney.
Source of Additional Information
Jorge A. Hernández, Director, Business Development Division, Port Everglades Department, (954) 468-3501
Stacie Warren, Assistant Property Manager, Business Development Division, Port Everglades Department, (954) 468-3706
Fiscal Impact
Fiscal Impact/Cost Summary
The Port Everglades Department will realize guaranteed revenue of $508,777 during the term of the New Agreement. Additional revenue will be generated from marine charges associated with the cargo delivery to the Port, as well as additional cargo wharfage if CRP exceeds its MGP projections.