Broward County Commission Regular Meeting
Director's Name: Joseph Morris
Department: Port Everglades Division: Business Development
Information
Requested Action
title
(This is the second of two required public hearings. The first public hearing was held on April 22, 2025.)
MOTION TO APPROVE Marine Terminal Lease and Operating Agreement between Broward County and Everglades Company Terminal, Inc., for a 39.18-acre marine terminal in the Southport area of Port Everglades; and authorize the Mayor and Clerk to execute same.
body
Why Action is Necessary
Pursuant to Section 32.5.b. of the Broward County Administrative Code, two Public Hearings are required for marine terminal leases exceeding five years within the Restricted Use Zone.
What Action Accomplishes
Approval of the Marine Terminal Lease and Operating Agreement between Broward County and Everglades Company Terminal, Inc. (“ECT”). This is the second of two required public hearings. The first public hearing was held on April 22, 2025.
Goal Related Icon(s)
☒County Commission
☐Go Green
☐MAP Broward
Previous Action Taken
The first public hearing was held on April 22, 2025 (Item No. 40).
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.”
Mediterranean Shipping Company, S.A. (“MSC”), has operated a 39.18-acre marine terminal since 2004 in the Southport area of Port Everglades (see map - Exhibit 2) under a Marine Terminal Lease and Operating Agreement approved by the Board on June 22, 2004 (Item No.14-PH), with subsequent amendments approved by the Board on December 11, 2007 (Item No. 9-PH), February 9, 2010 (Item No. 1-PH), January 10, 2012 (Item No. 5-PH), and August 12, 2014 (Item No. 4-PH) (as amended, the “Prior Lease Agreement”). The Prior Lease Agreement expired on October 31, 2024, but MSC remained on the premises with County’s consent while negotiations on a new agreement continued.
In 2022, with the upcoming expiration of the Prior Lease Agreement, Terminal Investment Limited Sarl (“TIL”) requested a new marine terminal lease and operating agreement on behalf of MSC. TIL is a majority-owned subsidiary of MSC and is the sole owner of Container Marine Terminal, LLC (“CMT”). CMT is the sole owner of Everglades Company Terminal, Inc. (“ECT”).
On March 14, 2023 (Item No. 9), the Board waived its competitive selection requirements, finding good cause for the Port Director to negotiate a new Marine Terminal Lease and Operating Agreement with MSC for the same 39.18-acre premises. During preliminary fact-finding discussions held in anticipation of negotiations for the new agreement, MSC indicated its desire for ECT to hold the new agreement with the County.
Five sunshined negotiations meetings were held with ECT on June 17, 2024, June 25, 2024, August 5, 2024, and November 4, 2024, to discuss the new agreement. The meetings included representatives for ECT, Port Everglades staff, and the Office of the County Attorney. The negotiations were closed to the public, as proposals or counterproposals related to the lease of land or port facilities are confidential and exempt from release until specified time periods as provided for in Section 315.18, Florida Statutes. The primary business terms of the proposed agreement (the “Agreement”) are as follows:
• Term: An initial term beginning upon full execution of the Agreement by both parties and ending on December 31, 2034, with up to two optional five-year extension terms contingent upon the parties agreeing to specific economic terms that would apply to each extension term. The County must consent to any extension.
• Land Rent in Lease Year 1: $1.39 per square foot (the Prior Lease Agreement’s Land Rent was $1.26 per square foot in the final year.)
• Container (shipmove) Rate in Lease Year 1: $55.00 per shipmove (the Prior Lease Agreement’s container (shipmove) rate was $59.55 per shipmove in the final year.)
• Annual Increases: Land rent and container (shipmove) rates increase 3% on January 1st of each lease year.
• Minimum Annual Guarantees (MAG): 85,000 shipmoves in Lease Year 1 (prorated based on the date of execution), increasing by 2,500 shipmoves per year to 107,500 shipmoves in Lease Year 10 (the Prior Lease Agreement’s MAG was 75,000 shipmoves with no annual increases.)
• Volume Incentive Discounts (VID): A $10 per shipmove discount for the first 17,500 shipmoves exceeding the applicable MAG, and a $16 per shipmove discount beyond that (the Prior Lease Agreement’s VID was a $10 per shipmove discount for the first 10,000 shipmoves exceeding the MAG (75,000 shipmoves) and a $20 per shipmove discount beyond that.)
• Proprietary Cargo: Language from the Prior Lease Agreement was removed stating that only certain cargo associated with MSC would be eligible for the negotiated shipmove rate. Under the new Agreement, all cargo containers would be billed at the negotiated shipmove rate. In contrast, in the Prior Lease Agreement, the County billed cargo not associated with MSC at significantly higher tariff rates. As a result of the new arrangement, ECT is positioned to offer more competitive rates for non-MSC-associated cargo. However, any cargo container volumes handled by ECT that had previously been handled by a different Port Everglades marine terminal operator within the previous twelve months will not be eligible for volume incentive discounts for the first twelve months that cargo moves through ECT.
• Capital Expenditures Reimbursements: County will provide ECT with payment credits in an aggregate amount not to exceed Three Million Dollars ($3,000,000) as reimbursement for approved Capital Expenditures incurred by ECT for leasehold improvements to the Premises. These improvements include (1) resurfacing, pavement overlay, and restriping of the Premises and (2) design and installation of a container and equipment wash rack and must be completed by the end of 2028 to be eligible for reimbursement.
During the last ten Fiscal Years, MSC accounted for the movement of more than 1.6 million 20-foot Equivalent Units (“TEU”) in containerized cargo and over $75 million in revenue at Port Everglades. MSC has operated several services connecting Port Everglades with the Caribbean, Latin America, Europe, the Mediterranean, and the Far East using some of the largest container vessels to call the Port. These services enhance the Port’s value proposition to its stakeholders. MSC's TEU throughput in Fiscal Year 2024 grew approximately 9% compared to Fiscal Year 2023.
By the end of the initial term, the economic impact of the proposed Agreement is estimated to support 1,615 total jobs, of which 537 are direct jobs, 488 are indirect jobs, and 590 are induced jobs. A total of $128,782,000 in annual personal income is expected to be generated from these jobs. The annual impact on business services revenue is projected to be approximately $203,861,000. State and local taxes of $13,345,000 are expected to be generated annually. The economic impact is based on the MAG and will increase for any shipmoves exceeding the MAG (see Exhibit 3).
The Notice of Public Hearing for this second public hearing was published twice (April 25, 2025, and May 2, 2025) pursuant to the applicable provisions of Chapter 94-429, Laws of Florida (see Exhibit 4).
The Agreement has been reviewed and approved as to form by the Office of the County Attorney.
Source of Additional Information
Jorge A. Hernández, Director of Business Development, 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
Total guaranteed revenue from the Final Premises Effective Date through the initial term of the Agreement is estimated to be $88,266,344, including land rent and MAG payments for container shipmoves. Additional revenue will be generated by any cargo throughput exceeding the MAG.