The SPA: From swagger to stagger and back again

BY RON BRINSON

Beyond its hammer-handed cruise terminal development battles, the news is pretty good these days for the State Ports Authority. South Carolina’s business leaders are falling in love all over again with the Port of Charleston and its post-Panamax future. Elected leaders especially are more committed than ever to nurturing Charleston’s maritime competitiveness. Supporting the port is a renewed article of faith for anybody who cares about the state’s economy.

The Ports Authority confidently promises the next 10 years will be a decade of progress. Good news, for sure, but how quickly we seem to forget that the authority’s last 10 years was a decade from hell.

A legislator said last week. “The Ports Authority was in jeopardy. There were times when we wondered if it would survive.”

“That’s not too strong a statement,” says authority board chairman Bill Stern. “We had a perfect storm of challenges, from the legislature, from customers and from our governor. The port system was definitely in jeopardy.”

Stern should know. The Columbia businessman was appointed in 2002 and has been authority chairman for six years. Many legislators and industry leaders praise him for keeping the authority steady when bad things started happening back in 2002.

In 2000, the Ports Authority was ambitious, supremely confident and financially strong. With a swagger, it moved confidently into the new century. Charleston was the second-busiest containership port on the East Coast, fourth in the nation. The long-planned Global Gateway development on Daniel Island was the port’s future.

But the authority would soon learn there’s a very fine line between swagger and stagger. It seemed to overplay its hand when a citizens group first objected to its Daniel Island project. In 2002, the Legislature summarily killed the Daniel Island plan. We might have heard the sucking sound of the Port of Charleston’s credibility gassing from its marketplace. A dozen years of well-touted plans were suddenly irrelevant.

Then Mark Sanford was elected governor, and he wanted full privatization of public port facilities. Stern recalls the governor’s directives more specifically: “He wanted the state out of the port business, period.”

To be fair to Sanford, privatization was not an evil concept, but the new governor pushed his concept at the very moment the authority’s all-in Daniel Island plan was in shreds. Sanford was compounding doubts about the Port of Charleston’s expansion commitments in a marketplace that demands such commitments.

The authority was churning in uncertainty. Stern and his colleagues scrambled to get a grip. Stern said he debated constantly with his friend the governor about privatization and the bi-state deal Sanford made with Georgia Governor Sonny Perdue for a private investment port facility in Jasper County. Stern has insisted publicly that that South Carolina was “played” in the Georgia deal.

The same Legislature that chopped the authority’s Daniel Island legs in 2002 initiated damage control and risk management when Stern and others sounded the alarm. Legislation was passed limiting the governor’s powers to remove Ports Authority board members and effectively ending the Sanford privatization initiative. Today, no other major U.S. port authority enjoys a greater elected-leadership support than South Carolina. The best example — the state’s contingency commitment to fully fund the federal project to deepen Charleston Harbor channels to 50 feet.

It’s no coincidence that Charleston’s market share supremacy peaked in 2003 and then declined steadily. The Port of Savannah, already a feisty competitor, eventually replaced Charleston as the second busiest containership port on the East Coast. Today, Savannah handles roughly twice as many containers as Charleston.

It is no coincidence that senior authority executives and some board members became weary and frustrated. Bernard Groseclose, an earnest authority executive for more than 25 years, stepped down as CEO in 2008. Stern chaired the search committee and eventually convinced Jim Newsome, an internationally respected steamship company executive, to take the job.

Newsome has reset the authority’s marketing compass to the competitive advantages of Charleston Harbor and the bigger-ships promise of the post-Panamax market. The Newsome team has honed a reputation for steely competitiveness — and not just for cargo and ships. Last month, John Wheeler, a Georgia Ports Authority senior carrier sales manager, suddenly resigned. A week later, he joined Newsome’s sales team.

Senate Finance Committee Chairman Hugh Leatherman credits Stern with steadying the authority in a very unsteady governance environment. “Bill kept a core of the authority board focused,” Leatherman said. “He stood up to the governor on selling the Port of Charleston and on that Jasper County deal. He thought our ports were worth fighting for and he did.”

This adds up to a good case study about unintended consequences of well-intended actions and Stern ought to write it. There are lessons aplenty from the decade from hell.

Ron Brinson, a North Charleston city councilman and former associate editor of this newspaper, served as president/CEO of the American Association of Port Authorities, 1979-86, and president/CEO of the Port of New Orleans, 1986-2002.