Posted on November 11, 2024
Philadelphia port leaders sued to stop Delaware’s port expansion plans, saying it would hurt ship traffic to their facilities.
Delaware’s port expansion plans are at risk after a Pennsylvania judge sided with Philly ports in lawsuit.
When the state of Delaware announced in May it would spend nearly $200 million to build the $635 million Edgemoor container terminal at the Port of Wilmington, it said the investment could create nearly 6,000 new jobs. But a recent court decision invalidating key permits could jeopardize the entire project. The state is partnering with private port operator Enstructure on the new facility.
U.S. District Judge Mark Kearney of the Western District of Pennsylvania ruled that the U.S. Army Corps of Engineers “arbitrarily and capriciously departed from its own procedures” in issuing the permits and ordered a closer, more in depth review of the project.
The Philadelphia Regional Port Authority (Philaport) and ports affiliated with Holt Logistics Corp., whose affiliates operate terminals in Philadelphia and South Jersey, sued the U.S. Army Corps of Engineers after it had approved Delaware expansion plans. They argued that the new Edgemoor port would divert shipping to Delaware from Philadelphia.
Holt Logistics CEO Leo Holt said Delaware wants to take advantage of the main channel deepening channel it once tried to thwart after it was completed with no cost to the First State.
“I think it’s actually a lot of effrontery to come up with a plan and sort of thumb your nose at the [non] federal sponsor, which was the state of Pennsylvania,” he said. “Delaware actually went to court to stop the [main] channel deepening.”
A spokesperson for outgoing Gov. John Carney said he’s disappointed by the court ruling.
“Quite frankly, we’re frustrated with the impediments that have been put in place by our competitors in Philadelphia,” Director of Communications Emily Hershman said. “While the state of Delaware was not involved in this case, we know the teams are already working quickly to get the permits back on track and move this important project forward.”
The Diamond State Port Corporation, the entity that manages the port for the state, held a special board meeting last week to discuss the judge’s ruling. However, most of the meeting was held in executive session, outside of public view.
Board Chair and Delaware Secretary of State Jeffrey Bullock said during open session he was still confident of the plan.
“This project has a huge amount of support in the state of Delaware,” he said. “We are not going to be intimidated by people from out of state who are acting in their own self interest.”
Delaware River Main Navigational Channel Deepening
Diamond State purchased the Edgemoor property on the Delaware River in 2017. The land was formerly a Chemours manufacturing site. Efforts to expand the port aim to take advantage of a project authorized by Congress in 1992 to deepen the riverbed of the main navigational channel.
Delaware and New Jersey opposed that dredging. Philadelphia partnered with the Corps and became the sole non-federal sponsor and paid $140 million of the total $400 million cost. The project allowed the city’s ports to capitalize on the expansion of the Panama Canal, which allowed bigger ships to reach East Coast ports and with more cargo.
The Edgemoor terminal would take advantage of the main channel deepening. Delaware obtained approval from the Army Corps to dredge a turning channel that would connect to the main navigational channel. The upriver ports argued the proposed new turning basin in front of Edgemoor would consume the entire breadth of the main navigational channel in that area, creating a bottleneck for ships heading to Philadelphia ports.
Judge Kearney faulted the Army Corps for allowing Diamond State to submit a permit application that included a study that failed to look at how the turning basin might impact traffic in the channel. He also ruled the federal agency should have required Delaware’s Diamond State to obtain a “Statement of No Objection” from PhilaPort as it is the non-federal sponsor of the main channel deepening project, which the Corps argued was a “harmless error.”
The Army Corps could appeal. A spokesperson with the Philadelphia District of the Army Corps declined to comment on the litigation.
Holt said he can’t see how PhilaPort can say it doesn’t object to Delaware’s current plan for Edgemoor.
“The plan that was sort of slapped together by Diamond State Port Corp did not take into account very real safety and navigational issues,” he said. “So I don’t see how they can now, at this point, not object to something that they raised objections to.”
Holt also criticized the level of transparency in the federal and state process of issuing permits for the Edgemoor facility.
“You had a process which did not have appropriate public scrutiny, was dismissive and denied the public questions and outreach,” he said. “Even at the appellate level, it did so in a kangaroo court sort of way.”
That point was driven home at last week’s meeting by Jeffrey Richardson, chairperson of the Delaware Community Benefits Agreement Coalition, which advocates for people potentially impacted by development. The group argued in 2020 that the public needed more than a month to submit public comments on three detailed reports on the proposed port expansion.
“People and the environment and the health of the people have to be a part of this process,” Richardson told the board last week. “We need to have a clear and open process where the plans for the development are made available to the public.”
In a statement, Bullock pushed back on the perceptions by Holt and others that the process was rushed and lacked transparency.
“The project has been the subject of many public meetings, hearings, and opportunities for written comments, most of which Holt Logistics participated [in] and expressed opposition,” the statement said. “The process was very deliberate and transparent, Holt Logistics just does not want competition.”
Longshoreman Kimoko Harris works at the Port of Wilmington and said he is worried about the jobs that won’t be created without Edgemoor. He says the judge’s decision denying the permits and the expansion is a “death sentence.”
“We have to have a terminal on the Delaware in order for shipping to survive in Delaware,” he said. “I mean, it’s that simple.”
Holt said he hopes Delaware’s new governor-elect, Matt Meyer, will engage Pennsylvania and New Jersey on future regional shipping cooperation and the First State starts fresh on a plan for Edgemoor.
