As deadlines for Avondale deal loom, Port of South Louisiana scrambles to line up advisors

As deadlines for Avondale deal loom, Port of South Louisiana scrambles to line up advisors
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Matthews said in an interview with The Times-Picayune that he is prepared to end the deal if the numbers don’t pan out.

“We said we’re going to follow the process and follow our experts to see where it leads at the end of the day,” Matthews said. “If the math doesn’t work, it doesn’t work. We move on.”

But Matthews, 39, who was tapped to lead the Port of South Louisiana after serving as the No. 2 at the Plaquemines Port, said he remains optimistic about the deal. 

“You miss 100% of the shots you don’t take,” he said, quoting hockey great Wayne Gretzky. 

High price tag 

The shipyard was once one of the state’s largest employers, building vessels for the U.S. Navy and others for nearly 100 years. But the last ship rolled off its docks more than a decade ago. What was left on the 254-acre site has required millions of dollars in environmental remediation and still will need substantial capital.

While the Port of South Louisiana’s objective of maximizing the site’s potential got a warm reception, a range of business and political leaders expressed doubts from the outset about the $445 million price tag. The skeptics have included Gov. John Bel Edwards, a key member of the Bond Commission.

Henry “Tut” Kinney, a New Orleans-based lawyer who has worked on major port and infrastructure deals, has tracked the proposed Avondale deal closely. He said he cannot see how it could pass muster with the Bond Commission given the terms that have been made public.

“There are no hard financial data that would support the purchase price or the repayment of the debt,” Kinney said. “In my opinion, it would be virtually impossible to pass the scrutiny of the Bond Commission.”

According to the agreement signed by Matthews, the Port of South Louisiana agreed to pay T. Parker Host the lesser of $500 million or the value of a subsequent third-party appraisal, which pegged the asset’s value at $445 million. That appraisal, conducted by Baton Rouge firm Cook, Moore, Davenport & Associates, was based on bullish projections of Avondale’s potential income over the next eight years, which were calculated from financial data that largely came from T. Parker Host.


About Mary Weyand 14483 Articles
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