Federal judge revokes permits for $635 million Delaware port terminal

Winter is coming. But the war over Delaware river shipping is just heating up.

A new $635 million is proposed Edgemoor Container Terminal near Wilmington suffered a major setback this week after a federal judge on Monday threw out several key federal permits that would have allowed the new terminal to be built.

When completed, Edgemoor Terminal will be “the largest shipping terminal in Delaware since the current Port of Wilmington opened in 1923,” a “green port” that state officials say will quadruple the Port of Wilmington’s container cargo capacity, and to allow a new class of larger container ships to be serviced through the world’s ports.

But this week’s U.S. District Court ruling is likely to throw a major wrench into Delaware’s construction plans, setting back a long-planned project that state officials have called Delaware’s most important new infrastructure project since Route 1.

For many years the Port of Philadelphia (Philaport) and its operators have raised a number of legal, regulatory, and political challenges to block the proposed Edgemoor Container Terminal in Wilmington, arguing that a new terminal on the Delaware River would divert business from the Philadelphia terminals and impede upstream vessel traffic.

Most of these issues have been mooted, largely clearing the way for the Edgemoor project. But Monday’s U.S. District Court ruling overturns several important federal permits following a lawsuit filed against the U.S. Army Corps of Engineers by the operators of the Port of Philadelphia and the Gloucester Marine Terminal in New Jersey.

PhilaPort officials and advocates hailed the judge’s decision as a step in the right direction. Delaware officials are less optimistic.

“This decision is yet another example of the Ports of Philadelphia trying to stop Delaware from building a new facility in Edgemoor to expand our maritime economy and create jobs for Delaware families,” wrote Eugene Bailey, executive director of the quasi-public organization. Diamond State Port Corp., which owns the Port of Wilmington.

“While we have not been involved in the litigation, we will work with the Corps to resolve any issues so that we can move forward as quickly as possible,” he wrote.

Here’s what we know.

Why did a federal judge revoke the permits for the Edgemoor terminal?

In short, U.S. District Judge Mark Kearney ruled that Army Corps officials did not follow their own rules in approving permits for the Edgemoor project.

Attorneys for the Ports of Philadelphia argued that the Army Corps did not do full due diligence in evaluating objections by Philadelphia port operators to the Wilmington port plans and did not adequately assess safety and navigation concerns.

Attorneys for the port operators also said the Army Corps failed to consider the economic implications for PhilaPort, which has contributed millions of dollars in Delaware River Main Channel Deepening Project which smoothed the way for the transport of large container ships by deepening the river by five feet, from 40 to 45 feet.

The lawsuit argued that the proposed new Delaware port is not “primarily designed to attract new businesses to the Delaware River, but rather to divert existing business from the upriver ports in the Philadelphia area.”

Kearney was sympathetic to this economic argument, but only to a certain extent.

“The Port Authority of Philadelphia may find it unfair to be subject to competition from a neighboring port that benefits from public works that the Port Authority of Philadelphia has agreed to fund,” Kearney wrote. But it’s not really the federal government’s problem, he argued.

Kearney wrote that the problem is that the US Army Corps “arbitrarily and capriciously departed from its own procedures” when it did not require the Diamond State Port Corporation to obtain a “Statement of No Objection” from PhilaPort, the river deepening project. sole non-federal sponsor.

Kearney also ruled that the Army Corps “did not make informed decisions” when it considered the safety and river navigation effects of Edgemoor’s creation of a basin to allow large ships to turn and change course in ports.

Accordingly, Judge Kearney reversed the Army Corps’ multiple approvals of Diamond State’s Edgemoor plans and sent the plans back for reevaluation.

What does this decision mean for the future of Edgemoor Container Terminal?

Supporters of the Port of Philadelphia welcomed the decision.

The decision is a “significant result for the Philadelphia Regional Port Authority (PhilaPort),” Andrew Levin, a partner in the Stradley Ronon law firm who led PhilaPort’s legal efforts against the Edgemoor plans. “We were pleased that the judge generally agreed with our position, voiding the various underlying permits that resulted in the U.S. Army Corps of Engineers reevaluating the project.”

Levin called the decision “a big first step.”

“There is a process, and in this case, that process was not followed,” Port of Philadelphia officials wrote. “As a non-federal sponsor of the Delaware River Main Channel Dredging Project, PhilaPort is encouraged by the court’s decision to ensure that process is followed now and in the future.”

Delaware officials stress that the container port will continue to move forward despite the wrinkles.

“It’s a setback, but only that,” wrote Delaware Secretary of State Jeffrey Bullock. “There is tremendous support for this project in Delaware.”

Bullock said the state cannot comment on litigation — even one in which the state is not a party — but Delaware “will work with the U.S. Army Corps to resolve any issues so that we can restore permits as quickly as possible and keep this project moving forward.” “.

A spokesman for the Army Corps declined to comment on the decision. The Army Corps can appeal this decision.

The court setback for Edgemoor comes amid a flurry of good financial news for the project, as the Port of Wilmington this week announced $127 million in federal money for environmentally friendly cargo handling equipment. will be split between the existing Port Terminal and the proposed Edgemoor Terminal.

Delaware in May laid down $195 million for the terminal, bringing the state’s total investment to approximately $250 million. Port operator Enstructure has agreed to pay more than $300 million to build the container terminal.

State officials say the Edgemoor terminal would create nearly 6,000 new jobs if it moves forward, including 3,100 direct jobs, bringing in $39 million annually in state and local taxes.

Matthew Korfage is a business and development correspondent in the Delaware region covering all things land and money: openings and closings, construction and the many corporations that call the First State home. Send tips and insults to [email protected].