A Lack of Private Investment
The “No Taxpayer Funding Pledge”
The Port of Corpus Christi has committed that construction of the Harbor Island terminal would NOT require taxpayer dollars, however, private financing for the project has not been secured.
- When announcing its agreement with The Carlyle Group to develop the terminal, the Port of Corpus Christi said: “Construction of the Terminal would require no capital outlay from local taxpayers. Under the terms of the Agreement, the Port will realize significant regular rental payments, volume-based tariff income, land grants and other proceeds that will help the Port fund other aspects of its operations.”
- Charles Zahn, Jr., Chairman of the Port of Corpus Christi, explained that construction of the project is estimated at $1.2 billion, and it will come at no cost to taxpayers.
- In November 2019, the Carlyle Group, which had committed to invest $400 million in the project, abruptly pulled out, leaving The Berry Group as the project’s sole backer and questions about the Port’s ability to fund the project while keeping its “no taxpayer funding” pledge.
- When Carlyle announced its investment in the project, Port of Corpus Christi CEO Sean Strawbridge commented: “In partnering with such an experienced and well-capitalized firm as The Carlyle Group, the market should take notice and have a high degree of confidence of this project’s success.” Any confidence Carlyle’s investment instilled was lost when the company walked away.
“Given the commitment required to finance private dredging of a deepwater channel … the [Port of Corpus Christi] has to come up with a similarly deep-pocketed replacement private investor to continue.”