Seven months after announcing a deal to buy the Avondale Global Gateway (AGG), the former Avondale Shipyard, the Port of South Louisiana (PSL) has cut its offer price by more than $100M for the 254-acre site as officials prepare to pitch the purchase to the state Bond Commission.
The port and T. Parker Host, the private-equity-backed firm that owns the site, have agreed to the new price of $330M.
The original price was for $445 million price announced in January that drew skepticism from trade officials, the governor and others who questioned how the PSL and CEO Paul Matthews could justify such a major price tag.
The PSL board approved the revised deal on Aug. 30, which would give the port control of the site for $280M in cash and a $50M mortgage note.
The former shipyard was purchased by T. Parker Host in 2018 from Huntington Ingalls for $60M and renamed the Avondale Global Gateway to push the facility to become a hub of trade and light industry.
But despite spending some $90M in environmental remediation and upgrades, Avondale's current owners have struggled to secure anchor tenants, leaving its future growth in doubt.
At the PSL board meeting, Jason Akers, the bond counsel from Foley & Judell, hired by Matthews to put together the financial presentation for the deal, projected gross revenue at Avondale tripling over the next decade.
Akers' outlook was based on reports from John C. Martin & Associates, a maritime industry consulting firm, real estate brokers LAI Latter & Blum and others. The Aug. 30 presentation made it clear that Martin & Associates hadn't conducted a full feasibility study of Avondale, only a short report that led to the lowering of the proposed sale price.
Martin will do a more detailed report for the bonds, assuming the state Bond Commission allows the port to move forward with its bond issuance on Sept. 21.
Avondale has three current tenants but has high hopes of securing additional industrial tenants in renewable energy and food production industries.
The deal depends on the port being able to issue municipal bonds to cover the purchase price, a step that requires a vote from the Bond Commission.
Port officials said they plan to submit required documentation no later than Sept. 6 to the board, which would allow time for a state board vote of the 21st. (NOLA.com 08/30/23) Avondale Global Gateway price drops by $100 million | Business News | nola.com
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