Shipbuilding company reaches deal with county

After nearly two months of negotiations, county officials reached an agreement with a local shipbuilding company to lease a facility at the Barge Port that has been vacant for more than half a year.

The agreement made between the Putnam County Port Authority and St. Johns Shipbuilding went into effect Tuesday and was announced by County Administrator Terry Suggs at yesterday’s Board of County Commissioner’s meeting.

“It took a couple of opportunities to get that done, but we’ve finally got the signed copies back,” Suggs told the commission.

St. Johns Shipbuilding, which already has a facility on Stokes Landing Road in Palatka, agreed to pay $5,250 a month plus a 6.75% sales tax, according to the agreement. The company said in April it will use the facility as a satellite location “primarily for fabrication and warehousing of aluminum components” for the ships it builds.

The lease is a one-year deal, but the company has the option to extend the agreement to four additional one-year terms. It also has the right to first-option if the Port Authority decides to sell the property.

The company, which began in 2006, currently employs 160 workers and conducts $30 million in business a year, said General Manager Bobby Barfield, who made the case for the lease before the county commission. “We have a great need for expansion, and the Port Authority’s location would be a great location for us to use as a satellite facility,” Barfield told commissioners on April 9.

The company’s client base and reputation made it a good candidate for the lease, county officials said. According to the company website, the company has built a range of steel ships for “commercial and government entities building under U.S. and foreign flags.”

The Barge Port’s 20,550-square-foot warehouse is seen as an economic development engine for the county, and having a local business like St. Johns Shipbuilding occupy that space made it an even stronger candidate, Suggs said.

“We have a local company that’s doing well that was looking for a place to expand its operations, and luckily we had a facility available,” he said. “It’s a tremendous project for the both of us.”

Also part of the lease was the company agreeing to pay $31,600 for improvements to the facility in lieu of a security deposit, according to the lease. 

Included in the list of approved improvements are renovations to existing infrastructure like air conditioning units and electrical systems and $10,000 in renovating the bathrooms to make them handicap accessible.

St. Johns Shipbuilding didn’t return requests for comment by press time Tuesday, but Administrative Manager Kelli Hilligus said in an April 11 email the company hopes to hire “40 to 60 new employees” as a result of the lease.

“It would enable us to expand our footprint and secure more aluminum vessels to construct, allowing us to hire and train more local personnel (and) keeping work in Putnam County as opposed to farming out jobs to other shipyards in the gulf,” Hilligus added.

Initially, county negotiators were looking to strike a deal with another company, J&M Metal Works. That company submitted a bid for the warehouse but was quickly denied by the Port Authority at its April 9 meeting after only presenting a single-page letter with proposed rent payments and dockage fees.

At the time, Commissioner Jeff Rawls called on the other members to oppose the deal due to lack of information. Barfield, who was in the audience at that meeting, then proposed the county do business with St. Johns Shipbuilding.

One of the sticking points that dragged out the negotiations was company officials’ questions regarding performing an environmental assessment of the property. 

Ultimately, both parties agreed doing so is currently “not practical,” but added the county would have to prove St. Johns Shipbuilding is responsible “if environmental contamination is found in the future,” according to the lease.

Palatka Daily News

1825 St. Johns Ave.
Palatka, FL 32177
(386) 312-5200

 

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