About the Port
Is the Port Authority a government agency?
Yes, the Port Authority is an independent agency authorized under Chapter 4582 of the Ohio Revised Code. The City of Cleveland and Cuyahoga County created the organization in 1968, and each appoints individuals to the nine-member Board of Directors. The Port holds public meetings, makes its records available for public inspection, and receives a portion of its funding from a countywide property tax levy. Committee and full board meetings are generally held Wednesdays at 8:30 a.m. on an every-other-month schedule.
What does the Port Authority do?
The Port Authority is a public agency with a dual mission:
- It is an entrepreneurial enterprise that operates the Port of Cleveland and spurs job growth and economic development by providing project financing for a wide range of new construction and expansion projects across the region.
- It is a government agency leading a series of critical and sustainable initiatives along the Cuyahoga River ship channel and Cleveland’s downtown Lake Erie shoreline to create and enhance community assets.
Who runs the Port Authority and what is the source of the agency’s funding?
The Port is an independent organization overseen by its Board and managed by its President/CEO. The Port Authority funds its operations with revenues from its maritime and financing activities, as well as a countywide property tax levy.
Are the Port Authority and the Department of Port Control the same agency?
No. The Department of Port Control is part of the City of Cleveland and oversees Cleveland Hopkins International Airport and Burke Lakefront Airport. It is completely separate from the Port Authority.
What is the Port of Cleveland?
The Port of Cleveland is the Port Authority’s maritime operation and has cargo terminals with 12 docks to the east and west of the Cuyahoga River along the Lake Erie shoreline. The Port contracts with private companies that operate the terminals and hire the workers who load and unload ships.
What types of cargo are handled at the maritime terminals?
Cleveland Bulk Terminal, west of the mouth of the river, handles iron ore and limestone that arrive by ship from other Great Lakes ports. The iron ore then travels up the river on smaller vessels to the ArcelorMittal complex, which depends on this raw material for its steel production. The limestone is transported inland via the rail network serving the Port. CBT is available for handling other dry bulk cargoes as well.
The Port’s general cargo operation is located directly east of the river and largely handles imported steel products including coils, slabs, and rods to satisfy demands for steel not met by U.S. producers. The steel is used to manufacture various products including auto parts, batteries, and consumer appliances. Ninety percent of cargo that comes into the Port of Cleveland is imported, with the other 10 percent coming from within the Great Lakes. While the Port primarily handles incoming cargoes, it occasionally handles project cargoes that are produced locally and exported around the world.
Why is the Port Authority involved in financing development projects?
State law grants port authorities certain powers to facilitate economic development. For example, they can issue bonds and provide financing for development, redevelopment and expansion projects. Our Port is committed to using these statutory powers to foster economic growth, and since 1993 has provided nearly $2 billion in financing for projects that have literally changed the landscape of our region. Our development finance business provides cost-effective access capital to organizations whose project financing needs are not otherwise met by public and private sources. And the benefits from each project ripple through the area economy, generating jobs, consumer spending, and tax dollars that flow to schools, safety forces, and other public services.
Where does the money come from for these projects?
Private dollars – not taxpayer funds – are used to finance the projects. The Port has two programs each with its own funding structures: The Conduit Financing Program – which accounts for nearly all of the financing – and a Common Bond Fund Program.
With conduit financing the Port brings borrowers and investors together, but does not put its own dollars into projects and does not incur project risk.
The Common Bond Fund has pooled loan dollars and is managed by the Port Authority. We also provided the program reserves.
Are the bonds issued by the Port taxed or tax-exempt, and who makes that decision?
Most of the bonds the Port Authority issues are taxable because the borrower is using the dollars for a private-sector project, such as construction of an office facility. The taxability of bonds is determined by the IRS, not the Port Authority. The majority of tax-exempt bonds are for governmental and non-for-profit uses – and again the taxability is determined by the IRS.
Why do developers and other entities turn to the Port for financing projects?
There are several reasons why organizations would turn to the Port Authority to assist in financing. The first is that in order to issue municipal bonds, you must be a governmental organization created by statute. Cities, counties and other units of government do not have the same flexibility in entering into complex legal and financial relationships as port authorities do. In other states, there are similar organizations (Finance Authorities, Bond Banks, etc.) that carry out the same functions that ports do in Ohio.
The types of bonds issued by the Port Authority typically carry 20-30 year terms and have a fixed interest rate. These features are not available to organizations from traditional lending sources. The Port also has the ability to own, construct, and lease assets, which is usually part of the financing and can add savings to a project’s overall economics. None of the Port’s tax dollars are used in any of the financings.
What projects has the Port Authority financed and where are they located?
The Development Finance Group has provided financing to developers, companies, municipalities, nonprofits for more than 70 projects, primarily in Cleveland and across Cuyahoga County. Entities and projects that have received financing include the Rock and Roll Hall of Fame & Museum, the Cleveland Museum of Art, the Flats East Bank Project, Jergen’s Inc., Applied Industrial Technologies, Parma Community General Hospital and the Cleveland Cavaliers Practice Facility.
Is the Port Authority responsible for dredging the Cuyahoga River and keeping the navigational channel open?
Every year the 6.5-mile navigational channel needs to be dredged to remove sediment that has collected and could otherwise reduce the depth that ships need to carry full cargo load. The U.S. Army Corps of Engineers – which is responsible for dredging – scoops out enough sediment annually to fill most of a sports stadium. Currently that sediment is disposed of as waste in what are essentially landfills along Lake Erie.
What are the Port Authority’s plans for sediment management?
As part of its 2011 Strategic Action Plan, the Port Authority has stepped up to lead efforts to develop a new paradigm that treats sediment as a resource that can benefit the community. In collaboration with numerous stakeholders, the Port is exploring options for using sediment in a variety ways including roadway construction, brownfields cleanups, landfill cover, beach nourishment, and the creation of new aquatic habitat areas.
Opportunities for such beneficial use greatly expanded in 2011 when the Ohio Environmental Protection Agency determined that sediment could be placed on commercial and industrial sites. In addition the research arm of the U.S. Army Corps of Engineers issued a report that supported the potential for beneficial use. The viability of beneficial use was also demonstrated in 2010 when a year’s worth of sediment was used to cover a brownfield that the City of Cleveland is redeveloping.
What is the Cleveland Lakefront Nature Preserve (formally known as Dike 14) and what’s the Port Authority’s role there?
The Cleveland Lakefront Nature Preserve is an 88-acre site on Cleveland’s east side where sediment dredged from the river was placed from 1979 to 1999, creating a land mass. Located at the northern end of Martin Luther King Jr. Boulevard, this former confined disposal facility has become a wildlife haven that provides one-of-a-kind access to the Lake Erie shoreline. More than 280 species of birds, numerous species of butterflies, 16 species of mammals, two species of retiles, 26 Ohio plant species, and nine species of trees and shrubs have been identified. Audubon Ohio designated that site – which is located at the intersection of four migratory bird routes – as an Important Bird Area. The Port Authority manages the preserve and in February 2012 opened it to the public. It is also working with organizations in the community, particularly the Environmental Education Collaborative – formed in 2003 to connect people and nature at Dike14 – to maximize educational and environmental opportunities at the site for both adults and children.
How much money does the Port Authority receive from its levy and how is that money spent?
Every five years the Port Authority goes before the voters of Cuyahoga County for a property tax levy. The levy is at .13 mills – the same level as in 1968 when the Port Authority was created. The levy generates about $3.2 million per year, with property owners paying about $3.50 for every $100,000 of assessed value. The levy last passed in November 2007. The money is primarily used for capital improvements, security measures, maintenance of facilities, and other maritime-related operating costs.
Who is responsible for security at the Port’s facilities?
The Port developed a security plan based on U.S. Department of Homeland Security requirements. The U.S. Coast Guard enforces the Port’s security plan, polices water and Port facilities, and issues fines for non-compliance. In addition, U.S. Customs and Border Protection boards every ship that docks at the Port, checks the identification of crew members, conducts background checks when needed, verifies shipments, and examines the vessels for any suspicious or potentially dangerous cargo, such as narcotics or weapons.