Port outlines BAX hub-deal terms

$1M rent is part of contract slated for agency vote today

10/27/2011

EDITOR'S NOTE: This version corrects that Gov. John Kasich attended a news conference at 10 a.m. Thursday.

A start-up company's operations at the former BAX Global cargo hub at Toledo Express Airport will be governed by a one-year, renewable contract under which the Toledo-Lucas County Port Authority would be paid both a fixed annual rent and a percentage of gross income if agency directors approve the deal this morning.

Gov. John Kasich attended a news conference Thursday morning following the Port Authority's meeting in the American Maritime Officers' board room at One Maritime Plaza.

BX Solutions Inc., which expects to hire more than 200 full-time and 350 part-time employees to sort and handle packages at the facility, is to pay the port authority $1 million next year, $1.25 million in 2013, and $1.5 million in 2014 for use of the hub, with $250,000 of next year's payment deferred until 2014 unless the company terminates the agreement before then.

The company also would pay the port authority 2 percent of gross revenue between $20 million and $40 million and 3 percent of gross revenue between $40 million and $60 million.

And if it terminates the agreement within the first three years, BX Solutions would owe the port authority $750,000 toward the cost of facility improvements that the agency plans to make for BX's use.

"The Toledo-Lucas County Port Authority is excited about the potential this partnership with BX Solutions could hold, especially because of the number of jobs -- 500[-plus] new full and part-time positions -- that the company plans to create in the first year," Paul Toth, the port authority's president and chief executive officer, said yesterday after the proposed terms were added to the agenda for the meeting Thursday.

"I'm very eager to get started and thankful to have reached an agreement with the port authority that is going to lead to the creation of [more than] 500 new jobs in northwest Ohio," said Chris Marshall, BX Solutions' chief executive officer.

Related resolutions on the meeting agenda include one authorizing a new agreement with the Ohio Department of Development for a $2.8 million state loan the port obtained two years ago for hub improvements to support BAX Global, and one authorizing the immediate start of the improvements' construction for use by BX Solutions. The department of development loan would become a grant if the BX project generates at least 100 full-time and 400 part-time jobs.

According to staff reports accompanying the resolutions, BX Solutions sees potential to increase permanent employment at the hub to 300 full-time and 450 part-time jobs within three years, plus as many as 100 workers during "peak season."

"Compensation and benefits for these permanent full-time and part-time employees will match, and in some cases exceed, those previously paid at the [f]acility [by BAX Global], and it is anticipated that a majority of the new positions will be filled with employees with prior experience at the [f]acility," the staff report states.

After 20 years of operation, begun as Burlington Air Express, BAX Global shut down its Toledo operations Sept. 1 after parent company DB Schenker declared that it was changing its business model and terminating the leases on its fleet of cargo planes. The closing cost about 700 workers, most of them part-time, their jobs.

BAX's lease on the facility expired in 2013, but the port authority last month approved a lease buyout under which the port authority was paid $12.8 million and received equipment valued at $1.75 million or more.

Most of the cash was used to pay bonded debt on the facility, but the port authority netted about $2.12 million on Monday.

Mr. Marshall is the son of David Marshall, who was president and CEO of Burlington Air Express when it came to Toledo.

The port staff reports state that BX Solutions' management team has an "average of 20 years experience each in package sortation and distribution solutions" and "a strong reputation with logistics management personnel, including significant customers that formerly used services provided" at the BAX hub.

BX Solutions' operations are expected to involve truck transportation exclusively at the start, and among the work the port authority plans to do to prepare the hub for its use is fence construction to separate it from the secured part of the airfield.

Other improvements include building truck docks to add 24 new loading-unloading bays, conveyor-system modifications, new package scanners and related equipment, and demolition of obsolete truck canopies.

Also, in accordance with state law, port directors will vote on waiving competitive bidding for the improvements.

Mr. Toth instead would be directed to negotiate contracts after port staff "informally seek expressions of interest and pricing from vendors and contractors deemed qualified and able to complete the requirements of the [p]roject contracts within the time constraints imposed by the need to improve the [f]acility" for BX Solutions' use, according to the staff reports.

Contact David Patch at: dpatch@theblade.com or 419-724-6094.