The steel remains of the long-shuttered Avondale shipyard are set to be transformed into a new commercial transit hub, according to state and parish officials who announced on Thursday the completed sale of the site to Avondale Marine LLC.
The long-awaited sale of the 206-acre property to a joint venture of two industrial-development firms marks a new stage for the industrial site that was a major economic engine in the New Orleans area for decades until it was closed in 2014.
Public officials and company executives expect the new facility, which aims to attract major transportation companies as well as smaller firms, to employ as many as 2,000 people when up and running — a far cry from the 26,000 welders, fitters and other workers employed there during the shipyard’s peak years.
Still, they see an opportunity to turn the decaying property into an important stopping point for goods heading around the world, which will complement the region’s already large shipping and transportation sectors.
“This site is going to be part of ... the distribution and supply chain of industries that are part of the new economy and the new sharing world,” said Jefferson Parish Councilwoman Cynthia Lee-Sheng.
Gov. John Bel Edwards said the sale will usher in “a new era” for the faded waterfront facility.
The purchase had been in the works for months as joint-venture partners T. Parker Host, a Virginia-based shipping firm, and Hilco Global, an Illinois-based financial services firm, negotiated the purchase with the shipyard’s former owner, Huntington Ingalls.
The sale price was not disclosed, but Adam Anderson, the chief executive of T. Parker Host, said the joint venture will spend well over $100 million on the site and its redevelopment.
The Advocate reported last year that Huntington Ingalls had dropped its asking price for the site to $95 million.
Anderson said he was attracted to the site for its 8,000 feet of riverfront access and 2 million square feet of heavy-industrial facilities in an area with a sophisticated transportation network thanks to its location on the lower Mississippi River near existing port facilities.
“When I first heard about this, I thought, 'It can't be real,' " Anderson said.
“This region is known for moving a lot of cargo,” he said. “We want to not only move cargo but add value to that cargo.”
Avondale Marine’s first order of business is to repair one of the docks along the river. That alone is expected to cost more than $10 million.
Future repairs will require permits from the Army Corps of Engineers. Other renovations will have to be made to most of the site to make it suitable for the firms Avondale Marine is hoping to attract.
The redevelopment projects are all aimed toward transforming the site from a place that used to build hulking thousand-ton ships into a modern, efficient cargo and logistics hub.
Avondale Marine hasn’t yet started marketing the site to potential tenants, but company executives will try to lure small, medium and large-sized companies to the site.
To provide Louisiana officials with an idea of its vision, Avondale Marine's executives gave them a tour of what they said is the similar Tradepoint Atlantic site in Baltimore. A former Bethlehem Steel plant there was redeveloped into a 3,100-acre cargo hub. Anchor tenants at that site include FedEx and Amazon.
In recent months, Jefferson Parish, the Port of New Orleans and the Public Belt Railroad have all enthusiastically supported the project by agreeing to favorable incentives and terms with Avondale Marine, including the building of a railroad spur to the site and a "payment in lieu of taxes," or PILOT program, to help the developers.
The shipyard — where thousands of blue-collar New Orleanians once made their living — began to downsize in 2011 after then-owner Northrop Grumman announced plans to shut it down and consolidate shipbuilding operations in Mississippi. In 2013, the last ship built at Avondale was launched, and it closed for good a few months later. Since then, it has lain dormant.
At the time, many local and state officials criticized the owners as slow in finding a buyer or new operator for the facility that would help preserve what was for decades a key source of high-paying, blue-collar jobs in the New Orleans area.