Tag: Mikie Sherrill

Hanwha Philly Shipyard says it needs a lot more space outside its 110-acre South Philadelphia complex to win lucrative U.S. Navy contracts, turn the money-losing facility profitable, and hire up to 1,000 union welders and metalworkers.

The Korean-owned yard’s leaders thought they had found just the place, four miles by barge down the Delaware River at the New Jersey-funded Paulsboro facility, vacated by the offshore wind industry when President Donald Trump killed that program. In December, Hanwha agreed to take over the lease.

But port operator Holt Logistics refused approval and sued to block the deal. After months of lobbying, Hanwha has given up and is now collecting offers from southern states that hope Hanwha will invest a big chunk of the $5 billion it has pledged for U.S. shipbuilding into their yards and future workers.

This despite the fact Hanwha’s proposal enjoyed support from federal, state and local officials and even made it into the U.S. military budget for fiscal year 2026, which called for $110 million “to support shipbuilding industrial capacity” and steel fabrication in a manufacturing facility “formerly used for offshore wind manufacturing.”

Paulsboro Mayor John Giovannitti estimates that on a given day, there are fewer than 50 workers at the port.

Leo Holt, whose century-old company runs ports in Gloucester City and South Philadelphia, said he’s not completely averse to manufacturing around the Paulsboro terminal after his family’s plans to beef up container and bulk shipping there accelerate.

Hanwha declined to comment, confirming only that the shipyard is still looking for space “in the U.S.”

What went wrong?

Since the early 2010s, New Jersey borrowed and spent more than $500 million building a Paulsboro wharf, highway ramps and other facilities to attract big employers to the port. It replaced lost oil industry jobs and also compensated for nearby Camden’s loss of piers due to Holtec Inc.’s redevelopment in that city’s aging port district.

In borrowing documents and news releases, the public spending was justified by predictions that the port would draw hundreds, even thousands, of port and industrial jobs, which in more than a decade have yet to arrive.

Paulsboro sublets the facility to Holt as the port operator. Holt paid $1.6 million to use the property last year.

At the urging of then-Gov. Phil Murphy, then-State Senate President and iron workers union leader Steve Sweeney, then-Paulsboro Mayor John Burzichelli and other officials, Holt in 2020 agreed to let EEW, a global pipemaker based in Germany, build supports up to 400 feet long and 40 feet across for the federally subsidized offshore wind-electric generation facilities that its Danish partner Orsted planned to locate off the New Jersey coast.

Orsted canceled in 2023, citing rising costs. Trying to cut his company’s losses, EEW executive vice president Esben Strandgaard began looking for new tenants, attracting more than 200 inquiries and initiating talks with Hanwha.

Hanwha needed the landlord’s permission to take over the lease. Hanwha Defense USA President Tom Anderson, a retired Navy rear admiral, and the Holts met last fall to discuss the proposal.

Instead of approving, the Holts sued, challenging EEW’s authority to pick a replacement and demanding control of the facility.

Hanwha, aided by its political supporters, tried to make a deal, but Holt stood firm. In March, Hanwha canceled the agreement.

What the Holts want

“The north star for redevelopment at Paulsboro has been marine terminal operations,” said Leo Holt, president of the Gloucester City-based company. “We stretched to assist the state in any way we could,” but “Hanwha was never a part of the plan, nor was shipbuilding.”

Holt spoke of the failed industrial proposals — wind, shipbuilding, and others to build power plant equipment on site — as an obstacle, not a goal.

“The detour imposed on New Jersey is over, and the road is clear to the Paulsboro Marine Terminal,” he said. “We were glad to see that the page was turned on the detour.”

Holt Logistics, which has been expanding containerized cargo facilities on both sides of the river, has shipped containers to Paulsboro and hopes to augment Paulsboro’s current port tenants, Holt said.

Those include Novolipetsk Steel (NLMK), owned by Russian billionaire Vladimir Lisin, which due to Ukraine war sanctions stopped importing Russian steel through the port for its plant in Farrell, Pa., and has switched to steel from Latin America, East Asia, and other countries, according to Holt.

The port also ships containers to the U.S. Navy base in Rota, Spain, and to ports in Cyprus, Israel, and other Mediterranean countries.

More than a container port

New Jersey has spent more than half a billion dollars improving the Paulsboro site with a wharf, highway connections to I-295, and other public works, the mayor said.

“I’m not aware of Paulsboro people, Gloucester County people, working there right now,” said Burzichelli, now a state senator and a supporter of both the wind and the Hanwha projects.

New Jersey invested in the BP site to make it more than a container port, Burzichelli says.

“That [state-built] wharf was designed to handle any industry, and the public investment was designed to create the maximum amount of high-paying jobs that can be created,” he said.

The port section “was always intended to be a bulk port,” requiring plenty of longshoremen’s labor, and “certainly not a container port,” which “take up a lot of space but don’t generate big jobs,” Burzichelli said.

“They don’t pay taxes the way an [industrial] building will pay,” he added.

The Holts’ “choices and the interest of the state of New Jersey, the interests of Gloucester County, and the interests of the borough of Paulsboro, are not aligned, at this point,” Burzichelli said. “I hope we can get them aligned.”

Mayor Giovannitti said, “We thought we had a deal last year with Hanwha” but are left with “a $750,000 hole in our budget” — the annual payment, in lieu of taxes, that EEW and its partners paid the borough while it was operating. The town’s annual budget is $13 million.

What Paulsboro could offer

Strandgaard says he’s not surprised Hanwha decided not to “waste any more of their time” on Paulsboro: “They could not see themselves working with a hostile landlord.”

It’s an ideal site for shipbuilding or any other industry that needs a deep water port, he said. But “Holt Logistics really controls what comes in and out. This was very upsetting, for us and Hanwha, that Hanwha with the support of the Navy did not have enough leverage.”

Other East Coast sites would take a year or more to prepare. “The beauty of Paulsboro is they could start the day after” concluding a deal, Strandgaard said.

He said he was surprised the new administration of New Jersey Gov. Mikie Sherrill didn’t make landing Hanwha a priority.

Sherrill was “disappointed that EEW could not reach an agreement with Hanwha or other parties despite the state’s efforts to facilitate discussions and bring stakeholders together,” spokesperson Maggie Garbarino said in a statement.

Holt’s goal: A modern marine terminal

On any given day, between 500 and 900 Holt employees are moving cargo at the company’s South Jersey operations, Holt said. He declined to estimate how many of those were in Paulsboro.

According to tax records, the port handled about 250,000 tons of cargo last year. That’s less than one-tenth of all South Jersey Port Corp. cargoes.

Holt called the state “vital partners in the renovation of the facility. We are working to have both marine operations and manufacturing operations. But we cannot be deterred from taking it where we promised: to be an active modern marine terminal.”

He said he expects the Sherrill administration will prove to be more congenial to the Holts’ vision for the property — “manufacturing, distribution, or anything” that makes sense to his family.

South Jersey officials say they haven’t given up. “The people of Paulsboro were told this was about jobs, jobs, jobs, and those would be manufacturing jobs. Not stacking containers four high with automated forklifts,” Giovannitti said.

Burzichelli still hopes Hanwha and Holt can be brought to the same page. “Many of us still don’t think we are done with manufacturing,” he said.