Will Isern

wisern@pnj.com

Before America was a nation, Pensacola was a port.

Since Don Tristan de Luna first sailed his fleet of ships into Pensacola Bay in 1559, through the booming lumber years in the 19th century and into the modern era, the city has long been valued for its deep, navigable bay. Pensacola boasts a rich maritime history, and the Port of Pensacola and its predecessors played a central role in making the city into what it is today.

But changes to the shipping industry throughout the latter half of the 20th century locked Pensacola out of becoming a major commercial hub. The port’s importance has dwindled, and recent hopes that Pensacola could find a home in the offshore oil and gas industry have fallen flat. Today, the port is at a crossroads, and city leaders are beginning to ask if it’s time to consider new uses for the 50 acres of waterfront property it occupies.

The Pensacola City Council has allocated $100,000 to fund a study to answer two questions: Is a port the best use of our waterfront property, and, if so, how do we successfully transition our port into the 21st century?

Whatever is to be done, something has to change. City leaders acknowledge the port is on track to need a subsidy from City Hall if new revenue streams aren’t found.

Pensacola city admin: Deepflex 'not happening'

A lumbering past

The earliest documented shipment of commercial cargo out of Pensacola was a load of pitch pine products, wood masts and spars for sailing vessels shipped in 1743. Pensacola wouldn’t be settled in its present location for another 11 years.

Pensacola remained an active shipping port for Spanish, British and, eventually, American merchants throughout the late 18th and early 19th centuries, but it was the lumbering boom following the end of the Civil War that lifted Pensacola’s port to global prominence.

In the 20 years following 1875, some 4.2 billion square feet of lumber valued at $50 million was shipped from Pensacola. As local historian John Appleyard wrote in his 1976 booklet on the port, “artists of the day pictured the harbor as a forest of masts, with scores of ships present.”

The port rose to its height in 1913 when $23 million was moved across the docks, but a recession over the next two years shuttered two Pensacola banks. Along with the start of World War I, the bank closures and lack of a commercially navigable river led Pensacola to fall behind its neighbors in Mobile and New Orleans. By 1915, the golden age of lumbering had ended.

Cuba, Renault and the port as city function

The modern port can be traced to the establishment of the Pensacola Port Authority.

After years of decline at the port, local civic leaders banded together and sought to bring the port under public ownership. Working with state representatives, local leaders convinced the Legislature to establish the Authority in 1943.

The Authority acquired major wharves that had been owned by a handful of railroad companies and began work to rebuild the port as an economic hub. New facilities were built and by the late 1950s the port was storing government-owned cotton, importing hundreds of foreign cars — particularly Renaults — each year and regular trade lines traveled between here and Cuba.

But the Cuban embargo in 1960 and the decline in demand for foreign cars in favor of American models again sent port leaders looking in a new direction. Port facilities were again expanded through the 1960s and agricultural and oil imports prospered for a number of years.

Cuba shift could boost Port of Pensacola

It was a surprise suggestion by then city-manager William Law in 1970 that set the port on the track to where it is today. Seeing the potential for port revenues to serve the wider city, Law suggested the city absorb the port and abolish the Port Authority. The shipping community, according to Appleyard’s account, was stunned, but the change was made in 1974.

“Almost at once you could begin to see the thing go like this,” said Appleyard, waving his hand in downward sloping motion. “Before you had 12 effective salesmen and now you were relying on one or two people who were employed by the city to do just that. A couple of them were very good, but they were operating semi-crippled from what it had been before.”

The ensuing 20 years would see the port transition from an operating port to its current landlord tenant model, as well as a shift away from agricultural products toward exports of wood pulp, frozen foods and building materials.

Offshore oil goes belly up

The port today is in much the same place it was following the Cuban embargo. Activity remains, but the industry that had promised a bright future is in dark days.

When Pensacola Mayor Ashton Hayward took office in 2010, he commissioned a committee to evaluate the port’s operations and potential for growth. The price of oil at the time was near a record high and the port’s main tenant, Offshore Inland, a servicer of industry ships, was performing well and had raised the port’s visibility by bringing in massive world-class vessels.

The committee’s resulting recommendation was that the port continue to pursue the niche market of servicing the offshore industry. With that recommendation in mind, it was with much celebration in June 2014 that plans were announced to bring a Brazilian company called Deepflex to the port to produce underwater pipe.

Almost immediately after that announcement, however, the global oil market dropped from near all-time highs to a low not seen since 2002. As a result, the Deepflex project folded leaving behind an unfinished warehouse, and the port has allowed Offshore Inland to run up a tab of more than $700,000 in past due docking fees.

“Frankly, no one ever expected the barrel price of oil to go from $100 to $27 in two years’ time,” said port director Amy Miller. “So every port in the country that’s involved in the oil and gas industry is having difficult times right now, and we’re no exception.”

Despite being a function of the city, the port operates like an independent business. The port hasn’t needed a subsidy from the city's general fund in 13 years, but Miller acknowledged that could change if conditions at the port do not improve.

"Could we sustain that for an extended period of time? No, I don't think any port could," said Miller. "But over those years of having some good years, we built up a little bit of a nest egg so we have some money set aside that could bridge the gap for a few years while we're building some new business sectors."

It's possible that the project to replace the Pensacola Bay Bridge will give the port time to find a new future. The bridge construction will require massive amounts of materials and equipment, much of which will have to be staged nearby during construction. The port has a vacant 10 acres directly south of The Fish House restaurant, and Miller and her staff are pitching that land to the bridge contractor, Skanska, as the most logical place for staging. The port would collect fees for the use of the land while the new study is conducted.

"That project comes at a good time, there's no question about it," Miller said.

The way forward

Deciding what to do with the port will come down to one question, said Hayward.

"It's going to be about what's best for the citizens and what do they want," he said. "The port is 50 acres in a historical city that we need to be very objective about how we look at it in the 21st century and where we’re going."

When Hayward's Port Advisory Committee released its findings in 2011, its report posed the question: "If the Port did not exist, would local industry be negatively affected in terms of economic activity and or jobs?" The answer, the committee said, was no.

Today, however, folks like Scott Luth are leery of the suggestion that the port be closed. Luth is the president and CEO of FloridaWest, an economic development entity whose goal is to grow the local economy. Luth pointed to businesses like General Electric, which ships massive wind turbines from its facility on Scenic Highway. Attracting jobs like those, Luth said, could be made harder without a port.

"We’re one of the few deep-water ports along the Gulf Coast," said Luth. "So losing an asset like that is never seen as a positive from an economic development perspective. It puts us in a less competitive position when we might have clients who would want access to that ... Obviously if that were to happen, our closest port is in another state, so if I’m a business and I need a port and it’s in another state, I’m just going to move to that other state."

Big ships bring big business to Port of Pensacola

Like Luth, Florida Ports Council president and CEO Doug Wheeler said the Port of Pensacola provides an economic development asset that's hard to replace. Both Wheeler and Miller pointed to other ports around the state and nation that have taken innovate approaches to diversify their operation.

"Port Canaveral started out as basically a shrimping village and now it's one of the top three cruise ports in the world," Wheeler said. "But that doesn't happen in two, five or seven years, that takes a long-term vision and it has to be decided not only by the port and the market, but by the local community and local leaders as well."

Wheeler pointed out that once the decision is made to close a port, there's no going back.

"Once you go away from the port, you can't up and change your mind." he said. "It's gone."

Pensacola residents seem to agree the port should remain, but would like to see it improved. In the recently released Pensacola Young Professionals study, 59 percent of respondents said they would support the city seeking funding to renovate the port and increase its use, while 51 percent said they would be opposed to moving the port's operations to Pensacola Naval Air Station.

The port lies within city councilman Brian Spencer's district, and Spencer feels strongly that the port has been, "woefully underutilized."

"I think there's been a shift in the redevelopment of waterfronts," he said. "I think the public and elected representatives recognize the value of preserving or dedicating uninterrupted segments of waterfront land for public use in perpetuity."

Spencer said all options should be on the table in re-imagining the waterfront.

"I want the discussion to be broadened in such a way that we explore numerous options and configurations for the 50 acres on Pensacola Bay," Spencer said. "Just because you were the first port or a historic port, doesn't mean you need to maintain that use if it doesn't maximize the economic benefit or quality of life."

Making it work: Innovative port practices around the state

Port Canaveral

Port Canaveral makes its money hosting cruise lines, but also welcomes the public to a number of restaurants and recreational facilities. The port has a campground, public beach and pier, two parks with boat launches, and a seven-story “Exploration Tower” with observation decks and educational displays.

Port St. Pete

Much like Pensacola, Port St. Pete is located in the heart of downtown St. Petersburg. With no chance of competing with nearby Port Tampa Bay for shipping cargo the port struggled financially, but recently remade itself as a destination for super-yachts and scientific research. With help from the state, the port attracted and leased land to SRI International, a marine research company, which opened a facility at the port in 2007.

Port Tampa Bay

The largest of Florida’s ports by both size and tonnage moved, Port Tampa Bay is also the most diversified. The port handles both dry and liquid bulk products, containers, cruise ships and conducts shipbuilding and repair services. The port recently outlined a $1.5 billion plan for infrastructure improvements and expansion.

Video: Check out pnj.com for a quick video rundown of the port's history and current situation.