American Stevedoring Gone From Red Hook Terminal, by George Fiala

REPRINTED FROM THE RED HOOK STAR-REVUE, OCTOBER 2011

Two Mondays ago, on the 26th of September, the security guards manning the gates of the Red Hook Container Terminal were told before lunch that Sal Catucci, whose shipping company, American Stevedoring, had been operating the piers since 1992, was, after 5 pm, persona non grata and was not to be allowed through the gates afterwards except with an escort. That evening at 10:30, according to sources, he was back to sign papers turning over his operation to the Port Authority.

The next day a dockworker was overheard telling a co-worker that he was busy changing the cellphone numbers of his old bosses to the new bosses. Other than the bosses, nothing seems to have changed at the Red Hook Container Terminal. All the same ILA workers are working, ships continue to be loaded and unloaded, and the container movers are operating as before. To the casual observer, the only sign of change is the removal of the American Stevedoring sign at the Hamilton Avenue gate, and the emptying out of trucks from the big lot at the foot of Union Street.

Catucci and the PA battled for years
It is no secret that for some time the Port Authority has wanted Sal Catucci, in Red Hook since 1992, out. His last lease renewal was highly contentious. The Bloomberg administration decided, around 2002 that there was a better use for the piers than loading and unloading containers. The Columbia Waterfront District, abutting Piers 7-12, was on its way up after years of decay, and hotels, beer gardens and luxury housing were in a plan boosted by then Deputy Mayor for Economic Development Dan Doctoroff. American Stevedoring was the last Brooklyn shipping operation, and the city and state, under development czar Charles Gargano, was of a mind that Staten Island and New Jersey operations were sufficient to handle maritime traffic.

Catucci fought back, along with friends such as Democratic Congressman Jerry Nadler and former City Councilmember David Yassky, for whom blue collar jobs, and especially union jobs, are important to keep in the city. After five years of lawsuits and negotiations, a new 10 year lease for ASI was finally announced in April of 2008.
However, it appears that things have not been as peaceful as it might have appeared from Columbia Street, or for the matter the NYC press reports. According to persons connected with the industry, Stevedoring has not paid any rent since the lease renewal (at the time of the renewal ASI was in arrears for $2.6 million on rent, which was to be paid off as a credit against a Federal subsidy for barging freight to Newark). And ASI filed a massive federal lawsuit against the Port Authority in May of 2010, charging that the Port Authority, in violation of agreements, stopped applying for the Federal funds that would cover the barge operations necessary for the efficient and profitable operation of the business. The major reason for the granting of federal subsidies for barging to NJ is pollution reduction – as the Newark facilities are situated near the interstate highways. The more containers loaded onto trucks here in Brooklyn, the more driving through the city, over the bridges, and the more pollution in the city and damage to the roads and bridges.

Lease signed under duress
In addition, the suit charges that the lease ASI signed was signed under duress, that it was given them to sign within 24 hours of its presentation with no negotiation, and “differed from the version the Port Authority sent earlier.” A source tells the Star-Revue that the lease was in fact not favorable to ASI when compared to similar leases in other ports in the area. Finally, the suit states that the ‘lease limbo’ that the PA placed ASI under while deciding what to do with the port, a period of five years beginning in 2003, caused irreparable harm to their business as contracts with shipping companies were lost due to the uncertainty.

The Port Authority has in the past fought Catucci’s suits not on merit but on venue, which is usual for organizations such as the PA and Metro North. This particular suit, filed with the Federal Maritime Commission, was supposedly to be decided on September 28th, but was put off to next March just the week before the eviction. Calls placed to the ASI attorney on the case, Jeanine G. Bauer, did not result in any information as to the present disposition of the case, and the last entry on the public FMC calendar is dated the 23rd of September stating the PA’s request for further discovery.

Rumor on the street is that the Port Authority finally obtained an eviction notice against ASI early in the morning of the 26th, but that has not been confirmed. Another rumor is that a deal was struck with ASI forgiving the back rent and other debts, but that too cannot be confirmed at this time.

The fact is though that the Port Authority is not interested in bad publicity, nor does it like being sued, and finally it does not like to lose money and not get its rent due. In the 1980’s the PA had plans to sell Piers 1-6, the present day site of Brooklyn Bridge Park, to private developers, but the community fought that plan as they preferred a park, and rather than fight the PA ended up selling the land to the city, letting the city fight that battle. In the early 1990’s much of the Red Hook waterfront was rotting away and the Port Authority was happy to sell it to developer Greg O’Connell at what now appears to be a bargain price but at the time was a relief for the Port Authority – a problem taken off their hands.

Village Voice story
Dealing with lawsuits and unpaid rent, as well as bad publicity connected with a 2007 Village Voice story implying corruption involving one-time Port Authority chief Charles Gargano, was not something that the Port Authority must have been happy with (despite repeated phone calls and emails the Port Authority did not respond to requests for a statement). This makes plausible the notion, as some have suggested, that a settlement was reached with Mr. Cattuci in order to make him finally leave. A dockworker told this reporter that Catucci ‘is crying with two loaves of bread under each arm.’

Whatever the real story is, after a denial from an ASI spokesperson (as reported in our October 1st edition) that any change in ownership was in place, the ASI sign was removed on Saturday October 1st.

The future
So the question now is what is the future of Piers 7-11. From all appearances it seems that both the city and the Port Authority are determined to see the continuance of operations as is. In fact, with Catucci gone, they are now able to control things and wholeheartedly support an operator which will increase business for the operator, which will make the lease more lucrative to the Port Authority. In addition it will provide more union work. We spoke with Congressman Nadler’s press spokesman Ilan Kayatsky who indicated that the congressman has been actively engaged in the transition process and gave us this statement from Nadler: “As the operation of Brooklyn’s only port facility changes hands, I will continue to work to ensure that there is no break in container shipping business in Red Hook. I am grateful to American Stevedoring for years of service and for keeping Brooklyn’s only container port active for these many years. I look forward to working with Phoenix Beverages to expand container shipping in Brooklyn, and to foster the investment necessary to sustain this vital sector of Brooklyn’s and New York’s economy.”

No comment from Phoenix Beverage
We spoke with Phoenix Beverage VP (and son of the owner) Gregory Brayman who was not as forthcoming when we asked about an expanded role for Phoenix (probably because of ongoing negotiations with the PA), but indications are that they will be indeed become more important. Sources tell us that usage of some of the sheds will be moved around to give Phoenix a more contiguous space to operate. When they originally signed a lease on Pier 7, they were forced to take a shed on Pier 11, which they didn’t really want and ended up using for recycling – this will be moved closer to 7. Other sheds will become available as ASI storage is removed.

For the time being, the loading and unloading operations will be handled by container shipping group CGM CMA, who was granted a temporary license for this, but there are rumors that MSC, a leading South American shipping line, is in negotiations to take this over. This is a global company operating 432 container ships and would undoubtedly bring more business

Good News for the ILA
All of this is good news for ILA Local 1814 President Louis Pernice. In an off the record interview, Mr. Pernice indicated agreement with Congressman Nadler’s statement. He confirmed what this newspaper has learned about a new ship coming in as early as this Saturday (the 15th).

While ASI contends in their lawsuit and in other published statements that their business had been hurt by the uncertainty caused them by their landlord, others say that Catucci was no longer interested in pushing the business, and this fresh start is hopeful for the union workers.

In addition, a new operator will eliminate uncertainty in the union pension fund. An impromptu protest last month by dockworkers was aimed at ASI’s non-payment of over a million dollars in pension fund payments.

American Stevedorings phone numbers both in Brooklyn and in Newark are still in service and their website remains unchanged as of presstime. A call to the Newark number earlier this week was answered by someone ready to do businesse. We are told that the Port Authority is committed to cover the cost of the barging to NJ until an agreement is made with the eventual permanent operator.

What’s it all mean?
So what does this mean for Red Hook? One plus is more business for the local breakfast and luncheonettes. We have a new bagel place just opened across from the front gate of the terminal. A diner is set to open on Columbia between Union and Sackett. What about the big issue for many local residents – truck pollution? The Port Authority and the Federal Government are committed to mitigative efforts. Congressman Nadler and others are still committed to a dream of an underwater tunnel across the river for truck transportation. Possibly Phoenix Beverage with a more contiguous operation will have less need to travel on local streets. So for the time being, it doesn’t mean too much, except for the fact the we still needn’t fear luxury housing on our shoreline. For those of us that enjoy living in a mixed use area, still seeing people working blue collar jobs is comforting.
Lead players not talking

But what about the back story? So far both parties are not talking. But in a late-breaking development, outgoing Port Authority Executive Director Chris Ward, who not that long ago actually ran American Stevedoring for Mr. Catucci, made what some media reports have called an ‘absurd’ speech this past Thursday night at a conference sponsored by the Municipal Art Society.

Comparing the Brooklyn waterfront to Vietnam, in that nobody wins, Ward complained that the container operation here is preventing Governors Island from reaching its ‘full potential.’ He proposed moving all shipping operations to Sunset Park and perhaps building a hotel or school on the pier, an d possibly a bridge going to Governors Island from Red Hook.
With the Port Authority seemingly happy with the current container operations, and working to actually increase business, perhaps the real reason for Ward’s departure is his dissent with PA goals, instead of the rumored rift with the new governor.

While the Bloomberg administration has given up on private development of our piers for the duration of its administration, as evidenced by their recent Vision 2020 report on the state of the NY waterfront, perhaps its appeal might return with the next mayor, and there is serious talk about Ward as a candidate in the next election. He himself when asked sounded like he’s thinking about it.

Ward for mayor?
His speech at the Municipal Art Society’s event was greeted with cheers. Remembering that the Municipal Art Society has been a huge supporter of the current Brooklyn Bridge Park regime that is working as hard as it can to make sure luxury condos come to Brooklyn Bridge Park, perhaps it will be wise to remember this when voting for the next mayor.