In this special interview our John Kelley sat down with Wes Hoskins to discuss his position in relation to the Port of Corpus Christi.
Mr. Hoskins serves as San Patricio County Port Commissioner and as CEO/President of 1st Community Bank. This interview took place on April 1, 2021.
Kelley: On March 23 there was a special meeting of the port of Corpus Christi commission to pass a resolution against San Patricio’s proposed legislation to have one port commission position removed from Nueces County and given to San Patricio County (SPC). You and David Engel both opposed that measure and you went on to make some critical comments of the actions of management.
Today I’m going to ask you to expound on that, especially role of the Port Commission in this proposed legislation.
Hoskins: Relations between San Pat County and the Port have been strained. The resolution just throws gas on the fire. The Port as a public entity should not be involved in this decision involving our parent entities. This should be resolved between the counties without Port interference.
The most disturbing thing is we passed the resolution March 23rd. I have no proof of this but in having a discussion with my friends in Austin, it looks like our lobbying group, ($1.4 million this year) was unleashed against San Pat Co. weeks ago. Who had the authority to unleash that is the question without the resolution. Who authorized it Sean (Sean Strawbridge, CEO), Charlie (Zahn, Commission Chairman), I don’t know.
Kelley: Should the Port be lobbying against the shareholders? We should be agnostic on this issue.
Hoskins: I need to look out for the whole region I’m San Pat’s representative but also we have to look at the whole region. I’m CEO of a bank that stretches from Kingsville to Victoria. The Port’s success or failure will affect all of our businesses. I’m very concerned about the direction we were going. We got a fight going with everybody.
Houston has a Port, they are a competitor, they have more people, more representatives and are better organized. I think in Austin, in Washington DC they look down here and see a textbook school yard fight going on and they say when they get it worked out we’ll do something. We are the weak sister to begin with but are underrepresented, because we don’t have the population. We have to be united at the state and federal level and we’re not. We’re fighting each other. When they get finished fighting and grow up they will talk to us.
There are serious issues with the communications at the Port. We’re not getting everyone in the canoe, management is saying “this is what we’re going to do with or without your support.” Prior administrations got everybody involved and in the boat before they started paddling up the river. Unfortunately the Port has become a bully to do what they want whether not the public wants to.
Kelley: You mentioned several conflicts and unresolved issues including Ingleside by the Bay and the Indian Point Pier at Portland as issues. Could you tell us more about that?
Hoskins: Indian Point Pier sets on submerged land owned by the Port. They leased it for 30 years to Portland and now the lease is up. The Port doesn’t need the land and could simply renew the lease and let it go. I call it a blackmail clause.
The Port inserted a clause into the new contract that Portland must agree to support any Port development or risk default or financial penalties. They put similar clauses in the agreement with Port A over their Marina lease, contributions to the Chamber of Commerce and EDC’s of both counties.
Kelley: Why is San Patricio County asking for another Port Commissioner?
Hoskins: I don’t have exact numbers yet, I’ll have figures in a couple of weeks, but it looks like San Patricio County and La Quinta Channel is going to yield half of the money coming into the Port, their largest customer is already in San Pat County, Moda, plus we have lots of expansion OxyChem, Cheniere, all in San Pat County. Their argument that 70% of the land is in Nueces County is misleading because they are counting submerged land.
Almost every meeting we have land acquisition in San Pat Co. And there isn’t a deal on the table or a customer in the wings. They have $60 million dollars for land acquisition this year. I want to plan for that. I urged them to talk to the communities, they don’t want to read about it in the newspaper. We need to talk to people.
Kelley: At the City meeting the Port said it’s plan is just to acquire more and more land and not to sell land not suitable for Port use, I found that position disturbing. You mentioned Voestalpine has a pollution problem that is not getting resolved.
Hoskins: We lease them land and I think we should take a heavier hand. They promised to do things to fix the problem they haven’t done. A friend of mine had to have his house repainted, his yard furniture was ruined, black dust everywhere. Voestalpine’s response was “iron dust doesn’t hurt anything.” In Texas we don’t care, we don’t want it on our property.
I’m for industry, but industry has to be responsible. EXXON has done a really good job and worked with the neighbors. I know some people are upset that it’s there. I have a friend that lives out there and he probably isn’t happy to have a giant plant in his yard but they kept him informed and communicated. We must maintain air and water quality and the quality of life.
Kelley: You said Ingleside by the Bay also has unresolved problems.
Hoskins: Larger ships are creating wakes that cause large wakes when they make a corner. You’re damned if you do and damned if you don’t. You have to go a certain speed to get the rudder to work and when they do that it creates a wake that goes up in people’s yards and erodes their beaches. The Port has done some engineering studies on how to build a breakwater, but it just lingers on. It’s time to do something.
Kelley: It seems the Port is always trying to expand without taking care of the consequences?
Hoskins: If it glitters, it’s gold.
Kelley: Want to discuss Harbor Island?
Hoskins: We’ve spent millions on Harbor Island and we don’t have a customer. I vote against Harbor Island because I think the Port needs to diversify. We have a lot of export facilities over there. It’s like putting a fifth gas station at four corners and Phillips 66 is looking at an offshore facility.
We are able to handle the current and projected capacity with no problem. I don’t want all our eggs in one basket. We should look at something else to do with Harbor Island, not carbon related. I feel like that oil and gas will be around for my lifetime, maybe for two or three decades. But putting all our eggs in one basket is not a smart thing to do.
Kelley: What about desal on Harbor Island?
Hoskins: Why we can’t get everybody in one room on desal and decide which one permit to support is a mystery to me. Harbor Island desal with intake and discharge offshore is probably a solution that needs to be looked at but it is probably cost prohibitive. Industry has already decided to use the City of Corpus Christi, that’s why they pay that extra $.25 for water development. It appears to me that the Port doesn’t have anywhere to sell water so that’s why I call it a bridge to nowhere. I can’t support desal unless we have a partner to buy the water.
Kelley: You mentioned the port as an entity may start levying taxes.
Hoskins: I may have thrown a bomb there, but I’m trying to make a point. The Port has a healthy balance sheet with a lot of bonding capacity and money in the bank, but we’re spending lots of money, big chunks of money. The reason I said that is we need to be fiscally responsible with what you’re doing. If we continue to spend tens of millions of dollars and go borrow a bunch of money and then we end up in the active cycle or slow down.
Think of this, exports didn’t happen until we had a president signed the bill and the president can sign a ban on export just as easily. Unlikely, but a change like that can happen overnight. We got a couple hundred million dollars of bonds we have to repay, so we have to be prepared fiscally to deal with that kind of crises. We have to look over the horizon. We need to look down the road fifty years and If we got bunch of old export docks we aren’t using than we got a lot of dollars tied up in infrastructure we can’t use.
Kelley: You talked about the new Port building originally being estimated at $23 million and it has risen to over $43 million, can you talk about that?
Hoskins: FF&E (furniture, fixtures, and equipment) was not included in the original deal. There was a committee for that. Wayne Squires and Dick Bowers and I don’t remember who else was on the committee and stated it wouldn’t be more than $23 million there would not be a fourth floor. If it came in at 25 or 26, I probably wouldn’t have heartburn, but to come in double. So we built the fourth floor and added and added. We can backup now or stop at this point.
I think it is a transparency issue. They’ll say we told you everything on the way, but million here and a million there pretty soon you spend extra 20 million.
Kelley: You stated “Management forgot to tell us that was a shell.”
Hoskins: I think it goes to the 10,000 foot level, look at the commission said 23, everybody thought it was 23 and now are 43.
Kelley: Do you think that was management driven?
Hoskins: Yes. I don’t know if there is a conspiracy.
Kelley: It’s hard to underestimate by $20 million.
Hoskins: Yeah. A conspiracy? Sloppy? I don’t know. It’s going to be a Taj Mahal. It’s going to be a pretty building, it’s going to make a statement, but our job is to manage the waterway we’re, a transportation company. To me you can’t see our highway, it’s underwater, we provide an expressway out there so ships can get and out.
I have a different philosophy than some of the other commissioners. We have this fund, we have for donations to local charities, we can give up to 5% of our gross income, we give 3%. This development proposal would allow us to build other things which are not Port related, not water related.
Some commissioners think it is best to collect these tariffs, and we have about a $40 million profit and redistribute it to things in the community and that’s a valid consideration. I think that we are to better off with the lowest tariff for the best service on the Gulf Coast, that would attract business. Talking to industry, they just want their product in and out of here safely and efficiently. I feel like let’s be the lowest cost service for our customers and they will invest in jobs here.
The bill being proposed by Nueces County would allow us to invest in other things. There’s two ways of looking at jobs, one is we make the best service at the best price, the second is to take this pot of money and invest in hotels and motels and maybe even the courthouse and hopefully produce jobs that way. Focusing cost efficient service will bring us more jobs. I think that is different from what Sean wants. We already make big contributions to the City like supporting the Harbor Bridge project.
Kelley: You mentioned the Port was spending huge amounts of money lobbying for the Nueces County legislation.
Hoskins: Can’t prove it, but my gut tells me we are spending a whole lot of lobbying money on that bill. Transparency is the issue. I don’t know where we’re headed. I wish I knew exactly what we’re talking about as far spending money with the Nueces County bill, I don’t. Nobody’s ever told me.
We have to work together. I think it’s important that we stop bickering and be transparent to advance our region. A rising tide floats all boats we have to have a united voice to Austin and Washington DC and we all need to work together.
We need to focus our attention on the dredging to get that extra width and depth. The past commissioners were visionary, to take the channel to 45 feet. The barges are more numerous, the ships are bigger. We have customers in the inner harbor that could benefit now.
There will probably be some stimulus dollars headed out way. Every port is scrambling for dollars for their channel including Houston, that’s extremely important from a safety standpoint and important from a competition standpoint to widen and deepen the channel.
Houston has problems already because large container ships make one-way traffic on a very long channel. They’ve got a request for widening and deepening their channel in the billions. That’s what worries me about going to Austin and Washington and not being united. You’re seeing more and bigger vessels on high seas who want to be the port they want to come to.
*Portions of this interview were edited for brevity and con text