Toyota currently leases around 104 acres; 65 acres down by the river for parking cars and another 40 acres about a mile up a hill behind Terminal 4 that holds aging metal buildings used for processing the cars before shipment to both regional and national dealerships. Toyota and the Port want to consolidate the company's operations onto 95 acres all down by the river, and the port wants to develop and lease to them more than 100,000 sf in several build-to-suit buildings.
"We are in midst of the permitting process, putting a financing package together and doing lease negotiations," says one Port source. "We are anticipating a signed lease as early as late December, but probably more like January," says another, pricing the project at $35.5 million.
There are two main reasons for the new lease and new buildings, according to the port: one, it will significantly reduce the amount of mileage that has to be put on each car before being distributed and, two, the existing facilities are now 26 years old and the new buildings will be much more efficient.
The surrounding riverbank also would see improvements out of the deal. Toyota is said to be going out of its way to improve the environment around its proposed leasehold. The company and the port have been seeking the necessary permits to restore 1,700 feet of riverbank to its natural state, which includes removing a lot of existing dock and riprap.
The preliminary details on the buildings the port proposes to build for Toyota include 75,000-sf building for adding post-production options to vehicles, a 21,378-sf body shop, a 6,000-sf quality assurance building, a 2,500-sf car wash, a fueling station and a guard house.
The port's existing, 20-year-old lease agreement with Toyota brings in $1 million per year. Rates haven't yet been hammered out for the new agreement, but if the port were to recoup 9% of its investment annually, Toyota would be paying closer to $3 million per year in rent. The real numbers will be made public when the agreement is signed.
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