From: Great Circle Shipping - Tom Sent: Friday, April 26, 2013 5:34 PM To: 'Bill Reynolds' Cc:

P.C. Wu; Sherri Myers; Larry B. Johnson; Brian Spencer; Megan Pratt; Andy Terhaar; Gerald Wingate; Charles Bare; Jewel Cannada-Wynn; Jim Hizer; Scott Luth; Danita Andrews (dandrews@pensacolachamber.com); Ashton Hayward Subject: RE: PORT IMPACT HUGE IN BAY COUNTY

Mr. Reynolds - good afternoon Thank you for taking the time to reply to my email earlier this week. I will agree with you that recently the tone of the mayors office and of council, has been one of a positive nature. Albeit, mostly towards the subsea base type of business that has been promoted by Offshore Inland. A recap of how this business is panning out based on the projections would be good to review. Also please know that subsea base is a fancy play on words that just means top side repair facility, ie, shipyard type of work. So instead of moving cargo, you now have a shipyard downtown. Moving cargo will provide more jobs overall, by tying in our industrial parks with more manufacturing. And YES, the mayor has worked hard to get several million dollars of much needed funding for port improvements and modifications, as well as increasing the ports marketing budget by about double what it was before he took office. All good i agree but no effort is being made to gain more cargo throughput. Therefore, to the local shipping community, it all seems superficial. You see, the subsea base business is not going to produce jobs for the stevedore or the laborers they hire, nor any jobs for the railroads, and not many for the truckers, or cargo surveyors, nor the barge lines, and it isnt going to do much good for your empty industrial parks in the region. We NEED to be moving cargo, IN AND OUT, as frequently as we can. (some subsea business is good, but not the entire port facility). As you stated, since you are relatively new to the area, and since you asked, here is a short recap of the business that has been turned away by either council or the mayors office, in the last four or five years (more or less) and this is only the business that we (PPUA) are aware of: Prior to mayor hayward: 300,000 500,000mt per year bulk limestone acct rinker declined by council 500,000mt per year bulk woodchips declined by council Multiple other cargoes / deals declined pate stevedore would know some of them With mayor hayward: 100,000mt per year bulk salt mutli year deal declined by mayors office Martin Marietta lease not renewed Halcorp lease was only month to month, so they couldnt plan long term, so they shut down and moved out Continuous push to multi use on northern end of port Continuous push for retail / hotel / restaurant complex on commendencia slip property

Continuous push to make warehouse 4 into some kind of museum or something stupid like that No direction or support whatsoever for the port staff as to what to do More money for marketing than before but still not enough (and still no direction) The port director nor his staff have any authority whatsoever to negotiate and conclude a deal without approval from the mayor or council and this is ridiculous. They are professionals and were hired to run a port and they should be allowed to do it - or even better, encouraged to do it. The tone of the port environment is NEGATIVE. Anytime anyone in the shipping community proposes a possible new deal or cargo, the immediate initial reaction is not positive. When i call any other port in this country with potential new business, they are asking questions, proposing ideas and solutions and alternatives and trying to figure out what they can do to bring that business to their port. NOT HERE. And this just isnt my perception or experience we can give you others to call both locally and outside of our area that experience the same thing. In a positive, proactive environment, our port would be Pushing for deeper channel Pushing for more cargo Developing a plan to go after manufacturing that would utilize the port both in and out The port director and his staff would have wide authority to negotiate and conclude deals Publicly stating that the city is in the port business and is seeking cargo opportunities Promoting the positive aspects of this tremendous asset rather than always projecting it as a hindrance or eyesore Reaching out to the shipping community on a regular basis to find out what direction to go in I have asked the mayor to sit with me on multiple occasions and since he has been in office we have only got together maybe 3 times. Thats equal to once a year. I realize hes a very busy man and so am i. The mayor knows me and knows my background (35 years in shipping with the last 26 years booking cargoes on ships and barges and of that, 16 years running this company). I, and others in our shipping community, with a cumulative shipping experience of hundreds of years, have offered on numerous occasions to provide FREE consulting and NOBODY, - not the mayor, nor his committees, not the council and not you, have sought our professional advice. It doesnt seem to us that the port is a priority to our city leaders. Further, the mayor did NOT appoint anyone who knew anything about the shipping business to his port advisory committee. Hmmmmm. Also, he did NOT appoint anyone in the shipping community to provide input to his downtown urban redevelopment advisory committee (and with the port smack dab in the middle of everything, dont you think he should have???). Right before Mayor Hayward was elected, we had a FIRM and DETAILED plan, to organize an independent Board of directors for the port. This is how it was 40 years ago - and it was an effort to once again take city council out of the day to day running of the port, since no sitting council member had (or has) any shipping experience. When i first proposed this idea to council, the general tone of the council was one of agreement,

and something they could consider. Subsequently just when we were formally bringing it to council for action, they (council) torpedoed us by surprise, explaining that the mayor had just formed his port advisory committee and there was no need to have two committees or boards giving direction regarding the port, to the mayor. Are you aware that the Governor of Florida is pushing HARD for increased trade and transportation and wants to make Florida a HUB for transportation and logistics? Did you know that Pensacola is BARELY on the map and NOT considered a serious port and thus, not much attention or emphasis is being given to our port, in this plan?. Do you realize how centrally Pensacola is located to the fastest growing region of our country and how our port could be a HUGE part of this growth and we could become a MAJOR economic engine because of all this? Dont you know that Escambia county is one of the poorest counties in the state and a thriving seaport could help change that? Here is compelling information that should be discussed at every local economic planning meeting and posted on the nightly news each evening: companies that export grow 15 percent faster, pay 15 percent higher wages and are 12 percent more profitable compared to those that do not export.

Trade, logistics, and distribution industries employed 531,000 Floridians in 2009, with an average wage nearly 30 percent higher than the average for all industries in the state.

Florida is at the crossroads of growth in north-south and east-west trade lanes with access to more than 1.1 billion consumers in the Western Hemisphere by 2035. every $1 in state funds spent for seaports results in $6.90 in economic benefits to the State (yes sir, almost a 700 pct return!)

are you aware of the following Job multipliers? Transportation and logistics: Manufacturing: Natural resources and energy: 1.8 Retail: Leisure & hospitality: 0.5 0.4 2.3 2.2

Notice which industries provide the most indirect jobs this is where our regions focus should be to provide stable, quality, high paying employment that will create a solid and dynamic economy. Tourism is FANTASTIC and the state of Florida is good at it but diversity is where we need to go now to protect us from a fragile economy. -----

I hope the above has provided you with some clarity, at least from the local shipping community side of the table. I have proposed this before and i will propose it again lets put together a round table group of the mayor, you, the port director, city council president, a few local shipping professionals, another local business person or two, a chamber executive, and perhaps a county commissioner or two or three from the surrounding counties, and meet once a month or once every two months or once a quarter and figure out what is needed to get this port maximized to its fullest potential, if the city indeed wants to have a port. (alternatively, a separate BOD as described above that meets regularly with the mayor, you and city council president). And sorry for the dissertation Mr. Reynolds... but you DID give me an open door. Standing by... Best Regards, Tom McCulley Co-Chair, PPUA And President, Great Circle Shipping Corporation 3 West Garden Street, Suite 332 Pensacola, FL 32502 USA T: 1.850.429.0510 F: 1.850.429.0520 C: 1.850.232.1357 E: calm@greatcircleship.com W: www.greatcircleship.com