International cold-storage company Americold has abandoned a plan to build a massive refrigerated warehouse on the Portland waterfront.

The decision dampens immediate hopes for waterfront cold storage, which has been touted as an economic game-changer for Maine’s growing food and beverage industries. Even so, state and city officials say a refrigerated warehouse will eventually be built on the state-owned land.

Atlanta-based Americold Realty Trust, the world’s largest temperature-controlled warehouse owner, was selected in 2015 to build and operate a facility on state-owned land next to the International Marine Terminal. Those plans never materialized, even after a lengthy public process to amend the zoning area around the construction site so Americold could build a nearly 70-foot-tall warehouse. The estimated cost of the project was $30 million, plus another $5 million to $6 million to stabilize the loose, muddy soil at the construction area to support the massive building.

On Monday, the company announced it has dropped its plan.

“After three years of careful study, Americold has decided to forgo development of a new facility at the 40 West Commercial Street site along the Fore River in Portland,” the company said in a written statement. “We have considered the regional economics, construction costs, and industry analysis, and our conclusion is that the cost to operate a state-of-the-art temperature-controlled facility on the 6.6-acre parcel of land at the waterfront does not meet Americold’s underwriting criteria. Consequently, we will not be building a new facility at the port.”

Jonathan Nass, Maine’s deputy transportation commissioner, put Americold’s decision in a positive light in an interview Monday. Americold’s withdrawal will allow the state to design a warehouse specific to the needs of the container terminal, local companies and Icelandic shipping company Eimskip, Nass said.

“I think this decision is good news. It allows us to be more flexible,” Nass said. “We have spent time waiting on other entities. Now we are pursuing this full steam ahead.”

The state will take ownership of the project and likely move forward in partnership with private companies to fund, construct and operate a warehouse, Nass said. Americold builds on a specific template, and without those constraints the state can adjust the building to meet its needs, he added.

There is no formal proposal, but public funding is available and he is “utterly confident” the port will get cold storage capacity, Nass said.

“In many ways it is refreshing to have some level of control back and be able to drive this forward,” he said.

Eimskip has boosted container traffic through Portland since it moved to the city in 2013, but says it needs waterfront cold storage to make long-term business in Maine viable.

“We are very cognizant that is what they need in a port,” Nass said.

An Eimskip official did not respond to requests for an interview Monday.

Greg Mitchell, Portland’s director of economic development, said he is “disappointed” Americold dropped the project, but doesn’t believe it is a “death knell” for cold storage.

“I am confident that the growth in shipping activity demonstrates the need for cold storage and another company will agree with the market assessment and will be able to realize private-sector investment to support an active port,” Mitchell said.

The volume and value – $502.7 million last year – of containers coming through Portland has more than doubled since 2013, and Eimskip stops at the port weekly. Maine has invested heavily to improve the port, including a $15.5 million plan to double capacity with a new crane and buildings, and extension of piers, rails and container space.

“This is a long-term endeavor, we have been talking about a cold storage project for the entire time I’ve been with the city,” said Mitchell, who has a 10-year tenure at city hall.

“It has always been in our vision for an active port to include this kind of investment, and it still is,” he said.

Americold was one of two companies that bid on the cold storage project in 2015, agreeing to build on land leased from the state.

The company’s request to raise building height limits triggered opposition from West End residents concerned the proposed warehouse would block waterfront views from their neighborhood, increase truck traffic and create an eyesore on Commercial Street.

Some questioned whether the scale of the building was necessary for Eimskip and local businesses, or whether Americold planned to close its Read Street warehouse and shift operations to the waterfront.

In its statement Monday, Americold said it would continue to operate the Read Street building.

The city’s economic development department spent almost a year on a public process to amend the port zone to allow Americold and other companies to construct larger buildings.

Zoning changes, including elements aimed at making the project more palatable to neighbors, were approved by the City Council in September 2017.

Even with zoning approval, Americold never submitted building plans to the city’s planning department.

Construction of any building on the site will be complicated by unstable soil. The proposed building site stands on 30 feet of topsoil and mud, on top of marine clay 70 feet deep in places, according to an April geotechnical report from the Woodard & Curran engineering firm. Stabilizing the foundation would require driving pilings into the construction site, adding up to $6.3 million to the cost of construction, the report concluded.

Nass said Monday the state has enough money to pay for additional costs and that the conditions are not unusual in waterfront construction.

“Building on this type of soil is something we do all the time,” he said.

Americold did not respond to an email asking whether the rezoning process, soil conditions or its reformation as a publicly traded company early this year contributed to its decision not to build in Portland.

Advocates for a temperature-controlled warehouse on the waterfront have said such a facility would be a boon for Portland and Maine’s growing food and beverage economy.

The economic impact of a cold-storage warehouse like that proposed by Americold could have a potential statewide economic impact of $500 million to $900 million, according to a 2017 University of Southern Maine analysis.

Cold storage has been on the wish-list for the state’s lobster industry for a long time, said Annie Tselikis, executive director of the Maine Lobster Dealer’s Association.

Bait dealers and processors have to hold product in the Boston area because they don’t have local refrigerated space, adding time and expense to their business, Tselikis said. Aside from lobster, it would be a strategic asset for the region’s seafood, agriculture and food-production businesses.

“Obviously, having that infrastructure in Portland is really important to us,” she said.

Peter McGuire can be contacted at 791-6325 or at:

pmcguire@pressherald.com

Twitter: PeteL_McGuire

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