The Port Authority of New York and New Jersey said it has given the port’s largest auto processor eight days to pay $2.8 million in rent and fees the agency said date back to the spring of 2011.
The port authority said it told Foreign Auto Preparation Services that the company’s $2.4 million security deposit will be used to cover part of the money. If FAPS doesn’t replenish the security deposit in eight days, the company will be in violation of its lease, the agency said.
FAPS “will consult with legal and financial advisors before responding to the port authority,” Vice President Gary L. Love said in an e-mail. During the last 10 years alone, “FAPS has paid in excess of $167 million in rent, dockage and wharfage fees while creating hundreds of good paying union jobs,” he said. “Any suggestion that FAPS has failed to pay its rent is categorically untrue.
“The financial crisis of 2008 and the Japanese tsunami created a global crisis of unprecedented proportion in the automotive trade. FAPS consistently made rent payments in spite of those developments and in recent months began full payment and a reduction in arrears without resorting to the obvious legal protection of force majeure,” Love said.
The port authority issued a press release saying FAPS “has demonstrated persistent ongoing failure to pay their rent and fees, despite ongoing discussions with Port Authority starting in 2011.”
FAPS has been a tenant at Port Newark since 1956. It operates on 119 acres and serves between nine and thirteen foreign and domestic auto manufacturers, the port authority said.
“For years, FAPS has failed to meet its financial responsibilities as a tenant at our port, and this practice stops today,” said Bill Baroni, the port authority’s deputy executive director. “All of our port tenants, and those at our other transportation facilities, are on notice – either pay your bills or find another place to do business.”
“There is a new way of doing business at the port authority, and this kind of behavior will no longer be tolerated,” said Vice Chairman Scott Rechler. “It is extremely unfair to the dozens of tenants at our airport and port facilities who routinely pay their rent when one tenant runs up millions of dollars in debt to us.”
Port authority officials said they are intensifying their bill-collection efforts. The agency said it “is closely monitoring its other port tenants and is prepared to take action against at least one other tenant who is behind on rent payments.” The tenant was not identified.