County to repay Royal Caribbean for $16 million upgrade at Port of Miami

By Paola Iuspa
   Royal Caribbean Cruises has brokered a deal with Miami-Dade County to do $16 million in improvements on its terminals to make room for a third ship of its largest class.
   The county, which governs and owns the Port of Miami, has agreed to reimburse the cruise line for its costs as work progresses. In return, company officials said, the county's investment should generate $1.4 million in additional annual revenues for the port from dock, wharf and parking fees.
   A 142,000-ton eagle-class ship now under construction is to make Miami its home in November, said Michael Sheehan, company spokesman. To be able to accommodate the 1,019-foot-long Navigator of the Seas, corporate officials asked for permission to expand terminals 3, 4 and 5 used by Royal Caribbean and for reimbursement.
   The expansion will allow the line to dock two eagle-class ships, with 3,114 passengers and a crew of 1,185, in Miami at the same time.
   Currently, its two large ships Voyager of the Seas and Explorer of the Seas sail out of Miami on different days. The new acquisition will share a home berth with one of those ships, Mr. Sheehan said.
   Work is to begin as soon as possible, said Bill Johnson, Miami-Dade assistant county manager. He said the job must be completed by November.
   To accommodate Navigator's ship size and potential number of passengers, Royal Caribbean will also expand a passenger bridge, add 200 feet of dock and a fourth mobile gangway, he said. It will also add a garage for 1,000 cars west of current parking facilities and upgrade security. New traffic lanes also will be built in front of the terminals, Mr. Sheehan said.
   The cruise line will be reimbursed up to $16 million, Mr. Johnson said, under terms similar to those used in 1998 when the port expanded terminals 3, 4 and 5. Then, he said, it was Royal Caribbean that financed the renovations for about $76 million and the county reimbursed the line from port revenues.
   At that time, the cruise line signed an agreement to operate from those terminals for 15 years while bringing the county $160 million in revenues during that term, according to county records.
   Despite the economic slowdown and reduction in tourism, Royal Caribbean is moving ahead with the expansion.
   "It goes without saying that the events of Sept. 11 have had an impact on us," Richard D. Fain, chairman and CEO, said. "However, I am very encouraged by the speed at which bookings for the industry, and our company in particular, are moving toward normalcy. Occupancy for the fourth quarter, which we earlier anticipated would be in the low 90% range, ended up at 96%. January occupancy was 103%, indicating that we have returned to more normal levels."
   This expansion is not related to the port's capital improvement program, which calls for investing $171 million on 33 projects to be completed by 2004, said Trenae Floyd, port public affairs officer. Those are being paid for with port revenues.
   That project includes two new cruise terminals and the remodeling of two, a new cruise entry gate, two garages, and construction of a cargo shed, two wharves and a refrigerated container yard.