250 Million Port Of Miami Revamp Would Berth Largest Cruise Liners
By Zachary S. Fagenson
A Port of Miami master plan still under wraps includes a quarter-billion-dollar cruise facility upgrade that should allow two Oasis of the Seas-size ships to dock at a time.
The plan "includes the construction of a multi-terminal — a single terminal that can accommodate more than one cruise vessel," said Kevin Lynskey, port director of business initiatives.
Officials would unveil little more of the plan.
The cruise upgrade alone would run about $250 million, Port Director Bill Johnson told the Greater Miami Chamber of Commerce this month.
The Oasis of the Seas, Royal Caribbean’s newest liner, cruised into its home, Port Everglades, on a tidal wave of press and fanfare late in 2009. At 220,000 gross registered tons, more than five times the size of the Titanic, and able to carry up to 5,400 passengers, it’s seen as the next generation of cruise ships.
"It’s our belief that we will not begin constructing those terminals for four or five years," Mr. Lynskey said Monday. "The good news in the plan is that we do have available footprint on port, and we can expand with the industry for the next 15 to 20 years."
The Caribbean cruise market, he added, is expected grow about yearly for the next 10 years. In 2010, some 4.33 million passengers used the port, counting each departure and return separately.
That growth, however, might not follow a smooth curve.
"The industry has been more interested in having a greater flexibility when they bring their cruise passengers from year to year," Mr. Lynskey said. "Most of the agreements you see will have minimum annual throughput.
"The industry wants to be able to bring fewer or more in any particular year," he added.
Financing for the project is unclear. The port has a bit more than $490 million debt, on which it pays about $32.5 million a year. Revenues recently have averaged $110 million to $115 million.
The debt ratio — funded debt compared to the sum of its assets and net working capital — is among the highest of ports nationwide, Mr. Johnson and Mr. Lynskey said.
To fund expansion, the port may have to look beyond traditional debt, used to fund such projects as the $1 billion twin tunnels due to connect Dodge Island to main highways.
"Almost always with cruise terminal development since the late 1990s the terminals are constructed for a particular cruise line who makes a minimum pledge of passengers or revenues," Mr. Lynskey said, "so the terminals tend to be self financing through these long-term agreements."
Bonding has "been the traditional model, but next time we explore the construction of new cruise terminal, we are going to be open to a different arrangement," he added.
One possibility is a public-private partnership.
Meanwhile, putting the plan into action requires the OK of county leaders, but when that might come with the mayor’s chair vacant is unclear.
"We need to get it passed by the [county commission] by the fall so that it can be included in the comprehensive development master plan schedule," Mr. Lynskey said, but "we’re trying to hold it for the new administration so that they can weigh in on it."
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