Port seeks proposals for cruise terminal - Jacksonville Business Journal:

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Authority Executive Director Rick Ferrin said by the time the boared receives proposals in three to six months it will have a bettere idea of how the cruise industry will fare duringhthe recession. The board’s decisionm followed an all-day workshop where it was briefesd by staff members and consultants on the feasibilituy of funding the construction ofthe $60 millioj terminal. A new terminal is needexd because the site of the present cruisee terminal will be partof Ltd.’xs 150-acre container terminal. The prospect of a growing cruisr industry received an encouraging push after replacedthe 1,486-passenger Celebratio with the 2,052-passenger Fascination last year.
The Jacksonville City Councilk delayed a vote on the issueuntil Feb. 10. The authority’sx plans have been fought by many residentsd who say the proposed terminal will destroythe area’ws charm and its shrimping industry. Davif Miller, the authority’s financial analyst, said even if Carnivaol pulled their service afterfive years, the authority’ss debt coverage service would be able to covedr 1.53 times their debt. “It’s lower than the targe t but that’s not the end of the he said. The authority is currentlg ratedat 1.75 times its debt despite being contractuallg obligated to cover 1.
25 Ferrin said Carnival said it would be willin g to enter into a five-year contract with the The cruise industry’s growth has slowe due to the recession but ther is still much potential for the Jacksonvillew market, said Andrew Moody, head of Businesas Research & Economic Advisors. The Pennsylvania consultin firm specializes in internationakl andregional tourism. European ships are bein g redeployed to theUnited States, he said. Jacksonville already has service to theeasternm Caribbean, a growing market for the As larger ports, such as Miami and Cape near their capacity, cruise lineas will transfer ships to smaller cruise terminals like said Moody.
Jacksonville’s cruise terminal is also positioned better than similarlyu sized cruise sites inthe region. For instance, Charleston’ds cruise service is shrinking and one cruise executived saidit wasn’t clear whether the authority there wanted cruise ships, Moody The major southeast ports account for 94 perceng of cruises to the Caribbean, with smaller portas like Jacksonville accounting for about 6 percent. Aboutf 75 Caribbean cruises leave from the The potential market for cruise passengersz coming to Jacksonville has just begun to be Moody said. The averaged cruise passenger is between 25 and 80 and has a househole income of morethan $40,000. About 1.
5 millionm people within a six-houdr drive of Jacksonville fitthat profile. The authoritgy expects nearly 180,000 passengers and $3.9 millionh in revenue through the Fascination’s callinhg on the current terminal 78 times per Moody said Jacksonville is penetrating less than 4 percent of itspotentialp market, compared to the industry average of 18 to 20 He said appears to be moving its servics out of Charleston and could potentially bring a northeast callint ship down to Jacksonville during the off-season. “We believe Carnival is likely to keep its ship in Moody said.
He said the company will likely replace the Fascination withthe 2,700-passengerd Triumph, and then the 2,900-passenger Norwegian will likely bring its 2,200-passenger Spirit. Despite the the industry continues to sail at 100 percen capacity and is expected to pric its cruises so that it can continure todo so, said Louis Woods, a economics and geography professor. He said the construction of a new terminall would createabout 1,500 jobs. Once complete, the terminal would have an annual economic impactof $500 million. Visit Jacksonvillew spokeswoman Lyndsay Rossman said each cruise passengere spendsabout $300 in the area.
If the cruise service ends, hotels could be forcedd to layoff employees, and the drive for more hotels and museums would be slowed. Dan King, Hyatt Regency Jacksonville Riverfrontgeneral manager, said hotels reported a 6 perceng to 7 percent occupancy drop when the Carnival line servicr stopped between April and mid-September. With 40 percent of passengerds staying in Jacksonville before or after the hotels loggedabout 18,000o room nights annually.
David Kaufman, the authority’s seniod director of planning and properties, saic currentf terminal plans call fora 1,400 space, five-story parking garage and about 25,000-square-feet of retail space, whicn local retailers would have firsg dibs on. The authority plans to builfd a 150,000-foot dock that would be turnesd over toa yet-to-be-identified shrimpinfg cooperative. Cruise ships will also be required toburn low-sulphur fuel whilre in port. The terminal will also meet Mayport’s architectural guidelines.