Both finalists vying to become the next Port of Galveston director said the city-owned docks are full of potential for both the cruise and cargo business.
“There’s a huge opportunity to grow the cruise and the cargo business,” said Rodger Rees, the current chief financial officer at Port Canaveral. “Galveston is a natural port with a lot of things going for it. All it will take is marketing and good fiscal management.”
Kristine Zortman, vice president of neighborhood investment for Civic San Diego, agreed with her fellow finalist, saying the port was filled with potential.
Civic San Diego is a city-owned nonprofit organization focused on public-private partnerships and economic development projects.
“It just has to get out of the shadow of some of the competing ports and establish its own brand,” Zortman said.
Rees and Zortman earlier this week were named the two finalists for the port director position left open when Michael Mierzwa retired last year.
Rees oversaw Port Canaveral as it improved its bond rating without collecting taxes, managed several major financing deals, managed the fiscal aspects of a $100 million budget and rewrote the tariff schedule for the world’s second-largest cruise port, according to his application.
“With a population center so close in Houston, the port should be able to really increase passenger flow to cruise ships,” Rees said. “That will also increase parking revenues and those kinds of things.”
The port depends heavily on revenues from cruise ships. The budget for the 2017 fiscal year anticipates about 62 percent of the port’s $38.6 million in revenues will be cruise-related.
The Port of Galveston ranks as the fourth-busiest cruise port in the United States.
“Maintaining that and continuing to grow that is important,” Zortman said. “But there may be opportunities for the port to get more diversification in its business to be able to handle market and economic changes with cruises and other things.”
The Port of Galveston is a landlord port, which generates much of its income from lease agreements with maritime tenants and fees related to ship calls. The publicly owned port is a utility of the city.
Having a master plan will enable the port to capitalize on its tenant leases and figure out a plan moving forward, Rees said.
The Wharves Board of Trustees, which governs the port, on Sept. 11 approved hiring John Manlove of John Manlove Marketing & Communications for about $10,300 to create a strategic plan for the port, the first of its kind since 1998, interim Port Director Peter Simons said.
Rees cited his experience as the CFO as particularly beneficial moving forward.
“The cruise business is a low-cost business and generates good revenues,” Rees said. “But another key is the bond rating. If we are going to go out to the marketplace and get the capital to build up the port, we have to work on that bond rating.”
Zortman, meanwhile, envisioned the Port of Galveston as a destination unto itself, separating from the traditional Houston market.
“Holistically, you have to look at opportunities to build on Galveston history,” Zortman said. “How can you re-brand yourself to more international markets so you can continue to maintain and attract cruise opportunities? I also want to see what other types of opportunities might be available in the international market.”
Zortman has negotiated several large lease agreements with Dole Fresh Fruit and Pasha Automotive Services, according to her application. Zortman also increased cruise calls at the Port of San Diego by 40 percent during her first year, according to her application.
Zortman worked as the principal of commercial assets for the Port of San Diego from 2008 to 2016, but worked for several different asset and land acquisition companies before that, according to her application.
“Absolutely,” Zortman said when asked if her real estate background could come in handy.
Real estate knowledge will be important when it comes to evaluating the port’s leases and tenants, including a spot at Pier 19 previously occupied by Joe’s Crab Shack, Zortman said.
The wharves board culled the list down to two finalists after nearly 30 people applied for the position, including high-ranking maritime officials, City Marshal Michael Gray and longtime port employee John G. Peterlin III.
The search for a permanent director to lead the port, which generates about $38.6 million in revenues yearly and has 102 full-time employees, has been the focus of much discussion since Mierzwa’s retirement.