Port of Galveston officials are nearing an agreement with Royal Caribbean to build a third cruise terminal at the Port of Galveston that could cost $85 million and bring the world’s largest passenger ship to the island in 2020.
“We’re working toward a really good agreement,” said Ted O’Rourke, chairman of the port’s governing board. “It’s a great opportunity if we are able to put it together.”
Port Director Rodger Rees in March announced that Royal Caribbean wanted to bring an Oasis-class ship to the island, but that doing so would require a new cruise terminal.
The port already is home to two cruise terminals at piers 25 and 27, but the size of the Oasis-class ships requires additional support, officials said.
Royal Caribbean’s Oasis-class ships, of which there are four with more planned, are more than 1,180 feet long and capable of carrying more than 6,200 passengers.
Officials are discussing putting the third cruise terminal at Pier 10, next to the Wallenius Wilhelmsen Logistics and BMW vehicle processing plant, Rees said.
“Right now, the talk is about having Royal Caribbean come in and build the terminal themselves, then we’d have them lease the land from the port, sharing in revenues with them. We’d control the parking aspect of it,” Rees said.
Royal Caribbean officials did not respond to a request for comment by deadline Friday.
The proposed facility would have to be about 155,000 square feet, port officials said.
The BMW facility would not have to move under current plans, Rees said.
The benefit of having Royal Caribbean build the cruise terminal would be that the port wouldn’t have to take on substantial debt and would, instead, be able to focus on its substantial infrastructure needs, Rees said.
Ever since the Carnival Celebration made its first voyage from the island in September 2000, the port has come to depend more and more on the cruise business for revenues.
The port depends heavily on revenues from cruise ships. Port officials anticipate about 55 percent of revenue budgeted for 2018 will be cruise related.
Port officials are projecting operating revenues of about $37.4 million in 2018 against operating expenditures of $37.2 million, according to documents.
“This doesn’t use up our borrowing power to build a new terminal,” Rees said.
Addressing dilapidated facilities at the island’s public docks could cost as much as $250 million, a problem exacerbated by the fact the port is projected to bring in only about $250,000 in net income in 2018, port officials said.
For a third cruise terminal to be ready to host an Oasis-class ship in the fall of 2020, officials will need a project planned and designed by about November, Rees said in a previous interview with The Daily News.
There is not yet a final agreement with Royal Caribbean, and all details of the proposed third cruise terminal could still change, Rees said.
The Wharves Board of Trustees must approve whatever agreement is eventually reached with the cruise line, Trustee Elizabeth Beeton said.
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 port is home to three year-round Carnival Cruise Line ships, one year-round Royal Caribbean ship, one seasonal Royal Caribbean ship and a seasonal Disney Cruise Lines ship.
The Carnival Vista, the cruise line’s newest and biggest ship, will arrive at Galveston’s docks Sept. 23.