A decision about whether to give Royal Caribbean Cruises more time to fully commit to building a third terminal in Galveston will wait another two weeks, the Galveston Wharves Board of Trustees decided Monday.
During a special meeting, the wharves board voted to delay a decision on amending the port’s lease contract with Royal Caribbean that is meant to guarantee the construction of a $100 million terminal at Pier 10.
The company in March asked for an extra year to begin building the terminal because it had put a hold on capital projects during the coronavirus outbreak.
The board voted unanimously to delay its decision on the amendment.
“I just wanted more details about where we’re going in the future,” said Trustee Ted O’Rourke, who made the motion to defer. The board voted after discussing the contract in executive session for more than two hours.
The port and Royal Caribbean agreed to the lease in December after nearly a year of negotiations. The agreement included a 120-day due diligence period during which Royal Caribbean could walk away from the deal, officials said.
The due diligence period was set to end on April 10, beyond which the agreement would be binding.
Royal Caribbean asked the port March 26 to extend the due diligence period by a year because of the coronavirus crisis, which has caused a months-long shutdown of the global cruise industry.
The port agreed to extend the period to April 29, Port Director Rodger Rees said Monday. That gives the wharves board time to make a decision about agreeing to an extension during its April 28 meeting.
Royal Caribbean officials had reiterated their commitment to the Texas project, Rees told trustees Monday.
“The last thing they intend to do is not build this terminal here,” Rees said.
No Royal Caribbean cruises have left the Port of Galveston since March 13, and an order issued by the U.S. Centers for Disease Control and Prevention last week could cancel all cruises in the United States until July 19. The no-sail order could be lifted earlier by order of the CDC or the U.S. Secretary of Health and Human Services.
If all scheduled cruises through July 19 are canceled, the port will have lost at least 108 planned at the beginning of the year. The port has not yet released an estimate of what the lost cruises will mean to its bottom line.
Those estimates, and a final decision on the Royal Caribbean terminal contract, are expected during the board’s April 28 meeting.