Royal Caribbean terminal rendering

A Port of Galveston rendering shows a proposed design for the $100 million cruise terminal at Pier 10.. The wharves board has agreed to give Royal Caribbean another year to commit to the project.

GALVESTON

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.

John Wayne Ferguson: 409-683-5226; john.ferguson@galvnews.com or on Twitter @johnwferguson.

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(2) comments

Miceal O'Laochdha

The Wharves Board would do well to turn away from the desperate delusions of its Port Director (“The last thing they intend to do is not build this terminal here,” Rees said.) and recognize that the entire international cruise ship industry is at the beginning of a massive sea change it has not experienced since the days of the great American and European passenger liners (and their shoreside terminals). Those ships were erased from the seas and ports by the advent of passenger air travel, in a short 10-year period in the '50's and early 60's. The rebirth of passenger ships, flying flags of convenience and catering to a new cruise vacation model, represented a whole new paradigm for the industry which was at its apex when the corona virus brought them to a screeching halt. Even when the current shutdown is over, people will be slow to trust their health safety on these ships and, perhaps more importantly, the incredible number of people who have lost their jobs will be a long time before they again have the disposable income to spend it on a cruise vacation. The cruise ship industry is in for a massive downturn as big as the blow they suffered from passenger airliners; it can easily be a couple of decades (just as in the 1960's to 1980's) before they begin to recover. During that time, many existing ships will go to the scrap yards of India, Taiwan, and Turkey and no millions of dollars for magnificent new terminals for non-existent passengers will be squandered by the shrinking and evaporating cruise companies. Forget the $100 million new passenger terminal at Pier 10. Thanks to the virus, that dream is over and the sooner the POG realizes that and starts getting commercial cargo contracts back, the greater the chance that Galveston's port will not go down with the cruise ships they have foolishly bet all their chips on. History does repeat itself and only fools think the history of passenger ships began when Carnival acquired their first “fun ship”.

Wayne D Holt

[thumbup][thumbup][thumbup] That is the long and the short of it, Miceal. I keep wondering if Mr. Rees is offering these threadbare encouragements because he really believes them or it's just for public consumption in the hopes time will dim memories.

You know, it might be just a trick of the semantic contortions of that phrase but one could read a much darker turn to the line, "The last thing they intend to do is not build this terminal here." As in, after waiting an additional year for an approval from Royal Caribbean, terminating this terminal will be the last we ever hear of it.

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