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PortMiami renegotiates terminal deals, local workers brace for more cruise-less months

Taylor Dolven, Miami Heral on

Published in Business News

The situation at Port Everglades is less dire. Impact from its passenger cruise operations is only $2 billion, resulting in $60 million in revenue for Broward county in fiscal year 2019. The county's cruise-focused infrastructure projects are far more modest and depend far less on cruise-line contributions.

Kuryla was hoping cruising would be back at the end of July. Now Miami is facing its first cruise-less summer since the industry started in the 1960s.

"Many people were not even aware of what a pandemic was," he said. "No one ever imagined something like this."

So far, the county has spent about $260 million on the PortMiami cruise terminal projects, or around one-third of the total county sum owed, and the companies have paid back $60 million, or 1% of the total industry sum owed. Legal teams for the county and the companies have exchanged letters citing force majeure, or unforeseen circumstances, in order to get some relief from the payment deadlines, Kuryla said.

The deals backed by passenger fees -- Norwegian Cruise Line, Carnival Corporation and Virgin Voyages terminals -- require the companies to pay the shortfall between the passenger fees promised and the passenger fees realized by the end of September, a sum Kuryla estimates to be $30 million for 1.6 million passengers. Royal Caribbean Cruises has paid rent on its existing office and terminal through March, and is still negotiating with county over April and May, Kuryla said. Royal Caribbean Cruises and MSC Cruises do not owe the county rent for their new office and office/terminal, respectively, until the projects are finished.

The Norwegian Cruise Line terminal will be finished this month, Kuryla said, two months behind schedule. The Virgin terminal will remain on its planned timeline to finish before the arrival of the company's second ship in November 2021. Timelines for the other pending projects are being re-negotiated, Kuryla said.

 

"Whatever we end up doing, however we end up modifying these deals, there will be a win-win, a win for the port and a win for the line," he said.

The CDC has not yet begun to work on a plan to reopen cruising, as cruise ships continue to experience COVID-19 outbreaks among crew.

The economic pain caused by the shut down is a grim reminder of Miami-Dade's ongoing dependence on tourism. While efforts to diversity the economy continue, tourism still is the third largest industry in Miami-Dade following health care and social assistance and retail trade, and provides the lowest median annual salary -- $21,500. Ned Murray, associate director of Florida International University's Jorge M. Perez Metropolitan Center, said focus on other industries could make Miami more resilient when the next crisis comes.

"Miami-Dade and quite frankly South Florida and Florida in general need to create more resilient economies that are less susceptible to these economic shocks," he said. "It's not just the recession in 2008, but everything hits us harder than other economies throughout the U.S. We can't continue going through this every economic cycle and every catastrophe ... We have to get serious."

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