'Is it even a business we want to be in?'
Published by Florida Times-Union on May 3, 2005.
Port wants to nourish growing cruise ship industry, but it must find balance with lucrative cargo trade
The board of the Jacksonville Port Authority was just settling in to a discussion of the future of the cruise ship industry in Jacksonville when a more basic question came up.
�Is it going to make any money, or is it going to cost more than it�s worth?� board member Thomas Jones wondered during the meeting last week. �Is it even a business we want to be in?�
The port authority is in what could be considered an enviable position: Its cargo business is growing, with even bigger increases expected if it signs up a Japanese steamship line. At the same time, Carnival Cruise Lines has seen a strong response from passengers, and Jacksonville seems well positioned to capture the growing volume of drive-in cruise ship passengers.
Now, the authority has to figure out how to balance those businesses, helping the more lucrative cargo business grow while finding a permanent place for cruise ships to dock.
"How valuable is the cruise ship industry relative to all the other transportation issues handled by the port?" board chairman Bill Mason said, defining the issue. "How valuable is it to us and to the people of North Florida and its economic development?"
The two businesses differ both in the amount of revenue they generate for the port as well as in their impact on area employment.
In 2003 alone, for example, the cruise industry directly employed 191 workers in Jacksonville, employees who earned a total of $3.8 million, or $25,840 per person, according to the report presented to the board. The cargo side of the business directly employed 4,425 workers earning $206.8 million, or an average of $46,731.
For 2005, the port is expected to make about $28 million in revenue from the cargo business, and about $4 million from the fledging cruise business.
The main question facing the board in balancing the two businesses is where a cruise ship terminal would be located.
The temporary terminal on Dames Point can service only a limited number of ships, because the Dames Point bridge won't accommodate ships more than 175 feet in height.
"We can stay where we are for a period of time, the next three or four years, maybe five," said David Kaufman, the port's senior director of planning and port development. "The ships we can handle are so limited and are getting to the point where lines are looking to phase them out."
As part of a group of consultants who evaluated the markets the port should be in, Han-Padron Associates, a marine engineering company, looked at 14 sites in Jacksonville where it might be possible to locate a cruise ship terminal able to provide for long-term growth.
The consultants eliminated a dozen of the locations it looked at, narrowing the list down to Blount Island, where the port authority now leases land to a range of cargo operations, and Pine Island, a piece of land -- which the port doesn't own -- located in the Timucuan Preserve.
Both sites have generated opposition. Pine Island, which has all but officially been taken off the table, stirred up angry property owners and environmentalists who protested the idea of acres of parking and thousands of passengers in the nature preserve.
Although Blount Island doesn't have either of those problems, many of the companies already located there oppose the idea of a cruise terminal, citing already existing problems with congestion, both on the land and in the water.
"It's absolutely nonsense to even think about it being at Blount Island," said Magnus Lindeback, chief executive officer of Blount Island tenant Coastal Maritime Stevedoring. "Blount Island has for years and years been built to be a cargo-handling facility. With the congestion on this island, it makes no sense."
The Blount Island site also raises security concerns, requiring the port to separate cruise and cargo traffic, an operation port executives say can be done by using different bridges, building dividers and installing traffic lights, a project that could cost the port authority up to $8 million, according to port Executive Director Rick Ferrin.
"We can make it work, if it's the only option we have, and we've consciously decided that we want to stay in that business," Ferrin said.
That would be a decision that Carnival Cruise Lines, which has a ship based in Jacksonville year round, would be happy with.
"I think everybody's been very pleased by the reception to our cruises out of Jacksonville," said Tim Gallagher, spokesman for Carnival. "Our guests are. The company is."
Additional growth, though, will require larger ships, he said, whose height, or air draft, is too tall to pass under the Dames Point bridge. "We need to try to find ports that can provide berthing facilities that don't have an air draft limitation," he said. "It doesn't hold the potential then that it would without an air draft issue."
Living up to the potential seen by the cruise industry will require the board to ponder other issues as well as location, said Mason, who said he sent out a "call for wisdom" to the other board members.
"I'm encouraging our board members to really think critically about this in terms of not just the data and the information, but where is the wisdom that the board needs to exercise," Mason said.
Once the question of how valuable the cruise business is to Jacksonville is answered, he added, "that will point to how much risk we're willing to take to locate a cruise ship terminal at Blount Island or Pine Island or anywhere else."
That issue might be resolved as soon as next week, when the port authority board has scheduled a daylong workshop on the issue.
For now, executives at the port are vocal in their commitment to the cruise business.
"We've got a very enviable, and a very viable, niche in the cruise market," Ferrin said. "We've got a really bright future in cruise, and I think we have a very bright future in cargo."