The Port of Galveston is seeking new means to finance port development and growth, which will include cruise terminal improvements, enhanced safety and security, and another new terminal. Strategic investments will help fund the port’s ongoing growth, which will, in turn, have tremendous local economic impacts.
Port Growth Planned
Port of Galveston has planned a variety of port and terminal improvements, including expansions to cargo operations as well as cruise operations. The Pier 25 cruise terminal is slated for expansion, and the cruise port is partnering with MSC Cruises for a fourth terminal at Pier 16.
These improvements will support more cruise ship visits, including homeporting Carnival Jubilee when the new ship debuts in December 2023, offering 7-night Western Caribbean sailings visiting ports in Mexico and Honduras. Carnival Cruise Line also sails Carnival Vista, Carnival Breeze, and Carnival Dream from the Texas homeport.
Other vessels homeporting in Galveston in the coming months include Royal Caribbean International’s Allure of the Seas, Adventure of the Seas, Voyager of the Seas, and Radiance of the Seas, as well as Princess Cruises’ Ruby Princess.
Because the port’s older terminals have not received recent updates to accommodate newer vessels, projects such as gangway updates, berth upgrades, new roofing, and other modifications to improve the efficiency of passenger processing are now necessary.
New Funding Sources Sought
To finance so many improvements, Port of Galveston is seeking a variety of funding sources. Both Carnival Cruise Line and MSC Cruises are partnering with the port for their respective projects, but other funding sources are also necessary.
“We’re considering issuing $100 million in bonds to help fund much-needed, time-sensitive projects,” said Rodger Rees, Port director and CEO. “As a self-sustaining city entity, we’ll seek approval from our Galveston Wharves Board of Trustees and the city for issuance of the bonds.”
The cruise port is also seeking some reimbursement for the $58 million in lost revenues from the pandemic-related industry shutdown, though the total amount of reimbursement has not yet been decided.
This follows the decision to impose a new tariff on cruise passengers, and the consideration of extra parking charges for travelers using port parking for multiple days. Funding from both of those income streams may be funneled back into port development.
The cruise port currently has financial reserves and is also hoping to help finance the port improvements through the ongoing growth of cruise and cargo traffic.
Economic Growth Expected
While it may seem as though the port is seeking excessive funding, the proposed improvements and expected growth of port activity will contribute immensely to the local economy.
“None of us likes debt, but I think everyone understands that we have to go into debt to finance time-critical projects of this magnitude,” said Rees.
A recent economic study of the fourth cruise terminal’s impact expects 925 jobs to be generated and $177 million in local business revenue annually. This will come not only from port fees and taxes, but also from the spending of new cruise travelers on local hotels, restaurants, rental cars, and much more.
Furthermore, the new terminal expects almost $5.1 million in state and local taxes per year. In just a few years, then, the economic impact of the terminal will vigorously surpass the initial investment.