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According to a news headline in the San Diego Union-Tribune on Thursday, January 13, Carnival Cruise Lines is pulling its ships out of San Diego.
This move leaves the port in an untenable situation.
The port accepted an $8 million dollar loan from Carnival in back in 2005 to build a temporary tent facility on the Broadway Pier, in order to accommodate overflow cruise ship traffic, while the proposed B Street Pier redevelopment took place. Redevelopment of B Street Pier hasn’t happened yet, and may never happen, in part due to the port’s worsening financial situation.
Then in 2008, apparently at the insistence of the port, Carnival agreed to increase the loan to $12 million in order to fund the construction of a larger permanent cruise ship terminal facility on Broadway Pier, even though Carnival told Mayor Jerry Sanders that it didn’t think its cruise ship stop projections justified such a large expenditure. That loan is to be paid back via a per-passenger berthing fee on future cruise ship (those owned by Carnival and other cruise lines) calls here.
Per the U-T, citing diminished business due to violence in Mexico and various other factors, the port and Carnival are now indicating that projected cruise ship calls here will drop from 255 in 2008 to 103 this year, and are projected to drop even further to about 76 in 2013. Carnival indicates that much of its focus is being diverted to Australia from the west coast and Mexico. While Carnival Corporation says it may bring its cruise ships back to San Diego someday in the future, it seems like a very weak reed to cling to for the port, which is now stuck with an unneeded cruise ship terminal structure on Broadway Pier, estimated to cost somewhere north of $28 million.
What Carnival’s leaving means for its terminal financing contract with the port, how it plans to recoup its own investment in the new terminal, how the port plans to generate its own revenue needed to pay off its own investment in its boondoggle at the foot of Broadway, are now subject to question.
In a recent news story, outgoing Commissioner Cushman indicated that the port only makes $25,000 — $30,000 per cruise ship visit, but even that low estimate is suspect. An earlier study by KPBS radio discovered that the port subsidizes its maritime operations, including cruise ship operations, out of its ground lease revenues. And more recently, in a sworn deposition in a lawsuit over the Broadway Pier, the port’s own marketing director, Rita Vandergaw, admitted that the port typically loses money each time a cruise ship calls here.
All along, members of the public have urged the port not to privatize our North Embarcadero for the benefit of the cruiselines. They pointed out that cruise ship calls are transient events, not something the port should build its own long-term business plan around. Those warnings were ignored by the port, and now we may end up stuck with an ugly onion at the foot of Broadway that the public never wanted, which was built in violation of the original North Embarcadero Visionary Plan and the port’s own master plan. All throughout the last five years, some port staffers have acted more like agents for the cruise lines than as port employees, and it remains to be seen whether or not they will be held accountable by the current port board and the new administration at the port.
Instead of simply being a barricaded parking lot for cruise ships, our waterfront needs redevelopment that turns our North Embarcadero piers into profitable public places that are used daily by the public, not fenced off for the benefit of private companies.
There is a proper place for limited cruise ship operations along our waterfront, but it should be relocated down at the sprawling Tenth Avenue Marine Terminal, nearer the convention center and the bustling Gaslamp District.
Going forward, the port needs to listen more to the members of the public who believe that our Embarcadero can become a far more vital and profitable place for both San Diego county residents and their visitors to come to shop, sightsee, take harbor cruises, eat, fish, picnic and enjoy our own bayfront, and less to the voices who think that the only valid use of our publicly owned tidelands is to privatize them and fence them off for the profit of private interests.
The embarcadero belongs to all of us, and the sooner the port wakes up to that fact, and begins working with the community to make it a better place for its public owners, the better. As far back as 1907, San Diego’s master planner John Nolan called for the North Embarcadero to be reserved for San Diego residents and their guests to enjoy, with the focus on public uses and recreation instead of being handed over to private interests. Let’s all work together to continue Nolan’s legacy on our downtown waterfront.
You can read previous articles that provide background to this story here.
In addition to his other affiliations, Don Wood is a member of the Navy Broadway Complex Coalition, an alliance of local civic organizations dedicated to preserving and enhancing public access to downtown San Diego’s waterfront, which is currently involved in ongoing litigation with the port over its alleged failure to comply with the California Environmental Quality Act when it approved the proposal to build the new permanent cruise ship terminal structure on the Broadway Pier.