Terminal Cruise?

Taxpayers face another long walk—off the Port's short-falling Pier 66.

Uh oh. The Port is celebrating: Check your wallet. "Our field of dreams has paid off," declared Seattle Port Commissioner Jack Block in January after he and his colleagues approved construction—choosing the most expensive design on the drawing board—of a new cruise ship terminal at the Port's struggling Pier 66.

Predicted in 1993 to cost $65 million, the pier today has ballooned into a $134 million King County taxpayer facility of commercial restaurants, shops, conference center, pleasure ship moorage, cruise ship terminal, and the partially completed World Trade Center buildings and garage across Alaska Way. The central waterfront project was supposed to turn an early profit when it opened in June 1996, but has been so affected by cost overruns and leasing disappointments that officials can't now say for how much and how long the development will be in the red. Among other setbacks, the planned showplace Odyssey maritime museum opened two years behind schedule and is drawing only modest interest, the seafood-processing operation called the Fishing Place remains unopened after three years, and a new clothing/marine supply business on the pier has already closed.

The Seattle Port Commission, a five-member body elected at large in King County, sees such ventures as part of its mission even if that means losing your money. The Port "was created to make these kinds of visionary long-term investments for the community," says Port spokesperson Imbert Matthee. If capital investments don't recoup direct costs, the Port argues there are indirect profits to be made. "The [pier] is an economic development and urban revitalization project designed to turn a derelict portion of the downtown waterfront into a vibrant community asset," Matthee contends. "The Port's investment has generated nearly $310 million in private investment from [waterfront] office buildings, condominiums and a hotel, and created many new jobs."

Dan Caldwell, a Port critic and former commission candidate, says the pier has only produced "one of the worst boondoggles I've ever seen." It's not only that the costs have doubled, he says. "There's no public accountability."

With the pier taking a direct licking, the Port is hoping cruise ships will come to the rescue, flooding the concrete wharf with thousands of new visitors who will spend millions boosting waterfront and local economies. But like a microcosm of the pier itself, the cruise terminal is also a risky fling whose costs are shooting up dramatically, from $3.5 million to now four times that. The 1,900-foot docking apron and loading-baggage-customs area were roughed out when the pier was built in the hope Congress would modify a dusty law blocking cruise service from Seattle and other US ports. The Passenger Service Act of 1886 was designed to aid US shipyards, but is today thought to be a maritime nuisance: It prevents foreign-flagged cruise ships from ferrying passengers from one US port to another without a foreign stop en route. A cruise ship from Seattle could sail round-trip to Alaska only by stopping one day in Canada—an unattractive proposal to passengers seeking a full week of glacial views. It's simply easier for cruise ships—almost all of which are of foreign registry to avoid costly US maritime taxes and regulations—to start and end their Alaska trips in Vancouver.

The disputed law remains unchanged, but last fall Miami-based Norwegian Cruise Line found a way to make the trip anyway: It could manage a one-week Seattle-Alaska cruise with the required Canada stop merely using a smaller, faster ship. The liner it needed was already under construction in Germany, the $300 million, 78,000-ton glass-domed Norwegian Sky. Four similar midsize ships are on the drawing board for Norwegian, a recently restructured corporation that hopes to become "the thinking person's cruise line." Norwegian had already demonstrated the workability of sailing around the Passenger Service Act's legal blockade: In Hawaii it cruises US port-to-port by stopping off at Christmas Island, a dependency of Australia.

Last fall, the Port announced a four-year deal beginning in May 2000 with Norwegian to launch weeklong cruises to Glacier Bay via Haines, Skagway, Juneau, and Vancouver, although the Seattle terminal will be only partially completed by then. On the heels of the announcement, however, the terminal's costs suddenly began climbing. Invigorated by the deal, the Port drew up plans for a whole new, more expensive design costing $12.7 million. The latest plan calls for a 48,000-square foot terminal that would include a new grand entrance for the pier and more space for exhibitions and conferences—even though existing space is currently underused. Going first cabin, says commission president Patricia Davis, would "send a strong message to the industry and can attract other cruise lines."

At hearings on the new megaplan, the public was mostly a no-show. Instead, labor and industry insiders urged the commission to roll the big dice, which commissioners did, unanimously. The Port says plans for a $3.5 million terminal had simply become outdated. The estimates were "based on what the cruise industry looked like in the mid-1980s when Bell Street Pier was designed and when the average ship making cruises to Alaska accommodated 800 to 1,200 passengers," according to Matthee. The new pier is now designed for the next century, he says.

Aware of the Port's overrun record, detractors are already predicting terminal build-out costs will exceed $12.7 million and point out Norwegian could eventually hoist anchor, leaving taxpayers with one expensive waterfront viewpoint. Not only that, says former commission candidate Caldwell, "They built the existing pier too small and in the wrong place—it should have been closer to the tourist center in Pioneer Square."

The Port calls such thinking shortsighted and is banking that another international cruise line will sign on as well: Vancouver's piers are at capacity, and the $130 million yearly Alaska cruise business is growing 10 percent a year. However, a second cruise line here would have to sail Saturdays or weekdays—Norwegian's deal gives it exclusive use of Pier 66 for the preferred Sunday Alaska sailings.

Either way, we'll make millions, insists the Port. The new terminal may not directly earn back the public's investment in our lifetime, but the Port claims increased cruise ship tourism will bring in $18.6 million a year to "the economy." While there are direct Port benefits such as a $23,500 per-sailing dockage/passenger fee paid by Norwegian, the indirect impact over four years includes $74 million in new regional business revenues, $8.4 million in local and state taxes, and 400 new jobs, Port economists predict.

Those predictions have another Port critic and former commission candidate, environmentalist David Ortman, groaning in disbelief. "Do those rosy figures ever really pan out?" he asks. In 1994 for example, the Port predicted its future Pier 66 would be making a small profit within 20 years; by 1997, it dumped those sweet dreams and admitted Pier 66 would lose $7 million over the next 20 years.

The Port bolsters its happy talk with numerous facts and figures: Norwegian's 19 summer sailings are expected to draw 38,000 passengers, and the Sky will arrive with a crew of 800; Half the passengers will supposedly spend at least two extra nights in Seattle; passengers who go ashore are going to drop an average of $390 per cruise totaling more than $7.9 million a season on hotels, restaurants, entertainment, and goods.

Ortman wonders if these free-spending tourists will ever materialize. "If you're going on tour to Alaska, and stopping in Vancouver," asks Ortman, "are you going to want to spend your money in Seattle?"

The Port is undaunted, and even before Pier 66 terminal construction begins it's exploring a second big cruise landing at Interbay's Pier 90. "Several lines have already expressed a serious interest" in following Norwegian to Seattle, says Matthee.

Ortman shakes his head. "Is the purpose of the Port to make a profit or be a speculator?" he asks. Either way, Ortman adds, "They are as usual betting with our money, and I don't see any winners yet."

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