Lease Agreement for Brooklyn Cruise Terminal Announced

Thursday, January 13, 2005
According to Mayor Bloomberg, Carnival Cruise Ship lines and Norwegian, have committed to New York as their exclusive Northeastern port of call through 2017.

A long-term lease agreement will allow New York City to move forward on its plans to create a modern cruise terminal on the Brooklyn waterfront. The lease agreement reached between the City's Economic Development Corporation (EDC) and the Port Authority of New York and New Jersey enables the City (PA) to take control of Piers 11 and 12 and proceed with the design and construction of the $30 million facility, which is expected to create at least 600 new jobs. Construction of the cruise terminal is part of the City's larger $200 million effort that was unveiled by the Mayor last year to renovate and expand its cruise facilities. The plan is intended to promote the fast-growing industry by building a new terminal in Brooklyn and completely overhauling the New York Cruise Terminal on Manhattan's West Side to support the growing number of passengers flowing into New York's ports.

"One of our most important economic development goals is to restore the greatness of New York City's waterfront by adding new uses that create jobs and offer residents access to the water, and nowhere is that transformation occurring faster than in Brooklyn," said Mayor Bloomberg. "As I said yesterday in the State of the City address, two of the world's largest cruise companies, the Norwegian and Carnival Cruise Ship lines, have committed to New York as their exclusive Northeastern port of call through 2017. This new facility will help us take advantage of the rapidly growing cruise sector, which already accounts for thousands of jobs and more than $600 million in annual economic activity for New York City. Once completed, the Brooklyn facility will be a major destination for the finest ships in the world and I want to thank Governor Pataki, the Port Authority and EDC for reaching this important agreement that will help us continue the revitalization of Brooklyn's waterfront."

The initial lease term is five years with two additional five-year renewal options. The lease calls for the City to pay the Port Authority about $560,000 a year in rent, starting in September 2005. These payments will be funded through revenue generated by fees from cruise lines, concessions and other subtenants at the facility. The design of the Brooklyn terminal is progressing rapidly; the design team has conducted all site and utility surveys and the preliminary design has been reviewed by the cruise lines and Customs officials. Construction is expected to begin in February with an anticipated opening in late 2005. "New York City's plan to develop a passenger ship terminal in Brooklyn is consistent with the Port Authority's commitment to maintain a vibrant maritime presence in the borough," said Port Authority Executive Director Kenneth J. Ringler Jr. "This new facility in Brooklyn will allow New York City to handle the phenomenal growth in its cruise industry, and will ensure that the City remains a choice destination for cruise operators." After conducting numerous navigation, traffic and design feasibility studies to determine the best location for a cruise ship berth in Brooklyn, EDC decided Pier 12 is the preferred location for an initial terminal. During the early planning process, the local community expressed concern regarding the impact of traffic on local streets. To address these concerns, EDC worked with the Port Authority to secure Pier 11, which will provide vehicular access to the terminal to reduce the traffic impact on the community. The City is leasing about 28 acres from the Port Authority, which includes Piers 11 and 12, the associated upland area and the Atlantic Basin. The cruise facility on Pier 12 will provide sufficient warehouse and upland area to accommodate the operational needs of the cruise lines. A passenger pick-up and drop-off area and approximately 400 parking spaces will be provided on Pier 12, while Pier 11 will offer a vehicular access road to the terminal. In April, Mayor Bloomberg announced the City's Master Plan to create three modern cruise ship berths at the New York Cruise Terminal and one berth in Brooklyn in the next four years. Based on current projections of the industry's growth, it is anticipated that an additional berth will be needed in Brooklyn in the next ten years. The City has already reached long-term agreements with Norwegian Cruise Lines and Carnival Corporation, two of the world's largest cruise companies, which require them to bring at least 13 million passengers to New York City and pay the City more than $200 million in port charges through 2017. In return, the City committed to give each line preferential berths on specific piers and is offering the cruise lines incentives in the form of fee reductions in exchange for volume and revenue guarantees, along with providing incentives to promote growth beyond current projections.Improvements at the New York Cruise Terminal in Manhattan will include all new facilities to accommodate larger ships by installing modern adjustable gangways and expanded pier aprons. This will allow passengers and supplies to be loaded and unloaded with greater comfort and efficiency. New terminals will segregate embarking and disembarking passengers onto separate levels, allowing for more efficient use of space and reducing congestion caused by passengers arriving and departing at the same time. In addition, the new facilities will have enhanced security measures, new passenger drop-off areas and increased parking facilities. Renovations to the New York Cruise Terminal will be completed in 2009.Almost 900,000 passengers came through the New York Cruise Terminal in 2003, up from an average of 400,000 in the 1990s. That is expected to increase to 1.5 million passengers by 2017. EDC estimates that the cruise industry supports more than 3,300 jobs and has total economic activity of about $600 million, which is expected to grow to $1.2 billion by 2014.

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