The port of Miami's total debt is set to pass $1 billion after Miami-Dade County commissioners approved a $225 million bond offering on Tuesday to meet existing lending agreements and pay the balance on a nearly finished underground tunnel connecting the island-port to nearby highways.
Auditors in March found a potential $1.6 million gap in the port's future payments toward its mounting debt stemming from an incentive to lure a new cruise ship into harbor last year, Deputy Mayor Ed Marquez told commissioners on Tuesday.
He noted ratings agency Moody's said on Friday the seaport's rating would not be impacted due to healthy reserves and strong revenue.
The port has $30 million in reserves, PortMiami Director Juan Kuryla told commissioners.
PortMiami over the past decade embarked on a more than $2 billion building spree, hoping to make Miami a more attractive choice for global shippers looking to distribute goods to the U.S. market.
With a deep dredge, larger cranes and upgraded facilities the port will be able to handle "Post-Panamax" ships that carry two or three times the load of standard freighters once the Panama Canal expansion opens in 2016.
Other deep water East Coast ports, including Baltimore, Norfolk, and New York, are already able to accommodate the massive ships.
Miami is the only port south of Norfolk, Virginia, with congressional authorization to dredge to 50 feet (15 meters). Other cities such as Charleston, Savannah and New Orleans are rushing to get hundreds of millions of dollars of projects funded and underway in time for the opening.
Moody's last year downgraded PortMiami's rating to A3, four levels above junk, while Fitch assigned it an 'A' rating, two levels away from non-investment grade.
While the port has staked its financial future on its ability to attract larger container ship from Asia, it is also facing challenges over plans to develop a portion of its land adjacent to waters too shallow for any maritime use.
Retired English football star David Beckham, recently awarded a Miami franchise by Major League Soccer, is on a high-profile campaign to build a 25,000-seat open-air stadium.
The port's recently approved master plan, however, calls for the development of more than 7 million square feet of convention, hotel and office space on the same site.
(By Zachary Fagenson; Editing by David Adams and Lisa Shumaker)