Broward County Commission Regular Meeting
Director's Name: Glenn Wiltshire (Acting Director)
Department: Port Everglades Division: Business Development
Information
Requested Action
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MOTION TO AUTHORIZE County Administrator or designees to negotiate a long-term land lease and development agreement with Balearia Caribbean Ltd., Corp. to design, build, finance, operate, and maintain a new exclusive ferry terminal on County-owned land adjacent to Berth 28A at Port Everglades.
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Why Action is Necessary
Broward County Board of County Commissioners ("Board") authority is required to negotiate a long-term land lease and development agreement directly with Balearia Caribbean Ltd., Corp.
What Action Accomplishes
Authorizes staff to negotiate a long-term land lease and development agreement directly with Balearia Caribbean Ltd., Corp. for a new ferry terminal adjacent to Berth 28A on land currently occupied by Building 27, with any agreement resulting from those negotiations being brought back to the Board for approval.
Goal Related Icon(s)
☒County Commission
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Previous Action Taken
None
Summary Explanation/Background
THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners’ (“Board”) Value of “Building partnerships and working collaboratively with others to meet shared objectives,” and the Goal of “Ensuring economic opportunities and a sustainable economy, with an emphasis on Broward’s lower and middle class.”
Balearia Caribbean Ltd., Corp. ("Balearia"), has been operating a fast ferry for passengers and cargo services from Port Everglades to the Bahamas since 2011. On November 14, 2023 (Item No. 19), the Board approved the latest Port Everglades' Passenger Cruise Terminal and Berth User Agreement between Broward County and Balearia to conduct and operate cruise passenger services at Port Everglades for a one-year term commencing on December 1, 2023, and expiring on November 30, 2024.
Balearia originally operated out of Cruise Terminal 1 in the Northport area of Port Everglades until that terminal was demolished in 2019 as part of the Convention Center East Expansion project. Since then, Balearia has been assigned passenger cruise terminals, passenger-cargo berths, or other port facilities on a non-exclusive basis, subject to availability. Balearia offers sailings to Freeport and Bimini up to six days a week. In Contract Year 2023, Balearia's throughput was 115,846 passengers, generating a total revenue of $789,221 for the Port. While Balearia operates primarily from Cruise Terminal 21, Port staff is currently in discussions with Carnival Corp. about redevelopment of that terminal to accommodate larger Carnival Corp. ships.
On February 2, 2024, Balearia sent a letter to Port staff (see Exhibit 1) proposing an agreement to design, build, finance, operate, and maintain a new exclusive ferry terminal and associated infrastructure on County-owned land adjacent to Berth 28A located at the Port’s Midport area (see Exhibit 2). With this project, Balearia seeks to continue its relationship with Broward County while looking to the future to enhance and expand its operational growth, efficiency, and profitability. While Balearia’s letter proposes an initial term of 30 years and a 20-year option term, the term length and all other business terms will be subject to negotiation.
Balearia proposes demolishing County-owned Building 27 to construct a new state-of-the-art three-story building and adjacent berthing facilities dedicated to Balearia's ferry operations. The current tenant in Building 27, Seabulk Towing Inc., is on a month-to-month lease as they are building out new office space outside the Port. Seabulk Towing Inc. expects to relocate by December 31, 2024.
Balearia proposes to configure parking, storage, and inspection areas adjacent to its new terminal in accordance with applicable U.S. Customs and Border Protection standards for passenger and ferry terminals. Balearia estimates a budget of approximately $10,000,000 for the project, and would fully fund the project without governmental funds, tax incentives, or other financial assistance.
By establishing an exclusive and dedicated ferry terminal at Port Everglades, Balearia intends to expand its transportation of cargo, vehicles, and passengers throughout the Caribbean. Balearia expects its new terminal will spur economic growth for Balearia and Port Everglades through increased revenue from their expanded cargo and passenger operations. Balearia is committed to incorporating cutting-edge, environmentally conscious technologies into all facets of operations and looks forward to the possibility of introducing and incorporating such technologies into future undertakings at Port Everglades.
The proposed berth location for Balearia’s ferry operation, Berth 28A, is currently used to moor tugboats. Under the Port’s Master/Vision Plan Update (“Plan”) approved by the Board on June 16, 2020 (Item No. 70), that berth, as well of the rest of the Tracor Basin, was identified as a potential area to be filled in to provide additional land and berth space between the existing Berths 27 and 29. While the Plan identified this project proceeding in the 2024-2026 timeframe, that Basin is also the location identified for the temporary relocation of the Coast Guard Station during the Army Corp of Engineers Port Everglades Navigation Improvements Project, currently projected in the 2026-2029 timeframe. In addition, discussions with Royal Caribbean Cruises Ltd., as part of the Second Amendment to the Passenger Cruise Terminal and Berth User Agreement approved by the Board on February 21, 2023 (Item No. 13), envision a renovation of Cruise Terminal 29 and addition of a parking garage that would not require the additional land that was to be created by filling in the Tracor Basin. In addition, Building 27 was already identified for demolition in the Plan to allow for potential expansion on Cruise Terminal 26. All of these changes since 2020 are being taken into account during the 2024 update to the Master/Vision Plan currently underway and expected to be completed in late 2024/early 2025.
Chapter 32 of the Broward County Administrative Code provides authorization for the Port to lease any real property within the Port Jurisdictional Area upon any terms and conditions the County deems proper and where the County determines that such lease is in its best interest. Port staff recommends entering direct negotiations with Balearia to negotiate the ground lease terms for Balearia’s proposed ferry terminal. Any lease agreement resulting from the negotiations will be returned to the Board for approval.
Source of Additional Information
Jorge A. Hernández, Director, Business Development Division, Port Everglades Department, (954) 468-3501
Josh Miller, Property Manager, Business Development Division, Port Everglades Department, (954) 468-3518
Fiscal Impact
Fiscal Impact/Cost Summary
Balearia expects to fund the project fully at a total cost of approximately $10,000,000. Once complete, Balearia plans to expand its service to other locations in the Caribbean, thus increasing revenue to the Port.