Port to decide on bonding for $150M cruise terminal complex, as garage bid exceeds estimate

With waterside construction now underway on Port Canaveral's new $150 million Cruise Terminal 3 project, port commissioners this week will discuss the best approach to pay for it all.

Commissioners on Wednesday will consider authorizing issuing three series of bonds totaling up to $117 million for the terminal project.

Port Canaveral Chief Executive Officer John Murray said the financing will have a mix of components — including taxable bonds, tax-free municipal bonds and bank loans — in an effort to keep financing costs as low as possible.

As part of the plan, port commissioners also will consider doubling an existing line of credit will PNC Bank to $50 million. Murray said money drawn from that line of credit would be repaid from the port's operating income.

The new terminal will be built on the south side of the port, east of the Cove restaurant district and west of Jetty Park, at the site of a recently demolished small cruise terminal. 

More:Port Canaveral's future: More cruise ships, more Disney and a new terminal

More:Carnival starts constructing 6,500-passenger 'XL' ship, which will be based at Port Canaveral

The project will be the port’s largest single capital project in its 65-year history. It will be completed in time for the arrival in the fall of 2020 of Carnival Cruise Line’s as-yet-unnamed 180,000-ton “XL Class” vessel, which will be Carnival's biggest cruise ship.

That ship will have capacity for up to 6,500 passengers and a crew of about 2,000. It will be the first North America-based cruise ship powered by liquefied natural gas.

Miami-based Carnival has agreed to contribute $50 million toward construction of the cruise terminal.

Carnival will pay the $50 million to Port Canaveral through a special fee, called a "capital cost recovery charge." The port will charge Carnival for every passenger getting on or off a ship at Port Canaveral until the $50 million total is reached.

Murray said that factor and other components of the deal with Carnival will be beneficial to keep Port Canaveral's bond rating high. That, in turn, will help keep the cost of borrowing relatively low.

Parking garage cost issue

One glitch in the process, though, has been a higher-than-anticipated bid for the terminal's 1,800-space parking garage.

Ivey's Construction Inc. of Merritt Island was the only company to submit a bid for construction of the garage.

Ivey's bid of $34.17 million was significantly above the $25 million the port had budgeted for that part of the project.

Port commissioners on Wednesday will consider approving a selection committee's recommendation to begin discussions with Ivey's on ways to redesign the garage to reduce costs through what's known as "value engineering."

Port staff will come back to the Port Authority will final pricing and a request for approval of the garage project in January.

Murray attributed the lack of bidders on the garage project and the higher-than-expected bid to the strong Central Florida construction market. That has kept potential contractors busy, while reducing the availability of construction labor and increasing the cost of construction material. He said increased tariffs on imported steel haven't helped matters, either.

Ivey's also is one of two bidders competing for the terminal project, a 185,000-square-foot facility that is estimated to cost $75 million to build. The other finalist is a team that includes Suffolk and H.J. High. 

Final bids on the terminal are due Dec. 20, and the contract is scheduled to be awarded in January.

Bermello Ajamil & Partners of Fort Lauderdale is doing $5.76 million in design work on the terminal project.

Terminal and parking garage construction are expected to start in January 2019 and be completed in April 2020.

Waterside work underway

Bill Crowe, Port Canaveral's vice president of engineering, construction and facilities, said "a critical milestone" in the waterside portion of the project was reached last week, with the arrival at the port of the first steel for the terminal's bulkhead wall.

Intermarine LLC’s cargo ship Ocean Globe delivered 261 steel pipes ranging in length from 110.5 feet to 126 feet. The 36-inch diameter pipe piles will be part of an A-frame structure under construction at the berth that will anchor to the waterfront bulkhead wall.  

Rush Marine of Titusville is the contractor for the waterside portion of the project. Rush has a $38.6 million contract to do that work, while CH2M Hill is doing $1.81 million of design work.

The project includes removing an existing outdated pier, which began in September, and replacing it with a 1,319-foot berth.

The marine works portion of the project is expected to be completed by end of November 2019.

In a new construction technique for Port Canaveral, a lightweight aggregate material will be used as backfill to reduce long-term settlement of the berth. The port said that will reduce the size of the steel that is needed and substantially decrease construction costs.   

Two passenger boarding bridges for the terminal are being designed and constructed by Adelte of Barcelona, Spain, which won that $5.25 million project.  

The terminal project also involves new roadways and utilities.

Dave Berman is government editor at FLORIDA TODAY.

Contact Berman at 321-242-3649

or dberman@floridatoday.com.

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