Mayor Paul Fraim presents credible defense of cruise terminal, but holes remain

It is a rare morning when you open the newspaper and find a column written by Norfolk Mayor Paul Fraim. (Half Moon Cruise and Celebration Center, Past and Future, Virginian-Pilot, July 13, 2013 )
 

Hizzoner, in defense of the cruise terminal

Either Hizzoner was pressured into responding to intense public criticism heaped on the city officials and City Council because Carnival Cruise Line, the last one, is leaving for another port or he felt compelled to mount a defense of a civic project of which he was so much a part.

Either way, Hizzoner mounts a credible defense. You can’t deny that his facts and figures are rock solid and that his institutional memory is more acute and profound that most of Norfolk's City Council members. (Except for Paul Riddick whose histrionics often supersede his truth.)

That’s his strength, his charisma and his talent to remain a powerful force in a city that could sometimes be ripped apart by racial divisions and split by cultural conflicts.  

Hizzoner has managed to maintain a precarious balance between City Council factions, the public and his supporters, sometimes with frustration and barely conceived anger, and sometimes with deft and clever bargaining. 

Hizzoner is a lawyer, and the job of lawyers is to make a weak argument strong and a strong argument weak.  

His defense of the cruise terminal and the city’s investment is a strong, proud and compelling argument. 

But there are gaps. 

Into the sunset, they sail

Someone didn’t do their homework. Or they were so mesmerized and blinded by the prospect of an icon on the waterfront that they neglected the reality.

Ships are mobile. They can leave a port anytime. Their investment is the ship, not the cruise terminal. The cruise terminal, however, is a fixed asset, a public investment.

If the ships leave, you have a mausoleum. 

The Half Moon Cruise and Celebration Center didn’t become the Half Moon and Celebration until after it was sold as a cruise terminal.

The argument that Immigration and Customs pressured the city into building a new cruise terminal to process passengers is a red herring. 

Other port cities, notably Baltimore, refurbished an existing cargo terminal for less money and less pressure from Immigration and Customs. 

“The Virginia Port Authority thought so well of the idea they agreed to fund $5 million of the cost” Fraim said. 

Publicly, the Virginia Port Authority praised the cruise terminal. Privately, they groused that the cruise terminal was a waste of money, knowing full well that ships are mobile and a cruise terminal was a fixed asset, and that some day those ships would sail into the sunset and never return.  

Actually, the VPA was planning to refurbish a cargo terminal at Newport News Marine Terminal to process passengers and ships for a third of the cost. In addition, passengers could walk to and from their cars on the terminal. 

But local politics being what they are forced the VPA to surrender the idea because Norfolk wasn’t about to let Newport News be home to a cruise terminal.

And the $5 million the VPA “contributed” to the cost of the cruise terminal was forced on the state agency by Gov. Tim Kaine. 

If you remember, Gov. Kaine and Mayor Paul Fraim are (were) telephone buddies, so Hizzoner called the governor, as the story is told, and convinced the governor that Norfolk really needs this money to finish construction of the cruise terminal. 

Kaine listened. Then he sent down the word. Issue bonds to finance construction of the cruise terminal. It’s not clear if the VPA is paying the debt service on the bonds or the city, though I suspect the VPA is the listed debtor and paying the annual debt service. 

(If that’s the case, Hizzoner shouldn’t complain that the VPA doesn’t pay its fair share of taxes, since the Port Authority, essentially, paid for a portion of his cruise terminal.)  

“Since opening in 2007, the Cruise and Celebration Center has generated $8.5 million in direct revenue within the facility. Operating expenses have been $4.2 million. Principal and interest payments total $4.7 million; 381,000 passengers and 46,000 crew members have now visited Norfolk.”

Since only his Hizzoner has the inside track on the numbers, one is prevented from challenging the income and expenses generated by the cruise terminal. Yet a quick glance at past budgets will show that the city chipped in money every year to keep the cruise terminal operating.

Now the official economic impact. 

“Using conservative industry standards, both passengers and crew have spent $48.7 million,” Fraim wrote.

Which is just an educated guess based on a formula crafted and promoted by the Cruise Lines International Association, an industry trade group.No one, absolutely no one, knows how much passengers and crew have spent in downtown Norfolk. It’s an educated guess based on questionable and sometimes outdated economic models.

Be that as it may, retailers and shop owners bemoan the loss of the cruise business, as it did generate sales and filled the cash registers on lackluster days. 

But it leads me to conclude that the stores are starving for sales.

So many have left or are leaving.Because rents are too high and there’s no foot traffic. Now say goodbye to an occasional surge of foot traffic. But don’t expect downtown’s landlords to lower their rents.

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