THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
On December 4, 2007 (Item No. 45-A), the Board approved a Passenger Cruise Terminal and Berth User Agreement between Broward County and Royal Caribbean Cruises Ltd. (RCL) with an initial term of ten years, expiring on December 31, 2017 with options for RCL to extend the Agreement for up to two additional five-year terms. The original Agreement established minimum passenger guarantees for the ten-year term, as well as the framework for capital improvements to Cruise Terminal 18 to accommodate the Oasis Class of cruise ships, the world largest cruise ships. On October 28, 2008 (Item No. 53), the Board approved the First Amendment to the Agreement between Broward County and RCL to provide for additional funding for the Terminal 18 project which further increased RCL’s guaranteed passenger volumes. Under the First Amendment, capital costs for the Terminal 18 expansion increased from $37.4 million to $75.2 million, and recovery from RCL for its 89% portion of the capital cost was extended from six years to ten years. On December 13, 2011 (Item No. 67), the Board approved the Second Amendment to the Agreement between Broward County and RCL that converted the previous passenger guarantees to revenue guarantees over the remaining term of the Agreement and made other revisions associated with the completion of the renovations to Cruise Terminal 18.
Port staff was contacted by staff from RCL in November 2013 inquiring about the possibility of the Port authorizing RCL to paint the Royal Caribbean International (RCI) logo on the roof of Terminal 18 so that it would be visible to planes passing over the terminal. Based on that initial contact, a number of meetings were held between Port and RCL staff to further develop the proposal. Staff from the Public Works Department's Seaport Engineering and Construction Division also engaged with the manufacturer of the Terminal 18 roof material to assess the feasibility of painting the roof without affecting the existing manufacturers warranty or useful life of the roof. The manufacturer confirmed that the roof could be painted without affecting the warranty or useful life provided that specific procedures were followed. Based on that, Port staff developed a Work Letter similar to that used for other cruise terminal renovations to document the requirements that RCL must meet to paint the logo on the roof.
The Work Letter (Exhibit 1) addresses the following major points:
- RCL will design the logo as depicted in Exhibit A in the Work Letter, and will install, maintain, repair, and remove the logo at their own expense.
- Port Everglades staff must review and approve the logo installation and any other roof work before it is performed.
- RCL must comply with all requirements of the roof manufacturer for installation and maintenance of the roof coatings, and shall ensure that the logo painting in no way makes void or otherwise reduces any Terminal 18 warranties.
- RCL must ensure that any contractors involved in the logo work maintain insurance in amounts established by the Risk Management Division.
- RCL is responsible for removal of the logo and restoration of the roof to its prior condition at the termination of the Agreement between Broward County and RCL if directed by the Port Everglades Chief Executive/Port Director.
- Broward County may require RCL to also include a Broward County identifier on the Terminal 18 roof as part of the rooftop logo installation, consistent with the requirements of the Broward County Procurement Code. The Port Everglades Department would be responsible for all costs associated with the installation, maintenance, and repair of such identifier.
Obtaining Board approval of the Work Letter in substantial final form and authorizing the Port Everglades Chief Executive/Port Director to execute the letter provides flexibility for the Port Director to make non-substantive changes to the Work Letter, if required, as RCL proceeds with the design and installation while the Board is on summer recess. The Work Letter has been reviewed as to form by the Risk Management Division and the County Attorney's Office.
Since the current Agreement with RCL entered into effect in January 2008 through the end of December 2013, RCL has facilitated the movement of 9,029,003 cruise passengers through the Port on Royal Caribbean International and Celebrity Cruises cruise ships, including 2,012,842 passenger movements in 2013. That activity has generated $156,630,990 in revenue to the Port over that same period, and the minimum guaranteed revenue for 2014 is $29,589,831. As Port Everglades hosts RCLs largest level of cruise activity in the world, partnered with RCL to develop the world's largest single ship cruise terminal in the world, and is the homeport for four of the five largest cruise ships in the world, Port staff believes that the addition of the Royal Caribbean International logo on the roof, only visible from the air, further reinforces that partnership.
The RCL request is consistent with Article 15 - Promotion, of the Passenger Cruise Terminal and Berth User Agreement between Broward County and RCL. That article states that "RCL shall use commercially reasonable efforts to effectively promote and market the RCL LINES' passenger cruise operations at Port." Port staff believes that RCL's request to adding the RCI logo on the roof of the cruise terminal meets the intent of that article since it publicizes RCL's presence at the Port but does not include any naming or "branding" of the cruise terminal. The Port Everglades Department is exempt from the Advertising and Co-sponsorship provisions of the Advantage Marketing Program approved by the Board on August 25, 2009 (Item No. PH-9). |