Port of Houston defends pricey deals to bring cruise lines to Bayport Cruise Terminal

February 8, 2013 2:20:01 AM PST
13 Undercover spent years looking at how your money is used at the Port of Houston and the $100 million of it spent on an unused cruise terminal.

After years of sitting empty, the pricey Bayport Cruise Terminal is finally getting two cruise lines to come up the channel. But they won't come without another heavy dose of public money.

Five years ago, I built a really expensive house. I didn't pay for it myself. I borrowed the money from you -- thanks a lot for that. The plan was a really rich family was going to move in, and they'd pay you back. But they never came. So my really expensive house has been empty all that time.

But don't worry, I am about to save the day. I found a really rich family willing to move in, and they're coming in 2014. But they won't have to pay rent. In fact, I'll pay them -- with more of your money -- to live in my house. I knew building this place was a good idea.

In the real world that sounds like a horrible idea. But it's pretty close to the truth.

You didn't lend me money to build a house. But you did lend the Port of Houston money to build the Bayport Cruise Terminal. It cost $108 million of your dollars to build and it's been empty almost every day since it opened.

The deal signed December 6 finally brings two cruise lines to Bayport. But to get Norwegian and Princess cruises to come, the port shelled out millions of your dollars.

"You're satisfied the deal is a good one?" we asked Port of Houston Executive Director Len Waterworth.

"Yes," he said.

Waterworth is the head of the Port of Houston, the guy hired to look out for your cash over there.

We'll get back to his deal in a minute. But first, let's look at how most ports make money.

Lets use Galveston as an example:

The Port of Galveston makes money two ways and it all comes from passengers. First, every passenger pays a port fee -- around $5 when you get on and another $5 when you get off. Next is parking, $70 a car per weeklong cruise.

Over the course of a year -- with dozens of cruises and thousands of passengers -- it adds up to millions for the port. It's money most ports can't live without.

"I can't afford to subtract that number from the bottom line," Port of Galveston Executive Director Mike Mierzwa said. "We are not a taxpayer-supported port, so we get no taxpayer support in Galveston."

In Galveston, they have to pay the bill for their big cruise terminal on their own. In Houston, the taxpayers pay the bill and you're still paying.

Remember those passenger fees? Houston gave them away to Norwegian.

"You're OK with that?" we asked Waterworth.

"Yes," he said.

And the Port of Houston gave away parking money too -- and more.

Houston gave Norwegian millions in cash just for showing up. Before they ever sail, Norwegian got commitments for $6 million in cash. They get the $1.2 million in port fees and $2.3 million from parking. Add it up, it's $9.5 million for Norwegian without having to sell a single ticket.

"There's a lot of different ports that we could've chosen. We wanted to be here," Norwegian Cruise Lines CEO Kevin Sheehan said.

Of course they did. No other cruise port we talked to even comes close to giving that kind of money away.

The Port of Houston admits this deal won't bring in a cent to the Port of Houston.

"At a net loss to the port, but a huge gain to the community," Waterworth said.

The port says bringing in a cruise ship every other week will create a need for hotels, restaurants and entertainment venues near the now-barren Bayport Cruise Terminal.

"The primary part of my job is economic development, job growth," Waterworth said.

But for every new job the deal creates, the port is giving the cruise line $32,000 of your dollars.

"It's easy to criticize, it's hard to lead," Waterworth said. "Is this a good deal? Time will tell, and this was the solution I was able to come up with."

It puts ships at the port's really expensive house, but it makes me wonder if building that really expensive house five years ago was such a good idea after all.

The first ship doesn't arrive until 2014, but the port already paid out $1.7 millions -- so much cash that it caused the port to lose money for the month of December.