Page 29: of Maritime Logistics Professional Magazine (May/Jun 2017)

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Another Kind of P3

Miami, Florida is set to enter a PPP deal of a different sort. In March 2017, cruise giant Royal

Caribbean (RCL) broke ground on new terminal that will provide a homeport for its largest cruise vessels. In a recent regulatory fling, RCL reveals: “In July 2016, we executed an agree- ment with Miami Dade County (MDC), which was simultaneously assigned to Sumitomo Bank- ing Corporation (SMBC), to lease land from MDC and construct a new cruise terminal at PortMi- ami in Miami, Florida. During the construction period, SMBC will fund the costs of the terminal’s construction and land lease. Upon completion of the terminal’s construction, we will operate and lease the terminal from SMBC for a fve-year term. We determined that the lease arrange- ment between SMBC and us should be accounted for as an operating lease upon completion of the terminal.” At a time that changes are coming to lease accounting, such a lease would remain off the books – not showing up on RCL’s balance sheet. When the deal was signed, local media sources reported, “The County agreed to pay $15 million for new roads to the terminal and surface work, while Royal Caribbean said it would fnance the $247 million development (SMBC loan). The cruise company will also pay the county $9.5 million in annual rent.”

Barry Parker

The Author of bdp1 Consulting Ltd provides strategic and tactical support, including analytics and communications, to businesses across the maritime spectrum. The company can be found online at www.conconnect.com

Credit: Broward County’s Port Everglades www.maritimelogisticsprofessional.com 29

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