Port should select wisely when choosing company to operate cruise ship terminal 

The sleek new cruise ship terminal on Pier 27 is a welcome addition to the waterfront. Ideally, it will be a boon to The City and the region as it brings in visitors from around the world who might not otherwise visit or spend their money here. But it also has the possibility to become a giant albatross around the neck of the Port of San Francisco if not properly managed.

The new James R. Herman Cruise Terminal will become The City’s primary berthing spot for cruise ships in 2014. It will replace Pier 35, which is little more than a converted warehouse. The Port has long sought to upgrade its terminal since its capacity and docking capabilities became increasingly dated as cruise ships increased in size — especially the ones that travel internationally. Yet earlier terminal projects fell apart for varying reasons.

Operation of the new 60,000-square-foot terminal will make it possible for more cruise ships to berth in San Francisco, and Pier 35 can continue to be used as a backup. And projections suggest that more ships are on their way. The Port schedule shows 65 cruise ships docked in 2012. This year that number is expected to be 66, and next year’s schedule shows 74 arrivals.

The Port Commission is currently choosing between two companies seeking to oversee operations at the new building, including the cruise business as well as events and parking operations. In presentations to the commission Tuesday, both companies acknowledged that events are a crucial part of making the site profitable. The difficulty is in coordinating such events amid the arrivals and departures of swarms of tourists. Lost days and hours can drag down profits.

The Port should select an operator who will be able to steer ship traffic to The City. Up to 120 cruises a year could be handled here, and more ships would mean more people spending their money in San Francisco. The company selected should be held accountable for its promises. Years down the road, city officials shouldn’t be put in the position of wondering what happened to all those ships they were expecting.

But international tourism is a finicky business. The operator of the Pier 27 terminal also needs to demonstrate what can be accomplished if cruise ship business declines for some reason. The site-rental business would be a buffer if cruise business increases, but it could suddenly become critical to covering the Port’s costs if ships decided to head elsewhere or not sail at all — both variables that could be out of local officials’ hands.

On the balance, we believe the investment in the new facility was a worthwhile expenditure. But the best proof of that would be for the new facility to make money from its cruise ship traffic. That seems feasible if the always-tricky waters of management are navigated well.

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