Port Everglades Essay, Research Paper

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Outline

Thesis Statement: Port Everglades has experienced steady financial and geographical growth over the past decade. The purchase of more land will create more business and an increase of profit that would benefit investors as well as the community.

I. Land Purchase

A. Benefits

B. Cost

II. Broward County Government

A. Buying Decisions

B. Tax Breaks

III. Increased Business

A. Cruise Ships

B. Containerized Cargo

IV. Projections

A. Revenues

B. New Jobs

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The Expansion of Port Everglades

Port Everglades is located on the southeast coast of South Florida. It lies partly embedded within Ft. Lauderdale, Hollywood, Dania Beach and unincorporated Broward County (U.S. Army , 75). Port Everglades has experienced steady financial and geographical growth over the past decade. The purchase of more land will create more business and an increase of profit that would benefit investors as well as the community.

According to Arthur Novacek’s article in The Herald, Port Everglades has experienced steady growth in all facets for more than a decade now. The Port has also expanded physically as its business has grown over the years, but has now run out of additional room (9). The only solution to keep expanding the Port was to buy more land. This land, located next to the Port, belongs to Michael J. Swerdlow, a South Florida developer. Purchase of this land would increase the Port by 272 acres (Bussey, 20).

The benefits of this expansion are endless. The expansion will convert Port Everglades into a multipurpose hub linking sea, air, rail and highway transportation (Hemlock, 6). The Port will expand its existing operations and develop a 40-acre hub in which freight, packed in shipping containers, can easily be transferred to boats, railroads, highways, or the airport (6).

Port Everglades once depended solely on the petroleum industry. Now, however, Port Everglades has the second-highest cruise ship passenger count and the 12th largest containerized cargo operation in the country, and is also one of only 85 ports in America to operate with a profit (Novacek, 9). In 1996 the port showed $9.3 million in profits (Bussey, 20). According to Goodkin Research Corp. buying and developing this additional 272 acres could mean an economic impact of $3.4 billion in profit over 20 years (Hemlock, 6).

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Mr. Novacek’s previously cited article also stated that the value of expanding Port Everglades can’t be measured by an appraisal. Port Everglades’ land is located close to a large scale of economic generators such as seaports, airports, and highways. The worth of Port Everglades and its surroundings transcends far above the normal value of ordinary land (9).

The cost of the expansion is an approximated $140 million (Bussey, 20). As Novacek explains, the benefits by far outweigh the cost. The cost of the expansion will create a site for a 40-acre inter-modal container-transfer facility. An inter-modal facility is a dockside railroad yard that inexpensively and efficiently handles big cargo containers between ships, railroad cars, and trucks. This facility would provide a hub similar to that of airlines. This facility will also be used to provide a section for new container-cargo ocean services, warehousing, and in-transit storage for automobiles (9).

On September 23, 1997 the Broward County Commission voted 4-3 to buy the 272 acres next to the port from Michael J. Swerdlow for $120 million. Swerdlow will then lease back 97 acres to build warehouses, paying the Port $45 million over 30 years (Bussey, 20). There will be no taxpayer dollars spent in acquiring this land. The Port’s business community will provide the revenues to purchase the land. As an enterprise fund within Broward County Government, Port Everglades is a self-sustaining agency. It generates its own revenues and pays its own expenses, including debt service. Port Everglades does not receive County property-tax dollars for operations or capital expansion (Novacek, 9).

The Port owes much of its growth to cruise ships. The cruise industry produces $3.9 billion in tourism in Broward County’s economy each year. Cruise lines

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have plans to build nearly sixty ships by 2004. These ships range from small luxury liners to a new generation of behemoths with a capacity of carrying almost 4,000 passengers. The Port’s cruise business has climbed from 2.2 million passengers in 1998 to 2.7 million in 1999 (Scott, 1).

One of the biggest Cruise lines, Princess Cruises, announced that it will build four new ships to be based at Port Everglades (2). Celebrity Cruise Lines plans to build two additional ships by 2002, one expected to be based at Port Everglades. Royal Caribbean has six more ships planned. Holland America Line is building five colossal ships by 2005, of which at least one will be based at Port Everglades (Wyman, 1).

Not only are cruise ships taking advantage of the expansion at Port Everglades, but as Doreen Hemlock reports, the volume of container freight increased by 65% in 1995 after the last major expansion. In 1996, the volume rose another 13%. Booming markets in Latin America and the Caribbean are demanding more sailing frequency. SeaFreight line added new, larger vessels; Sea-Land Service added new service between Florida, the Gulf of Mexico and the Mediterranean (Bussey, 20). Cargo growth has exceeded projections by 10% in each of the past 5 years (Novacek, 9), and officials expect growth of 3% to 7% yearly through 2005 (Wyman, 6).

Projections on the outcome of the expansion of Port Everglades are excellent. Conservative projections show that over the next 20 years this additional property alone will generate $96 million in net revenues. Its development and use is expected to create a $3.4 billion economic profit impact on Broward and neighboring communities (9). Mercer Management predicts container-cargo trade will increase 5 to 7% through 2010 (Bussey, 22).

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The developing expansion of Port Everglades will also create a variety of new jobs. The Port already estimates 20,000 direct jobs will be produced (Hemlock, 6).With all the new business the large scale expansion of Port Everglades is attracting, the decision to purchase the additional acres of land is surely a lucrative investment.

Bibliography

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Bussey, Jane. “A Tale of Two Seaports.” The Herald 13 October 1997: 22.

Bussey, Jane. “Shipshape.” The Herald 13 October 1997: 20-21.

Hemlock, Doreen. “Port’s Missing Piece.” Sun-Sentinel 19 May 1997: 6.

Hutt Scott, Katherine. “Princess Will Add Four Ships.” Sun-Sentinel 23 June 1999: 1D+.

Novacek, Arthur. “Let Port Everglades Expand.” The Herald 27 May 1997: A1.

United States Army. Corps of Engineers Water Resources. Ports of Miami, Port Everglades, Palm Beach, and Port Canaveral, Florida, 1999: Port Series No. 16. Washington: GPO, 1999.

Wyman, Scott. “Port Gets Ready For Mammoth Cruisers.” Sun-Sentinel 5 July 2000: 1A+.