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Portland's Ocean Gateway attracts events, but can it pay for itself?

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Portland's Ocean Gateway attracts events, but can it pay for itself?

PORTLAND — Despite losing its main tenant this year, events scheduled for the Ocean Gateway cruise ship terminal and revenue from berthing is expected to cover operating costs for the city's 2-year-old facility.

Still, the city is counting on construction of a long-awaited megaberth to generate enough funds from cruise ships to cover its debt for Ocean Gateway and to finally make some money off the industry.

"Will the events and berthing cover operating costs (this year)? Yes," City Hall spokeswoman Nicole Clegg said. Revenue should also cover about half of the debt service for the terminal, she said.

It costs about $80,000 to operate Ocean Gateway annually. That $80,000, however, does not include electricity, because Ocean Gateway and the Maine State Pier are on the same meter, Clegg said. Electricity totals about $125,000 annually for both structures.

The city owes about $280,000 annually in debt service. The Cat ferry, which was the terminal's main tenant for the past two years, was covering operating costs through its lease from the city.

The city expects to bring in about $70,000 from weddings and other events held at Ocean Gateway this fiscal year, which ends June 30. Ocean Gateway made $33,000 from cruise ships in fiscal year 2010.

Smaller cruise ships are scheduled to berth at Ocean Gateway for much of June, July and August. A few weddings are scheduled then, too. Clegg said because of federal security requirements, the space cannot usually be rented for an event if a cruise ship is berthed.

The city has attracted events without significant marketing of the venue or the availability of kitchen facilities. Clegg credits the terminal's very visible location for attracting business and said local caterers have become used to working without an on-site kitchen.

It costs $2,250 to rent Ocean Gateway for an event. The city also has chairs, tables, stages and public address systems for rent for additional fees.

Seventy cruise ships are scheduled to visit this year, compared to 48 in 2009. Because the Cat is no longer taking up the berth at Ocean Gateway, smaller cruise ships – which previously berthed at the Maine State Pier – will now use Ocean Gateway.

Ocean Gateway can handle ships up to 750 feet long, although its actual berth is 475 feet. Clegg said the location of the access on the ship determines if it can berth at Ocean Gateway. The Maine State Pier has a 1,000-foot berth.

The New England and Canada cruise itinerary has become popular the past few years, Clegg said, and many of those ships are smaller. One of the so-called "boutique" regional cruises, the American Glory, will make Portland its home port this summer, which means it will begin and end its cruises at Ocean Gateway.

"We're really excited about that," Clegg said. American Glory carries about 50 passengers and will be in and out of Portland from July through mid-September.

The city makes most of its money off of the larger cruise ships, though, which pay a higher per-passenger fee and carry more passengers. According to its fiscal year 2011 cruise ship budget, the city expects to bring in $540,000 from large cruise ships, versus $23,000 from small cruise ships.

With berthing, security, fresh water and gangway rentals, the city expects to generate a total of $685,000 in revenue from the cruise ship industry. Its expenditures, which include marketing, security, maintenance and staffing, total $222,900. Which means the city should make more than $462,000 from cruise ship visits.

It is unclear how much it costs to operate the Maine State Pier annually because of the electricity-sharing with Ocean Gateway. However, in the past city officials have said it costs about $200,000. The pier has two tenants, McAllister Towing – which owns Portland Tugboat – and Ready Seafood. Ready pays the city $100,000 annually for its space.

The Maine State Pier is also scheduled for improvements in fiscal year 2011, including $160,000 for a new gangway and $260,000 for other needed repair work.

According to Clegg, if the city gets its megaberth funding, it stands to make much more off the cruise ship industry because it will have the ability to accommodate more than one large ship at a time by using the megaberth and the Maine State Pier berth.

"Cruise ships prefer to berth, not anchor," Clegg said.

The city's focus right now is to get the megaberth built, she said. The state bond package going to voters in June includes $7 million for the project, which has already been designed and approved.

"Our goal would be to have it ready for the 2011 season," she said.

Kate Bucklin can be reached at 781-3661 ext. 106 or kbucklin@theforecaster.net