QUESTION
Council Member Alexa Aviles Asks EDC About Cruise Terminal Revenues, Taxes, and the Community Fund
1:54:13
·
6 min
Council Member Alexa Aviles inquires about the revenue generation from cruise operators at NYC ports, the New York City and state taxes paid by cruise companies, and the specifics of the Community Priority Fund. The discussion explores the economic impact of cruise operations on local communities, addressing questions about cruise terminal agreements, taxation, and contributions to the community fund. Aviles highlights the contradiction between the establishment of a community fund and the unresolved community concerns related to pollution, traffic, and economic challenges.
Speaker 2
1:54:13
I just wanna get to the community fund.
1:54:15
Now in some of the earlier conversations I know, you you've been very open about about the potential of this community fun and exploring.
1:54:25
And our community has said, a dollar per passenger is an interesting and relatively arbitrary number.
1:54:35
Does the EDC know what the revenue generation has been for the cruise operators in our ports?
Speaker 7
1:54:47
The revenue generates
Speaker 2
1:54:48
Actually, how much how much does EDC make on the agreements.
1:54:55
So the agreements
Speaker 7
1:54:57
once fully executed over 15 years will allow us to execute on our economic development mission to the tune of about 400 $27,000,000 over the next 15 years.
Speaker 2
1:55:16
And how about last year?
Speaker 7
1:55:18
Last year, on annual, we gross about $40,000,000 net after Port America makes their management fee and investments in the terminals.
1:55:32
On a net basis, we have an NOI of about $10,000,000 for cruise once we do dredging and the work that's needed.
Speaker 2
1:55:43
Are you does does does the cruise terminal Excuse me.
1:55:50
Do the cruise companies pay New York City or state taxes directly?
Speaker 7
1:56:04
That's a that's a very good question.
1:56:06
Directly versus the passengers.
1:56:09
They do pay taxes.
1:56:11
I'll have to get back to you as to how that's divided up.
Speaker 2
1:56:13
We'd love to know
Speaker 7
1:56:14
how Absolutely.
Speaker 2
1:56:15
These cruise operators actually contribute to city and state taxes.
1:56:20
Because my understanding is they do not.
Speaker 7
1:56:23
We can absolutely get back to you.
Speaker 2
1:56:24
And and they don't actually around many ports around the country, which is a real problem because they use our services quite profoundly, and we subsidize in addition to So it also, we understand that cruise operators often pay ahead tax of $4 to $15 per passenger as when they get to the port of calls.
1:56:52
Is this dollar in addition to the 4 to $15 they pay?
1:56:58
Or, actually, the better question is, What do they pay to EDC in head tax per passenger per port of call?
Speaker 7
1:57:11
And I can pull up the you have the docadrogen orphanage.
1:57:13
So we have the so just before I pass it on to Felix, so we have the highest dockage and orphanage rates in the country.
1:57:20
That means that the
Speaker 2
1:57:21
Did you define what orphanage is?
Speaker 7
1:57:23
Sure.
1:57:24
Sure.
1:57:24
I'm sorry.
1:57:25
And I'll let Felix do it because as the as the coast guard man, he can explain it better.
1:57:31
The $1 fee is above and beyond that.
1:57:33
It is completely separate.
1:57:35
From their dockage and mortgage, and I just wanna stipulate.
1:57:38
This is a first of its kind.
1:57:39
We have not found any other port in the United States that is ever implemented a community fund fee.
1:57:47
So I just wanna stipulate that.
1:57:49
This is first of its kind.
1:57:50
It has never been done before.
1:57:51
And create and and so with that, I'll pass it to Felix to answer the what dockage and orphanages and what the rates are.
Speaker 11
1:58:00
Sure.
1:58:01
So so council member, the Warfarj fee is the fee per passenger, and that that number is $27.69.
1:58:10
Publicly posted on the ports America tariff online, and then the dockage fee is 14ยข.
1:58:17
Per registered ton that gets assessed to a ship that that docks at the terminals.
Speaker 2
1:58:24
So just for the record, so the 27.57 per passenger goes to ports authority.
1:58:32
I mean, These confuse all all the agencies.
1:58:36
A lot of ports.
1:58:37
Does that go to ports America?
1:58:40
And then goes to EDC.
1:58:41
What is the trail
Speaker 11
1:58:42
of this?
1:58:43
So that's that fee all the fees are are charged and collected by ports America.
1:58:50
Of that 30% of that fee, 30% is retained by ports America to cover cost of operations for running the terminals.
1:58:59
That includes labor, Steve Zohring, utilities, etcetera.
1:59:04
The balance is remitted to EDC.
1:59:07
And then EDC pays its cost of operations, dredging expenses, rental payments in Brooklyn to the Port Authority, insurance and other expenses, and the balance is what's left over as than that.
Speaker 2
1:59:23
The 10
Speaker 11
1:59:24
of them.
1:59:24
Yes.
Speaker 2
1:59:24
Is is the net after all those expenditures.
Speaker 11
1:59:28
Correct.
Speaker 2
1:59:29
Got it.
1:59:29
That that is very helpful.
1:59:31
And and I just I I asked these questions to underscore, well, the 1st in the country and absolutely appreciate that gesture and creating something new.
1:59:43
The the contradiction that juxtaposition here that is very challenging is that we wouldn't have community demands if in fact these agreements prioritize what the community needs to make sure it it doesn't have pollutants and it doesn't have traffic that is unbearable and doesn't have all the other economic challenges that we've currently faced.
2:00:10
Right?
2:00:11
We wouldn't need a community fund if if we would address these things upfront.
2:00:16
The community could have been consulted in what would be an appropriate, equitable Like, it's development of a solution.
2:00:27
Right?
2:00:27
Just telling us, oh, well, you get a dollar dollar per passenger maybe $400,000 when we've seen a net negative of significantly higher than that because we haven't studied the health impacts We don't know the loss of businesses.