Listen to article \u2022\u00a00:00 min<\/p>\n
A cruise ship sailed out of the Port of Philadelphia this spring for the first time in 15 years<\/a>, as state and local officials celebrated a new economic driver for the region.<\/p>\n Officials have projected that the new cruise business \u2014 anchored by Norwegian Cruise Line at a Hog Island terminal near Philadelphia International Airport<\/a> \u2014 will create more than 2,100 jobs and generate $300 million in annual economic activity. <\/p>\n What they did not anticipate before breaking ground in December was that several obstacles \u2014 including several weeks of subfreezing temperatures and icy conditions on the Delaware River<\/a> \u2014 would send the construction project millions of dollars over budget.<\/p>\n The cost of building the terminal has increased 50% to more than $60 million, according to the Philadelphia Regional Port Authority<\/a> (PhilaPort), an independent state agency that owns seaport facilities along the Delaware. The port authority is funding the project.<\/p>\n PhilaPort is considering obtaining financing to help cover the $20.1 million in cost overruns. The authority\u2019s board this month approved a resolution<\/a> authorizing staff to borrow up to $15 million. PhilaPort spokesperson Marty O\u2019Rourke said loan terms remain under negotiation.<\/p>\n In addition to the potential financing, the port authority is funding the project from operating revenues, O\u2019Rourke said. PhilaPort generates revenue from its leases with tenants that operate facilities such as marine terminals and warehouses. <\/p>\n PhilaPort\u2019s budget for the fiscal year that began July 1 includes $34.5 million in revenue.<\/p>\n Despite the delays, Norwegian Cruise Line\u2019s ships have continued to dock at PhilaPort\u2019s under-construction terminal since April. Mayor Cherelle L. Parker<\/a> and Gov. Josh Shapiro<\/a>, both Democrats<\/a>, attended<\/a> an onboard ceremony for the Norwegian Jewel\u2019s inaugural call<\/a> that month.<\/p>\n Shapiro \u2014 whose appointee chairs PhilaPort\u2019s board \u2014 touted the cruise business<\/a> \u201cas the newest addition to our commonwealth\u2019s fast-growing tourism industry.\u201d<\/p>\n There had been 13 voyages as of mid-July.<\/p>\n PhilaPort remains upbeat about its new revenue stream. Under a seven-year agreement, Norwegian Cruise Line has committed to 41 voyages annually to locations like Bermuda, and PhilaPort says it will receive $59 million in rent from the company over that period of time.<\/p>\n \u201cThe key point to remember moving forward is that all infrastructure is now in place for additional cruise lines to start using the PhilaPort Cruise Terminal,\u201d O\u2019Rourke said. Each new line has the potential to generate an additional $8.5 million in annual rent, he said.<\/p>\n Construction began in December<\/a> after PhilaPort acquired the Hog Island terminal facility in Tinicum from Energy Transfer Marketing & Terminals L.P. for $10. Under the deal, ownership of the 15.5-acre property reverts back to Energy Transfer in seven years.<\/p>\n