MARGARITAVILLE AT SEA

Board of County Commissioners · 2026-07-21 · resolution

Resolution approving a Preferential Berthing Rights Agreement between Miami-Dade County and Classica Cruise Operator Ltd. d/b/a Margaritaville at Sea (MVAS), with an anticipated positive fiscal impact to the County of $23,148,594.00. The agreement grants MVAS preferential berthing rights at Cruise Terminal C at PortMiami, with a five-year term commencing upon the first vessel call on January 9, 2027, through April 30, 2031, with two optional five-year renewal terms. The agreement includes a Minimum Annual Guarantee derived from MVAS's commitment to 100% vessel occupancy for each of the confirmed vessel calls set forth in Exhibit A (approximately 170 calls), a unitary fee per passenger fee aligned with PortMiami tariff equivalency subject to a 3% annual escalation, and incentives related to parking, marketing, non-peak day calls, and evening calls. The County has reassignment rights for Force Majeure events, construction activities related to the North Bulkhead Rehabilitation Project and Berth 10 Project, and governmental directives. The agreement was adopted by the Board of County Commissioners on 7/21/2026, following a favorable recommendation from the Aviation and Seaport Committee on 6/8/2026. The agreement is expected to generate approximately one million passenger movements and at least $23.15 million in guaranteed revenues over the five-year term. The agreement represents the first preferential berthing agreement with a new cruise line partner since the Port's 2019 agreement with Virgin Voyages. The agreement will operate out of Terminal C. The term of the Agreement commences upon the first vessel call on January 9, 2027, through April 30, 2031, with two optional five-year renewal terms upon mutual agreement. The agreement includes a series of incentives designed to support passenger growth, operational efficiency, and year-round demand at the Port. The non-peak day and evening-call incentives provide a 50% reduction of applicable port fees for qualifying calls. Only one operational incentive may apply per vessel call, and all incentives are structured so as not to reduce other fees payable to the County. The Seaport Department staff members responsible for monitoring the Agreement are Frederick P. Wong, Jr., Deputy Port Director, Operations, and George Andrews, Assistant Director, Strategy and Economic Development. Margaritaville at Sea, operated by Classica Cruise Operator Ltd. in partnership with the Margaritaville hospitality brand founded by Jimmy Buffett, is an emerging cruise line backed by private equity firm Sycamore Partners. Since its launch in 2022, the company has expanded from a single vessel to a three-ship fleet by 2027, including the Margaritaville at Sea Paradise, Islander, and the newly acquired and refurbished Beachcomber, which will homeport in Miami beginning in January 2027. In August 2025, the Port and MVAS executed a Confirmation of Berthing Request, confirming an initial deployment of approximately 170 calls and forming the basis for the proposed long-term Agreement. The proposed Agreement formalizes those commitments and replaces the prior confirmation with a long-term contractual framework establishing preferential berthing rights and financial obligations. PortMiami is located within District 5, represented by Commissioner Vicki L. Lopez. The impact of this item is countywide as PortMiami is a regional asset and generates employment for residents throughout Miami-Dade County. Approval of this item will have a positive fiscal impact to the County of at least $23.15 million over the five-year term (FY 2027-FY 2031), derived from MVAS's use of berths and per-passenger unitary fees, subject to a three percent (3%) annual escalation. There is additional upside potential, as passenger volumes exceeding the MAG will generate incremental port fee revenues. The proposed Agreement includes a series of incentives designed to support passenger growth, operational efficiency, and year-round demand at the Port. Consistent with other cruise line agreements, these include a parking incentive based on MVAS's share of embarkations and a marketing incentive tied to achievement of the MAG. Due to the County's unique reassignment provision, MVAS may also receive either an operational incentive for a non-peak day or for evening vessel calls if applicable. The non-peak day and evening-call incentives provide a 50% reduction of applicable port fees for qualifying calls, help reduce traffic impacts on peak days and encourage more efficient utilization of terminal capacity. Only one operational incentive may apply per vessel call, and all incentives are structured so as not to reduce other fees payable to the County. These incentives are limited in scope and are expected to represent a relatively small portion of total revenues under the Agreement, which are primarily driven by the MAG. The Agreement is expected to generate approximately one million passenger movements and at least $23.15 million in guaranteed revenues over the five-year term, with additional upside from passenger volumes exceeding the Minimum Annual Guarantee (MAG). The Agreement also includes targeted incentives designed to support off-peak utilization, enhance terminal efficiency, reduce traffic impacts on peak days, and promote cruise demand from PortMiami. The term of the Agreement commences upon the first vessel call on January 9, 2027, through April 30, 2031, with two optional five-year renewal terms upon mutual agreement. PortMiami is one of America's busiest seaports, internationally recognized as the Cruise Capital of the World and the Cargo Gateway of the Americas. It contributes more than $61 billion annually to the local and state economy and supports 340,078 direct, indirect, and induced jobs. The Port's cruise sector continues to reach unprecedented levels, setting new passenger records year after year. With 10 state-of-the-art cruise terminals and a growing roster of leading cruise lines deploying their largest and most innovative vessels, PortMiami operates at an exceptional pace, reinforcing its position as the undisputed global leader in the cruise industry. This partnership supports PortMiami's (or Port) continued commitment to growth, diversification of cruise offerings, and efficient utilization of existing infrastructure, further reinforcing Miami-Dade County's position as the Cruise Capital of the World. This Agreement marks an important milestone for PortMiami, representing the first preferential berthing agreement with a new cruise line partner since the Port's 2019 agreement with Virgin Voyages. The proposed Agreement reflects a balanced approach that supports a new entrant to PortMiami cruise line-up while preserving the County's operational control, financial protections, and long-term strategic objectives. Commissioner Milan Orbis expressed appreciation for the revenue that the proposed resolution would generate and noted that she was glad the County was bringing another cruise line into the port. She stated that, in light of the issues currently facing the port, she wished to proceed with caution, and she asked the administration whether it was advisable for the County to enter into long-term agreements and grant berthing rights to new cruise lines. Mr. Wong explained that the barriers to entry in the cruise industry were significant and noted that the last major cruise line to begin operating at the seaport was Virgin Voyages. He advised that negotiations on the new contract had spanned nearly a year and described the agreement as notable in structure, consisting of a five-year term with two five-year renewal options. Mr. Wong stated that it was unique among the port's cruise agreements and would operate out of Terminal C. Following a point of order, Commissioner Gilbert III restated the question, and Mr. Wong confirmed that entering into the agreement was advisable. Commissioner Milan Orbis then asked whether he had any hesitation regarding the grant of berthing rights to a new cruise line, and Mr. Wong confirmed that he did not. Hearing no other discussion, the Committee proceeded to vote on the foregoing resolution, as presented.