Cruising to the Bottom Line

Promises, Promises

You would think that an almost 100-fold increase in cruise-ship passenger traffic (from 6,600 to 550,000) since 1999 would leave a big economic impression on the Market. But, Market businesses do not report similar growth.

During and after the $50 million cruise- ship dock and terminal expansion the Port of Seattle promoted the cruise-ship industry as a regional engine of commerce and wealth creation. In 2003 it reported that each cruise ship landing would produce "$750,000 of business revenue to the local economy."

Similar rosy projections by city officials and civic leaders championing public investments in Safeco and Quest fields were made in the recent past. One consistent promise was the beneficial impact on the tattered and boozy economy of Pioneer Square. Both teams are fully settled in their new stadia now, but the city is still marshalling resources to spruce up Pioneer Square. So much for urban improvement via professional sports.

The $75 million dollar Key Arena retrofit for the Sonics was supposed to benefit the Seattle Center. Now the Sonics are looking for another site, and the Center is facing a $9 million deficit with $2 million in current losses from flat ticket sales, vacant luxury boxes and reduced parking revenue.

Is the cruise-ship promise becoming another case of buyer's remorse like our three major public investments in sports stadia?

Port of Seattle spent more than $50 million to construct docks and terminals for this rise in cruise traffic and will lose money for some time until the investment is paid off. But Seattle isn't the only Northwest city whose reach exceeded its gasp. Victoria, B.C., also hosting greater cruise traffic, concluded last winter that the hype for spending was three times greater than reality.

(Full disclosure: Of course, the Pike Place Market benefited from great infusions of public money in the 1970s and wouldn't be the quasi-public success it is today without it. Then the reason was preservation of a local institution composed of hundreds of farmers, small businesses and residents, not the enrichment of single entity sport corporations or home-grown billionaires.)

The Numbers, More Numbers

The Port of Seattle commissioned a Pennsylvania firm to run the numbers on the regional economic impact of the growing cruise ship activity for 2003. The numbers are impressive: $124 million annual business revenue, 1,072 new jobs, $3.8 million annual state and local taxes. All that from 99 vessel landings, carrying 345,000 passengers. Dramatic increases in 2004, with four homeport cruise lines operating, will pump those numbers up more.

Direct comparisons of the numbers in the Berk Report ("A Business, Economic and Public Policy Assessment of the PDA's Properties," January 2004) of the financial impact of the Market on Seattle's economy are not possible. The Port was studying regional impacts and their jobs creation for five month runs in 2003. Yet, it is apparent that the economic impact of the Market and the cruise ships in 2003 were roughly equal. By the end of 2004, however, the cruise-ship dollar footprint will be nearly double that of the Market.

The chandlers and suppliers of the ships are local wholesalers, not Market-based suppliers. However, a cooperative of enterprising Market flower farmers might consider the wholesale supply possibilities for a cruise-ship season that matches their crop seasons.

There are some hidden costs for this cruise-ship traffic growth. Faster ships, carrying 3,000 to 5,000 passengers and crew, make possible round trips to Alaska in a week. The cultural impact on small Alaskan native villages is huge and worrisome to many.

Environmentalists and Puget Sound health monitors are wary of the benefits, too. These great floating towns can (and do) discharge their waste water when the ship is running faster than 6 knots and a mile from berth - watch out Golden Gardens. They can discharge sludge when 12 miles out, per a memorandum of understanding with the Washington State Department of Ecology.

The Market Report

But it is hard to find a merchant in the Market who sees much of the $750,000 that each homeport call is said to add to the local economy.

Debbie Barett, at Cibola, which sells natural fiber clothing, says the cruise business produces "some actual customers, but, really, the difference from 2003 is small to none. No overwhelming change."

John Kerkisnani, at the House of Silver & Gold, reflects that "business is good, but cruise ships do not make any difference. August is always our best month, but 2004 numbers are down more than 10 percent from 2003."

Barbara Matteson, jeweler and authoress of Mystic Minerals, expresses the general feeling of the crafts line. "Some cruise passengers do come back after the cruise, and the increase in foot traffic is a positive factor."

The Perennial Tea Room sees afternoon traffic increased by one-third.

"We can be full constantly between 4 and 6 p.m., when the ships are in," said Sue Zuegeo-owner. The business keeps tight records and reports sales up only 3 percent midway through this cruise season. So, like the crafts line, increased traffic does not necessarily produce increased sales.

Yet, Brian Lo Priore finds his late-week cafe sales at Lo Priore Brothers up 30 percent and appreciates the interesting people the cruise ships bring to the Market. On the other hand the new business may be entirely due to his newly introduced sandwich, The Stromboli.

The cruise season corresponds with the Market's best months but the impact, despite the numbers, seem to be absorbed and dissipated in the crowds of summer.

Paul Dunn can be contacted at:[[In-content Ad]]