Monday, October 07, 2002 Carnival Cruising into L.B.   By Mark Edward Nero, Staff writer Tourism: Prevratil says new terminal will bring 300,000 to 500,000 visitors per year. LONG BEACH It's being built but will they come? That's the question facing the new Carnival Cruise Lines terminal currently under construction near the Queen Mary. And the answer, Joseph Prevratil says, is yes. Hundreds of thousands will come. With roughly six months left until the opening of the new Cruise Lines terminal, Prevratil, president of Queen's Seaport Development Inc., operator of the Queen Mary, is confident that even in a down economy, people will come. Prevratil's company is leasing the Queen Mary and surrounding area from the city of Long Beach. He in turn has sublet part of the property to Florida-based Carnival Cruise Lines, which will be relocating from a current terminal in San Pedro. An estimated 300,000 to 500,000 passengers have been projected by Carnival to pass through the terminal annually, a number Prevratil says is accurate. The facility is expected to cover up to 7.8 acres, including: a 1,250-vehicle parking structure; a 45,000- to 50,000-square-foot outdoor area containing food and beverage kiosks, as well as rest areas; and a 1,000-foot dock southeast of the ship. All of the features are currently under construction and are a few months away from being finished. "It's estimated to be complete in late March," Prevratil said. "And after it's complete, it's a matter of days" before it opens for business, he said. Complicating matters slightly is that QSDI's lease on the Queen Mary and surrounding property expires in December. Prevratil however, said that the company is currently in negotiations with the city on a new lease. Carnival is expected to start its Long Beach operations with two ships, giving the Queen Mary a couple of smaller companion vessels to keep her company. One of the ships will offer seven-day cruises and the other three- and four-day cruises. Eventually, the terminal may offer the same number of trips as the current San Pedro terminal. Among them: seven-day Mexican Riviera cruises; 14-day trips to the Panama Canal; and three-hour coastal tours. The cruise line, which is leaving a crowded San Pedro area, has signed a 25-year lease for the property and is to pay $204,000 annually to operate the facility, with that amount subject to renegotiation every five years. While the issue of rent has been settled, some aspects of the project's financing have not, particularly the issuance of millions in bond money. In January, the Long Beach City Council helped issue for Carnival a $35 million bond to aid in construction costs. The bond was to be repaid through a $6.33 tariff charged to passengers. That would amount to a minimum of $1.89 million to $3.1 million a year, based on the estimate of 300,000 to 500,000 passengers annually. Another bond, for $23 million, was separately approved by the council in order for QSDI to refinance its current debt and provide the funding for necessary capital improvements. However, neither bond has been sold. "The bonds still need to be sold, then the tariffs can be placed," Prevratil said. The Queen Mary complex particularly needs a new revenue generator in the wake of the area's partial loss of the Catalina Express shuttles, which had operated next to the ship for several years. Catalina Express signed a $5 million lease in May for 20,000 square feet of space at Catalina Landing, across the river from the Queen Mary, at 320 Golden Shore. Catalina Express, which previously operated its one-hour shuttles to Catalina from an operations center next to the Queen Mary, now only offers Friday through Sunday service from the location. Despite the difficulties and headaches involved in the project, Prevratil believes it will all be worth it in the end. "The Queen Mary is pleased to have Carnival here," he said.