TITLE
Recommendation to adopt resolution authorizing City of Long Beach to issue 2010 Refunding bonds in an amount not to exceed $35,000,000, to refund the outstanding 2002 Bonds, finance additional improvements to the Carnival Corporation’s leasehold interest, and installation of a shorepower facility. (District 2)
DISCUSSION
On November 20, 2002, the City issued $32,100,000 of Taxable Revenue Bonds for the Carnival Cruise Terminal Financing (2002 Taxable Bonds), at a rate of 7.625 percent, to finance various cruise ship terminal improvements to Carnival Corporation’s (Carnival) leasehold interest in the area around the Queen Mary. The improvements included cruise ship berth facilities, reconfiguration of the dome, construction of a ticketing area, and related facility improvements. These bonds were payable solely from tariff revenues generated from passenger embarkation and debarkation, and backed by Carnival’s corporate guaranty. Neither the full faith and credit nor taxing authority of the City is pledged to the bond repayment. If such tariff collections were insufficient to fully pay the debt service due, Carnival unconditionally guaranteed the obligation.
In 2008, Carnival commissioned an economic study by Professors Lisa M. Grobar and Joseph P. Magaddino of California State University, Long Beach. Carnival Cruise has had a significant positive impact to the local economy, as well as the entire State. In 2006, it was estimated that Carnival contributed $82.4 million to the California economy, with $78.3 million of these expenditures occurring in Los Angeles County. Additionally, the cruise passengers are direct contributors of hotel taxes and are users of other entertainment options in the City.
Carnival has requested the City issue new bonds in an amount not to exceed $35,000,000, at a potentially lower rate but at a minimum not to exceed 8 percent, to refund the outstanding 2002 Taxable Bonds, which would provide financing to enhance local t...
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