America World City Pushes to Resurrect Plans for 265,000-Ton Ship
By Theresa Norton Masek
August 30, 2012 10:18 PM
America World City, promoters of a planned 265,000-ton ship with three hotel towers, a dream of a city-at-sea first promoted decades ago by cruise visionary Knut Kloster, have gone public in their efforts to secure $1.4 billion in federal loan guarantees to build the vessel in the U.S. The campaign was started because the U.S. Maritime Administration (MARAD) in May rejected the latest efforts by the company for the loan guarantees, saying it no longer finances overnight passenger vessels.
America World City is envisioned as a 1,268-foot-long “mother ship” with a marina built into its hull and four 400-passenger day cruisers that would shuttle passengers to and from destinations within a 50-mile radius. Passengers would be able to check in and out at will, when feasible, rather than staying onboard for a week or predetermined length of time.
The ship would have 2,800 guest rooms and suites; 2,600 American officers, crew, and hotel staff; 60,000 square feet of meeting and conference space; a sports complex; six swimming pools; 17 restaurants; dozens of bars, bistros and cafes; 30 shops and boutiques; a library, museum and art gallery; a 2,000-seat theater; several cabarets and nightclubs; the world’s largest seagoing casino; and a medical complex and wellness center.
When it was first announced -- and when the application for federal loan guarantees was filed in 1995 -- the project seemed like a pie-in-the-sky dream. But now its scale is no longer out of proportion, as the size of cruise ships has grown over the years. Today, the world’s largest cruise ships, Royal Caribbean International’s Oasis and Allure of the Seas, are 225,000 tons in size.
Through the years, key proponents of America World City have continued to push the plan, trying to resurrect the federal loan guarantee application even after the financing for U.S.-built ships went to American Classic Voyages, which planned to build two vessels in Mississippi but collapsed shortly after the 9/11 terrorist attacks.
Stephanie Gallagher, who started in 1984 with the company formed to build the project, and now is its president and primary owner, is taking her campaign to the public to coincide with the presidential election. “We’re trying to get attention from both Obama and Romney, saying ‘here’s something to take a look at it, it could reignite the American can-do spirit,’ ” she said. “It doesn’t cost taxpayers anything, and the risk is totally managed, so it’s something to at least consider.”
According to Gallagher, the kicker was MARAD’s rejection in the spring of her efforts to reinstate the application for the loan guarantees. she supplied Travel Pulse with a letter dated April 11 from MARAD Administrator David Matsuda that says, “The Department [of Transportation] has adopted a policy prohibiting MARAD from financing overnight passenger vessels under 46 USC Chapter 537. This policy is based on MARAD’s long history with troubled passenger vessel projects. The Government also has a policy against funding gambling projects, which appears to be an essential part of your business plan.” The letter says a new application can be filed, but adds that the Title XI program that oversees such financing can only guarantee about $350 million.
Gallagher wonders why the federal government won’t assist a plan to create jobs and help the country re-enter the shipbuilding and cruise industries with a U.S.-flagged ship and all-American crew. “The whole purpose of Title XI is to make it possible for American ship owners to obtain long-term financing on terms and conditions and at interest rates comparable to those available to large corporations,” Gallagher said in an open letter to President Obama. “And the whole purpose of that, of course, is to support job creation, not only in shipbuilding and supply, but in operating ships under the American flag. Except for small coastwise vessels and riverboats, none of the 200-plus ocean-going cruise ships operating in the North American cruise market were built here, none hire American officers or crew, and none pay U.S. income tax on their multi-billion dollar annual profits—unlike every other U.S. hospitality organization.”
America World City said the lack of response goes back through both Republican and Democratic administrations. “For decades, both sides of the aisle have been major recipients of the foreign-flag lobby largesse and, for the most part, have closed their eyes to this unfair situation,” Gallagher said.
America World City’s letter to Obama ends with a request that the administration “not only reverse this shocking anti-American policy, but instruct MARAD/DOT to reinstate World City’s fully reviewed, economically sound Title XI application that was terminated without cause, and theoretically ‘without prejudice,’ after the disgraceful American Classic Voyages Title XI fiasco—that was MARAD’s own doing—and which cost the American taxpayers over $500 million.”
America World City would be built in hull and hotel modules constructed on multiple sites in the U.S., the company says. “The hull modules and machinery sections of America World City are well within the technical capability of several U.S. commercial shipyards, but the United States has not built a major passenger ship in over 60 years,” according to the company website. “Therefore, the complex hotel construction and highly detailed interior outfitting of the city-ship will be undertaken — to marine standards and specifications — by a leading hotel builder who has worked extensively with the U.S. Coast Guard and the American Bureau of Shipping to qualify for this marine-specific contract. Similarly, the complex assembly of hull modules will be undertaken by a leading offshore contractor, Kiewit Offshore Services, based in Corpus Christi, Texas.”
Gallagher also said America World City has asked international insurance broker Marsh Inc. to conduct an extensive review of this production plan. As a result, Marsh offered World City a financial protection program that guarantees that the ship will be built on time and on budget, Gallagher said. Travel Pulse asked Cruise Lines International Association (CLIA) to comment on the situation with MARAD but did not hear back by press time.