The City Council on Oct. 7 unanimously authorized the city manager to execute a preferential access agreement with the Magical Cruise Company Ltd. The company does business as Disney Cruise Line.
The vote was unanimous.
Background
“During the February 18, 2025 City Council Meeting, the City authorized the City Manager to execute a Term Sheet with Magical Cruise Company Ltd, dba Disney Cruise Lines. The City Council additionally authorized the City Manager to negotiate an Agreement with Disney Cruise Lines incorporating the terms as set forth in the approved Term Sheet., according to the staff report by City Manager David Maistros.
“At this time, negotiations with Disney Cruise Lines have resulted in an agreement addressing and incorporating all of the relevant terms previously established. Staff recommends authorizing the City Manager to execute a Preferred Access Agreement with Disney Cruise Lines with the following terms,” Maistros wrote.
“—Initial term length of five years commencing upon execution of the Agreement and ending September 14, 2030, with two additional five-year renewal options.
“—Preferential scheduling for Saturdays and Tuesdays during the ‘Peak Season’.
(September 15 to May 15).
“—Preferential scheduling for Tuesdays during the ‘Summer Season’ (May 16 to September 14).
“—Disney Cruise Lines proposes to remit a Cruise Line Fee equal to the City Wharfage Rate plus an additional Passenger Service Charge equal to twenty percent (20%) of the Wharfage Rate for each passenger on the manifest as consideration for preferential scheduling.
“This rate will be subject to annual adjustments equal to 2.5% per year. – Disney Cruise Lines shall guarantee a minimum of 120,000 passenger visits to the City per year,” Maistros wrote.
“In the event of a shortfall in any given year, Disney Cruise Lines will remit payment at the current wharfage rate plus the applicable ‘Passenger Service Charge’ set forth in the Agreement,” Maistros wrote.
“At this time, Disney Cruise Lines has two vessels on the West Coast — Disney Magic and Disney Wonder. Both vessels have a maximum passenger capacity of approximately 3,000 passengers,” Maistros wrote.
“Though the capacity of these vessels is significantly less than the capacity of other cruise ships that currently visit Avalon, the proposed increased wharfage rate and Passenger Service Fee is anticipated to offset any potential loss of wharfage revenue associated with diminished passenger counts,” Maistros wrote.
“Additionally, smaller capacity ships may provide an overall more enjoyable experience for passengers as well as other Island visitors and residents. The reduced crowds will result in less congestion, greater activity opportunities, and quicker queuing at the Cabrillo Mole,” Maistros wrote.
“Staff anticipate the action may have a net neutral effect on future fiscal year wharfage revenue projections,” Maistros wrote.
