Bile on the Isle

The wild fight between an entrepreneur and the Galveston port for loot from cruise-ship lots

Passengers from a cruise ship had more than the usual sailing stories to share as they returned to the Galveston Waterfront Ventures parking lot near the Port of Galveston's two cruise terminals.

Lot employees Jocelyn Howell and Tiffany Robledo heard some of their customers tell that a soon-to-be-demolished grain elevator was crumbling, sending debris cascading to the roadway near Harborside Drive. To document the apparent safety hazard, the workers grabbed a camera and drove off in Howell's Ford pickup to the aging elevator on port property.

They expected to get videotape of the fallen rubble -- it was the handcuffs that turned out to be the surprise.

Jocelyn Howell and Tiffany and Sylvia Robledo have risked arrest in their efforts to establish a private parking service.
Greg Barr
Jocelyn Howell and Tiffany and Sylvia Robledo have risked arrest in their efforts to establish a private parking service.

At about 1:30 p.m. on that July 5, two port police vehicles approached the 18-year-olds, even though there was no restricted access to the elevator area. Cops stopped the young women's truck and slapped the cuffs on Robledo for about ten minutes. An officer issued a warning ticket for criminal trespass, and police sent the two teens home -- only after confiscating their videotape.

One day later, Sylvia Robledo -- the parking lot's operations manager and mother of Tiffany -- and Howell were helping their customers inside the cruise terminal get in line to board buses back to the parking lot.

Howell saw a now-familiar figure approaching. He was the same cop who had ticketed her the previous day. Howell says the officer voiced surprise that she was even on port property after the previous day's confrontation. This time, she was the recipient of the steel bracelets.

"He put the cuffs on me for about 30 minutes, said I was under arrest several times, then said I was only detained," says Howell. Meanwhile, Sylvia Robledo was on the phone with the lot owner and his attorney, trying to diffuse the situation.

The two young women had briefly become POWs of sorts in the escalating battle of the parking lots being waged around the popular Galveston terminal complex.

What started 12 months ago as a skirmish over a share of the island's lucrative cruise-ship parking business has morphed into a complex standoff involving accusations of police interference, a foot-high pile of court documents, a disputed 20-foot easement of railway line, lobbying by a state senator, clandestine camera work and boatloads of verbal sniping.


Like buccaneers of old, the opposing parties both target the not-so-hidden treasures of Galveston's booming cruise industry. Passenger ships began arriving in the fall of 2000, and the industry now regards the city as one of the fastest-growing markets in the United States. It is quickly closing in on cruise stalwart Tampa, Florida, in numbers of passengers served.

The cruise industry pumped an estimated $445 million worth of economic benefits into Texas in 2002. The port budget states that it brought in $2.8 million in parking revenue last year.

Galveston is regarded by the industry as a "drive-to" destination because of its proximity to major metropolitan areas. By the end of this month, some 350,000 passengers will have embarked on cruises from the Port of Galveston. That translates into hundreds of vehicles regularly snaking their way down Harborside Drive toward the two port-owned cruise-ship terminals. Cars are parked from four to 12 days at rates ranging from $45 to $90.

"The growth was so phenomenal, it caught everyone by surprise," says port director Stephen Cernak. "We were scrambling to secure more parking capacity while the growth was occurring."

Cernak says the port last year was trying to acquire a site for parking near Harborside at 33rd Street, although its competitor "was a step ahead and bought it."

Businessman Tom Flanagan, a Beaumont developer and owner of J.J. Flanagan Shipping, scooped up the property to launch his Galveston Waterfront Ventures parking enterprise, popularly known as the Dolphin lots. His shipping business earlier snared a lucrative stevedoring contract with Carnival and Royal Caribbean lines to handle their passenger baggage and ships' stores on the docks.

On January 3, GWV and its 25 employees opened a two-acre, 350-space Dolphin Cruise Ship Parking facility, about eight blocks from the cruise terminals on 25th Street. GWV subsequently expanded operations to a second, smaller location at 29th and Harborside.

It appeared to be a textbook case for free enterprise: a savvy entrepreneur outperforming a public agency operation.

The parking lots that the port runs require passengers to first drive to the terminal and unload baggage. Then customers have to drive back to the port lot, then catch a shuttle bus to return and board the ship. Flanagan offered one-stop service -- Dolphin patrons merely drive into a parking space, then load themselves and their baggage on the shuttle bus for the trip to the ship.

"The port's approach just didn't seem so customer-friendly, and we didn't think people would want to drop off their bags and maybe leave their wife or elderly parent alone while they went back to park and then wait for the bus to come back," says Flanagan. "The port saw us as a threat and has been after us ever since. They consider us parasites."

While the port hasn't used the word "parasites" against the private parking company, it has accused the business in a lawsuit of effectively poaching on its property.


Just like parking companies soliciting the motorists heading to Houston's Bush Intercontinental Airport, location can be paramount for profits in Galveston's cruise-parking battle.

Flanagan seemed to score a major competitive coup when he gained the real estate to route customers to his westside lot from the main traffic artery of Harborside. That meant that cruise passengers heading to the terminals would see his Dolphin lot as the first entrance for parking -- raising the probability of his snagging them as customers.

Court documents show that to open Harborside access to one of his lots, Flanagan signed a $2,000-a-month lease with Farmer's Copper & Marine for adjoining property. However, the final link for the access took him to the courthouse as well as to the lot. Flanagan repaved a crossing over a 20-foot-wide railway track on the leased land. The rail line was seldom used, although it had been deeded to the City of Galveston in 1982, and therefore was in possession of the port, it claimed.

So the port sued, alleging the parking company was trespassing on the property, because it had not received permission to use that land.

The port's Cernak insists the lawsuit has nothing to do with competition and everything to do with liability.

"This is the United States and it was created under a free enterprise system. We really don't have a problem with the competition and we're not about stifling competition like [Flanagan] has alleged," Cernak says.

He insists that Flanagan ignored warnings of litigation if he pushed ahead with plans to repave the rail crossing, and that liability is the central issue. "That 20-foot-strip of property isn't his, it's mine," Cernak says, meaning it belongs to the port. There are plans to increase usage of the train tracks, he says, believing that the parking company would try to duck responsibility in the event of a lawsuit over an accident.

"I would be willing to venture that he would say, 'It's not my problem, I don't own that land, go after the port,' even though he paved the road there."

State District Judge Norma Venso agreed with some of the port's arguments last spring, granting a partial summary judgment that blocks the company or passengers from crossing the tracks. The Dolphin lot workers now route customers through the lot's eastside entrance off 33rd Street, although the court ruling has hardly quelled the controversies.

Flanagan has countersued, contending that the port has violated antitrust laws and equal-protection safeguards in harassing a legitimate private business venture.

Another showdown looms for the start of 2004, when the port intends to begin enforcing its recently enacted fees for commercial vehicles using the port.

An initial licensing fee of $250 will be charged, along with $50 for annual renewals, plus a $10 fee per trip for passenger buses or hotel courtesy vans. Taxis and limousines will not pay per-trip fees, but will be charged a onetime annual decal fee of $7.50 and $10, respectively.

"From what we know of [Flanagan's] vehicle trips, his access charges will be about $70,000 a year in round numbers," Cernak says. "He hasn't had to pay one cent of the tariff because of the litigation, but we intend to enforce it on January 1." While the parking company sees the charges as further indication of harassment, the port director defends the fees as necessary to cover port-related transportation and security expenses. Rates are similar to those charged by airports and other cruise terminals, he says.

At the threat from the initial fee proposal, Flanagan enlisted the help of state Senator Kyle Janek, who sponsored a bill that would have outlawed the access charges for shuttle buses and other vehicles delivering passengers to the cruise terminal. Intense lobbying from the port and Galveston Mayor Roger Quiroga led to the bill's eventual demise in the last regular legislative session.

"This tariff would make it impossible for us to conduct business, which is blatantly unfair," Flanagan says, alluding to it as another attempt by the port to create a monopoly. "Janek was a politician who saw what was happening and didn't ride the fence. He saw it as Galveston politics at its worst."

Other governmental entities have joined in the fray. City officials threatened to step up enforcement efforts against what the port contended were infractions of the sign ordinance by Dolphin lot workers. They decried Flanagan's marketing, which included using dolphin costumes and banners to help entice customers to those lots.

"You don't see people out by Bush airport waving flags at people," Cernak says, as if cruise-ship passengers prefer somber settings. "He's entitled to do what he can to stay in business, but just do it fairly."

While port officials take offense at the gimmicks used by the Dolphin crews to hustle business, the company claims those efforts are nothing compared to what the port has done to deliver customers: used its own police to draw them in.


Attorneys for the Dolphin lots managed to get Robledo's seized videotape back from the port, and another videotape shows an official port police vehicle is parked in the middle of Harborside, just across from a Dolphin lot. Its emergency lights are blazing. Dolphin representatives say the officer is blocking the street to prevent customers from getting to the private parking lot, and he is directing that same traffic down Old Port Industrial Road, to the port-operated lot.

"I believe the use of police power by the port is inappropriate, and I have witnessed this," says Tim Beeton, newly appointed attorney for the company. "Recently some of his employees on Harborside Drive, holding signs advertising the parking lots, were threatened by DPS officers, and so who do you think is making the calls to DPS? I just want the port to compete fairly here."

Tony Brown, the port's lawyer, says there has never been any intent by police to divert traffic to port lots and away from the Dolphin facility. "It's necessary for the port police to regulate traffic on those days" when a cruise ship's in port "because traffic is heavy in that area." Port officials also contend that Dolphin has used off-duty officers to entice customers to those lots.

Several other issues are similarly argued in the dispute, which is headed toward another court date in late January, when Flanagan is expected to present his case that the port is trying to run him out of business.

Beeton says he hopes their differences can move beyond the heated rhetoric. "I think everyone has gotten hot under the collar and we need to finally address this whole thing in a reasonable way." The company has met with city signage officials to try to resolve differences there.

"We want our day in court," Cernak says. "Look, we want to get on with life here. Believe me, we have bigger issues here at the port than competition for parking."

The port, meanwhile, has plans in early 2004 to develop an area adjacent to the terminals for parking, in order to streamline the service for customers. "The bottom line is that with or without competition, we have to do a much better job of serving our cruise-ship customers, so there will be parking in front of the cruise terminal," Cernak says. "I'm sure we'll be accused of doing it only to put [Flanagan] out of business."

That's the one port observation that draws agreement from Flanagan. "These heavy-handed tactics by the port certainly [don't] make this feel like the United States of America," he says. "...I think the public has to be made aware that the port is playing this game by using their resources and taxpayers' money to attack private citizens in this day and age."

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