Long Beach and the Port of Los Angeles are in engaged in a tug of war over Carnival Cruise Lines, which announced last year it was leaving Los Angeles to build its own terminal next to the Queen Mary.

But far from giving in, L.A. officials are offering new incentives to woo Carnival, which operates two cruise ships that account for nearly half the port’s cruise business, to stay in San Pedro.

The port is promising to spend $10 million to transform its out-of-date cruise terminal into a more attractive and convenient spot where travelers leaving on vacation can disembark easily. The port is taking bids for the terminal overhaul, which could begin as early as September.

“We are looking for a bright future,” said Larry A. Keller, executive director of the Port of Los Angeles.

Keller said port officials were in Florida three weeks ago to negotiate with Miami-based Carnival Cruise Lines about continuing to use the port’s facilities.

“They have expressed an ongoing interest in the port,” Keller said. “We’re not certain if it would be part-time or full-time. They are not in a hurry to make that plain to us.”

But Carnival, which recently settled an environmental lawsuit by the Long Beach chapter of the Surfrider Foundation that was blocking the project, said it would be breaking ground on the Long Beach site in late August or early September. Completion is scheduled for December 2002.

“We are going forward with our Long Beach project,” said Carnival spokeswoman Jennifer de la Cruz, noting that Carnival will only be able to dock one cruise ship at a time in Long Beach. Carnival is talking to the L.A. port about using its facilities when the need arises for two of its cruise ships to dock in the area.

Insiders have noted that construction costs on the five-story Carnival parking structure close to the Queen Mary are more expensive than originally calculated, which has led to speculation that Carnival would reconsider the project.

Queen Mary officials deny that. Joseph Prevatil, president and chief executive of Queen’s Seaport Development Inc., which operates the Queen Mary, said costs for the 1,250-car parking structure have only marginally risen.

“We are going through some value engineering right now,” Prevatil said. “The only differences from the original design is the kind of cosmetics it will have to make it look more attractive.”

With a $15 million price tag, the parking structure is a major component of the $35 million Carnival Cruise Lines project. Another $16 million is allotted for the pier next to the Queen Mary and an embarkation facility inside the geodesic dome that once housed the Spruce Goose, an enormous wooden plane built by Howard Hughes during World War II.

Carnival Cruise Lines announced it was leaving L.A. because the port’s facilities are antiquated and Long Beach offered a better venue for its passengers, who could tour the Queen Mary and the Aquarium of the Pacific while waiting to board.

Los Angeles, to be sure, is not a top-tier cruise port. In a survey conducted by the San Pedro Business Improvement District a few years ago, cruise operators ranked L.A. near the bottom of the list of ports. They said it was too industrial and didn’t encourage passengers to wander far from ship.

With that in mind, the port is trying to spiff up Ports of Call, a tourist-oriented commercial village next to the port.

The port will also redesign its two-story cruise terminal according to suggestions made by Carnival and other operators. Passengers would disembark and check in baggage on the same level. Currently buses and cars drop passengers off at the upper level and then drive to the lower level to check in.

Also Princess Cruise Lines is returning to the Port of L.A. early next year with a new ship called the Star Princess. A 2,600-passenger ship that cost $460 million to build, the Star Princess will be sailing to Mexico from L.A. starting next March.

In the meantime, the Sea Princess, a smaller ship that carries 1,900 passengers, is scheduled to begin sailing to Mexico in September. “There is all this movement and business has grown,” Keller said. But Carnival, which recently settled an environmental lawsuit by the Long Beach chapter of the Surfrider Foundation that was blocking the project, said it would be breaking ground on the Long Beach site in late August or early September. Completion is scheduled for December 2002.

In the meantime, the Sea Princess, a smaller ship that carries 1,900 passengers, is scheduled to begin sailing to Mexico in September.