Assembly discusses ferry options

PALMER — There weren’t a whole lot of smiling faces around the table Tuesday as the Mat-Su Borough Assembly met to talk about its ferry problem.

The ferry, dubbed the M/V Susitna, is due to be handed over to the borough in October or December. Once it’s in the borough’s hands the borough crosses a threshold. Until now, its costs have been paid for either by the Navy, which built the ship as a prototype landing craft, or through grants. Once the borough holds the ferry’s pink slip, though, it will be spending its own money.

And that could be a lot of money.

There are no landings capable of loading and offloading cars either in Anchorage or Point MacKenzie. Meaning the big money-maker route for the ship is a no-go, at least for cars. Doing nothing with the ship will cost between $1.3 and $1.7 million to store it. Backing out of the whole thing puts the borough on the hook for $20 million in federal grants that would have to be repaid.

“The ferry can’t break even without vehicle traffic,” said Lew Madden, the borough’s representative on the ferry project and its co-inventor.

Perhaps the sternest voice was actually on the telephone, belonging to Assemblyman Ron Arvin, who’s currently working in China. When Madden said ferries almost never turn a profit, Arvin interrupted.

“The projections showed definitively that the ferry would make a profit. What’s changed today?” he asked.

Madden said the ferry could break even, but that the number of cars and riders it can carry was reduced over the course of the project as the Navy decided what it wanted on the ship.

“Does that give the borough a window?” Arvin said, wondering if maybe the borough could back out since the designs were changed.

Nope. The borough, Madden said, set the absolute lowest amount it would accept — 20 cars and 100 passengers — and this ship can carry almost exactly that — 20 cars and 134 passengers.

“In 2005, it looked like the most that the borough would ever carry,” Madden said. The idea at the time was that when the borough outgrew the ship it would buy a second bigger, but less fancy, one to make that Anchorage-Point MacKenzie run. “We would use this one to develop the economy farther down the inlet.”

Madden said there are people interested in the ship. Pac Rim Coal, for instance, wants to build a landing to use the ship in a potential mining operation in the Tyonek area. A borough press release put out after the meeting added three more: Shell Oil is interested in ferrying workers in the Arctic Ocean. There’s a guy in Kenai looking for $2 million to get a landing built there to bring in tourists and dipnetters. And Alaska Native corporation CIRI wants the ship to help put together its wind farm on Fire Island.

“It’s not all doom and gloom. It’s going to do what it is advertised to do,” Madden said.

As for what to do in the meantime, Assemblyman Mark Ewing asked the assembly to bear with him as he outlined an unorthodox solution. Maybe the borough should haul the ship out of the water and winter it on one of its vast stretches of land at Point MacKenzie. The idea of a giant trailer might seem ridiculous at first, Ewing said.

“We move drilling rigs on the North Slope that weigh three times this much,” he said, suggesting the borough put forward $500,000 for a firm willing to design a build something that could pull the ship from the water to be hosed off and stored.

Ships that aren’t in the water don’t cost as much to store since they don’t require a crew. Ewing said he thought the borough could save $1 million a year this way and put that money toward building the landings.

“I think that’s a very interesting idea,” Madden said. “That’s a fascinating concept.”

Port Commissioner Dave Cruz said that his company pulls tugboats out of the water all the time using air bags. The $50,000 bags can be used multiple times.

As for profitability if a route is ever established, Assemblyman Vern Halter did some quick math on proposed fares and came up with $1,400 a month if a person wanted to take the ship to commute to work.

Actually, the driver would ride free, Madden said. Still, that’s something like $1,000 per month.

“I would hope that their companies would pick up some of the fares,” he said.

Finally, the borough assembly directed manager John Moosey to look into eight aspects of the ferry situation.

• Costs of storing the ship for the winter, including out of the water at Point MacKenzie.

• Money for ferry landings.

• Evaluate the option of selling the ship and leasing it back from the purchaser. This option avoids potential maintenance as well as having to repay those grants.

• Put out a request for information on that option — essentially, a way to gauge interest and look at the dollars and cents.

• Look at the value of the intellectual property (i.e., the ships designs and patents and other research that went into it). The borough owns a half interest in the property.

• Get an updated cost-benefit analysis of the ferry.

• Figure out the value of the ferry to the port.

• Look into those grants and try to see exactly how much obligation the borough has.

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.