Ferry, ferry quite contrary

Ferry update, November 24:

Rochester’s
ferry crisis kicked into high gear on Wednesday, when two companies that
financed the boat began foreclosure proceedings.

A very
possible outcome: A court will permit the lenders — ABN AMRO Bank and EFIC
(the Export Finance and Insurance Corp.) to take the boat and sell it to recoup
the $31.5 million they have loaned the ferry’s owner and operator, Canadian
American Transit System.

There’s
still the possibility that the ferry will stay in Rochester,
taken over by the City of Rochester
— or even kept and operated by CATS. But the foreclosure certainly moved the
ship into very troubled waters.

“This makes
what the city is trying to do even more urgent,” said the city’s corporation
counsel, Linda Kingsley. CATS, said Kingsley, has three options: “They can
very, very quickly come up with sufficient private investors to save their
operation. They can start negotiating on what was a fair deal, for the city to
buy the boat. Or they can let it go in foreclosure. It’s really in their hands
right now.”

The city,
said Kingsley, will continue to pursue its plan to create a public authority to
buy the ferry. But, she said, “it will become a much
more rushed process.”

And
although the city would attempt to buy the boat in a foreclosure sale, said Kingley, “there is no guarantee that someone else might not
outbid us. And then there goes the boat and all that public money that’s been
put in.”

“I truly
believe that if we’re not well on our way to solving this problem by the end of
December, we will not be able to save the boat.”

EFIC, said
Kingsley, “has made no secret that they would prefer to solve the problem here,”
with either CATS or the city. “It’s not a joy for them to go through
foreclosure and move the boat,” she said.

But, she
said, “they see time passing, and they see no progress from CATS. We’ve told
them that we’ve made CATS an offer and that they rejected it.”

The city’s
plan must be approved by city council — and the state legislature must
approve establishing the public authority. And some local legislators have
expressed concern about the plan.

Might EFIC officials
be as worried about the city’s possibilities as they are about CATS?

“They’ve
got a right to be concerned,” said Kingley. “There
are obviously some dissenting opinions out there.”

If the
public authority is a roadblock, could the city assume control of the ferry any
other way? “We’re looking at what other means there are, if any,” said Kingley.

The background

Another bombshell in the story of Rochester’s Fast Ferry
dropped last week, when Mayor Bill Johnson announced that the city wants the state
to create a public authority that would buy the ferry and resume its service.

The ferry’s owners, Canadian American Transit Systems, ran
out of money and abruptly shut service down in September after only two months
of operation. Now the ferry sits moored beside its terminal in Charlotte,
impounded (“arrested,” says Johnson) because of CATS’ debts to fuel companies
and other providers.

Since the shutdown, CATS has tried to come up with
refinancing plans that would satisfy its principal lenders. But the lenders —
including the city —have rejected those plans. And while there has been talk
of some local private investment, it hasn’t materialized.

Now, Johnson says, the situation is critical. If there isn’t
a viable plan to resume service soon, he says, the senior lender —
Australia’s Export and Finance Insurance Corp. (EFIC) — will sell the boat to
recoup its money. And with no other plan pending, the city is moving —
aggressively.

But the city’s proposal doesn’t sit well with CATS. The
company could be out of the ferry business entirely if the city’s proposal
becomes a reality, even though Johnson says he’d like to maintain CATS’ service
infrastructure and resources.“Why
would we waste our time replicating that when it’s already there?” Johnson
says.

Tension between the city and CATS escalated late last week,
when CATS CEO Cornel Martin accused the city of pirating elements of CATS’
business proposals for its own plans. Johnson responded by urging CATS to
disclose its business plans to the public. “I don’t think they should stand
behind anonymity and continue to make these false allegations,” he says.

Meanwhile, in Toronto, a permanent ferry terminal will be in
place by the end of January. “We’re all thrilled up here,” says Toronto Port
Authority Chief of Operations and Engineering Ken Lundy of the city’s proposal
to resume ferry service.

And Congresswoman Louise Slaughter says all the red tape
that led to CATS paying exorbitant pilotage and Canadian Customs fees, and
prevented the ferry from transporting commercial trucks, has been removed.

In interviews with City,
Johnson and CATS founder Dominick Delucia discussed the ferry’s status.