Rochester mayor throws ferry a lifeline

Bond issue would provide financing for U.S. city to take over failed venture


By*JAMES RUSK

UPDATED AT 1:59 PM EST
Friday, Nov 19, 2004


Rochester Mayor William Johnson is trying to relaunch the Rochester-Toronto ferry as a public venture.

Mr. Johnson unveiled a proposal yesterday to create a city-owned public authority, the Rochester Port and Ferry Authority, that would take over the ferry's operations after raising the money needed to refinance it by selling bonds.


In an interview, the mayor said that he has been discussing the plan for the last several weeks with Rochester councillors, state legislators, the governor of New York, and officials in Toronto, including Mayor David Miller and the Toronto Port Authority.


"We got enough of a signal that, without all the fine details that we still were putting together, they said: 'This is something to be pursued,' " Mr. Johnson said.


The ferry, the Spirit of Ontario, was closed down abruptly on Sept. 7, after about 80 days of operation and 140,000 passengers, when its private backers ran out of money.


Mr. Johnson said the original operators have been unable to come up with the financing to get the ferry back in business next spring.


"We're here because they tried first to find new sources of capital. . . . They didn't have a lot of luck with that, and the private capital that did materialize . . . all had huge contingencies," the mayor said.


He said that even though he proposes to turn the venture over to a public authority, taxpayer support would not be needed to keep the ferry going under the business plan that he has developed.


"Our idea was to look at this and see if this ferry venture was self-sufficient," he said.


In his view, the ferry service would be self-sufficient, with lower costs. Because it would be financed by long-term bonds, debt service charges would be lower than those faced by a private operator, and there would be no need to make a profit.


The mayor said he hopes the plan will win the support of Rochester Council in the next couple of months, and that the state legislature, whose approval is required for the creation of a new agency, will give the plan its blessing by some time in February.


If that timetable is met, he thinks that the new agency could get its bonds to market in time for the ferry to resume service next April.

The Mayor of Rochester is just trying to save face after spending $100 million US dollars on the ferry docks.

I was never a big fan of this and will be disapointed if the ferry resumes operation.

The link to Rochester has yet to do any actual good for Toronto and most likely will not in the future.

Hey, let's not be so small town that we need to see a plus side for Toronto-- as long as there is no massive down side. Hey, if people from Toronto want to shave a hour or more off the travel time to NYC, then, what's wrong with that?
Further, I bet the view on the approach on the boat into Toronto is quite something!

Our dock will be very Toronto -- a cheap ass, pre fab building. Ideal for cheap out Toronto. I agree, if Hommer J Simpson's complaint is that we ought not blow our brains out on a fancy terminal.

I think it makes more sense as a public venture... hey, what a Canadian thing to do... Let the government run it! Then it won't matter if it loses money :)

anyway, I hope the ferry resumes operation.

140,000 passengers in 80 days? Thats not a lot at all... very dissappointing.

Don't expect much from the Port Authority...they never had any interest in doing anything for Toronto period...I'm totally behind Miller's quest to obliterate those useless fuckers off the face of the earth.

And I agree with Are Be...it doesn't matter if the Toronto-Rochester Ferry wasn't the biggest thing since sliced bread...it had only a positive effect for Toronto...it's always a game of inches, and the ferry was a few inches.

In fact, I think ferry service all over the Great Lakes has a good future....especially if the Niagara Region takes off as the new Mississauga.






KGB

I also like the idea of the ferry. The approach to Toronto would be staggeringly magnificent--as close to an ocean-crossing type of experience as one could get without, well, er, crossing an ocean.

^ Would a public private partnership work better? Once it's profitable, it could be privatized. Or Maybe Rochester should invest in incentives attracting new investment partners.

Ferry service as public transit throughout Golden Horseshoe will definitely help relieve the expressways.

Hahaha suckers.

Well, the problem is, there really isn't anyplace to go nearby....there isn't much on the NY side...no slight to Rochester, but it simply isn't that attractive a destination...and it's not even on the lake. Hamilton or Oakville is too close...you would just drive down the road...Kingston is allright, but not that big of a draw either. Niagara has numerous interesting attractions (wine country, NOTL & Shaw), but I think it's still not quite there yet.

Now Montreal or Que City? That would be ok...I'd much rather take a leisurley, luxury boat trip there...it might take a bit longer, but I'm all about the getting there.






KGB

I don't have any real complaints as long as the government doesn't go blowing money on it because as KGB said, Rochester is not an attractive destination. The only reason to use it really is to try to get to NYC or other parts of the US alittle faster than driving.

For me, the only reason that I would go to Rochester would be to see the abandoned subway.

That sounds so COOL! I would come halfway across the world to see an abandoned subway!!!
Have they restored it as a museum or is it just left as it was? I prefer it left as it was, its more creepy. There are many parts of the London underground that are abandoned but they dont do tours (thanks to bloody EU health and safety guidelines :rant: ). To tour round an abandoned subway would be a truly unique opportunity.

I also like the idea of the ferry. The approach to Toronto would be staggeringly magnificent--as close to an ocean-crossing type of experience as one could get without, well, er, crossing an ocean.

hey, you've given me an idea..... let us borrow the Statue Of Liberty. We'll stick her on the Toronto Islands, so when the hoardes of Americans come across to escape, they'll feel welcome!

haw haw, bad joke ;)

That sounds so COOL! I would come halfway across the world to see an abandoned subway!!!
Have they restored it as a museum or is it just left as it was? I prefer it left as it was, its more creepy.

afaik, it is left as it was, completely abandoned. (from what I see in pics at least, but also it doesn't look so much like a subway anymore as just a rail tunnel - with some cool new features ;) )

Here is a description and some photos from infilitration.org that you will probably enjoy:
http://www.infiltration.org/transit-roch.html

Here are a few articles from Rochester Democrat & Chronicle. What a contrast to Toronto's media.

Johnson, CATS exec clash over ferry plan


Greg Livadas
Staff writer

The war of words over the future of the high-speed ferry escalated Saturday as Mayor William A. Johnson Jr. described as "ludicrous" a charge that the city stole the ferry operator's business plan.

A day earlier, Johnson laid out a detailed plan under which a new public authority would buy the Spirit of Ontario and oversee its operation between Rochester and Toronto. The mayor portrayed the plan as the only way to save the ferry service, which shut down in September after less than three months of carrying passengers.

Late Friday, Cornel Martin, the president of the ferry operator, lambasted the city for "unethically and possibly illegally" trying to destroy its business. Martin accused the city of using confidential data provided by Canadian American Transportation Systems to develop the plan that Johnson unveiled.

"The city's proposal, in effect, pirates CATS' business plan, putting the city's name on it," Martin said.

On Saturday, Johnson responded.

"To accuse us of stealing when our proposal represents the only real opportunity to prevent the citizens of Rochester from losing the fast ferry is absolutely ludicrous," the mayor said.

He said the city's proposal was developed from many sources, including an analysis of CATS' operation. He also said the business plans had major differences, including terms of financing, fares and ridership projections.

"We have no hidden agenda here," Johnson said. "Our only goal is to save the fast ferry."

Under the city's plan, a newly created Rochester Port and Ferry Authority would issue $40 million of government-backed bonds. Coupled with money the state and city already have provided, the authority would buy the massive ship for $42.1 million.
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Mayor calls saving ferry urgent


Europeans could get ship and taxpayers' $15.3 million with it.








What's a public authority?
Public authorities in New York perform government functions but act autonomously. They raise their own revenue, pay their own bills and have the power to borrow money and condemn property.
Boosters claim public authorities are more nimble and focused, thus more efficient. But critics counter that authorities are less accountable to the public and more vulnerable to political influence than other government agencies.


Rick Armon
Staff writer




(November 19, 2004) — The city must save Rochester's high-speed ferry service before the ship is sold elsewhere and sails away for good, taking a boatload of taxpayer money with it, Mayor William A. Johnson Jr. says.

The mayor officially announced his plan Thursday to turn the cash-strapped private ferry service into a publicly run operation. The proposal involves creating a public authority — the Rochester Port and Ferry Authority — that would sell government-backed bonds to buy, own and run the ferry.

The initial cost to purchase the ship, pay off previous debts and get the service running again is estimated at $40 million.

"We must act soon," Johnson said. "Without fast action, this service could be lost to this community."

The senior lenders who hold the rights to the ferry "already have potential buyers in Europe and other places," he said. If it's sold, the city and state, which have spent $1.3 million and $14 million, respectively, on the ferry itself could lose their investment.

In all, taxpayers have invested about $50 million in the ship, ferry terminal and infrastructure at the port, Johnson said.

The mayor said the city's business plan would be made available to the public today, and he welcomed scrutiny. He noted that the purchase would be funded through bonds and not tax money.

Johnson also pledged that the ferry would not need any future public subsidies — a promise reminiscent of former Monroe County Executive Bob King's pledge in 1993 that Frontier Field would be self-supporting. Local taxpayers are now supplementing the sports facility with $1.68 million a year.

The mayor is meeting with City Council and state lawmakers to sell his proposal. Council and the state Legislature must approve the formation of an authority. Lawmakers say they want to scrutinize the business plan.

The big question is whether there is enough political and public support for the city proposal. A majority of respondents to a recent Democrat and Chronicle poll said they want to see the ferry become a permanent link between Rochester and Toronto, but few people wanted more public money used to keep it going.

"As we move forward, the mayor must make a case that his alternative is the only alternative," said state Sen. Michael Nozzolio, R-Fayette, Seneca County. He also said he wanted to hear public input.

Assemblyman Joseph Morelle, D-Irondequoit, said he's not sure the city has explored all of its options.

"My belief has always been that this should be a private-sector venture and that the notion that it would be a publicly run operation is just contrary to my general philosophy," he said.

Monroe County Executive Maggie Brooks said the mayor's plan should be explored and the community needs "to do what we can to preserve the ferry in Rochester." But the $40 million "would be a big price" without assurances that ferry revenue could cover the costs, she said.

The $42.5 million Spirit of Ontario — a massive vessel that can carry up to 774 passengers and 238 cars — made its last voyage between Rochester and Toronto on Sept. 7 after less than three months in operation. The private ferry company, Canadian American Transportation Systems, said it was bleeding money and had to shut down.

City officials already have made an offer to CATS to buy the ship, which sits idle in the Genesee River. That offer would pay off some debts, "but is not a bailout of CATS," said Linda Kingsley, city corporation counsel. While CATS owns the ship now, the senior lenders could take possession of it through legal means, she said. The city hopes the matter will be settled amicably and not in the court system, she added.

CATS officials could not be reached for comment Thursday.

The mayor expects criticism over his proposal, but he pleaded for community support and unity to help return the ferry to service. At one point during his news conference, Johnson said he was "sick and tired" of reading accounts about how Rochester is a dying city and can't get anything done.

Johnson said it's vital to keep the ferry here because it sets Rochester apart from other midsize U.S. cities and links the community with Toronto.

Issuing government bonds for projects is nothing new, Johnson said, citing the Public Safety Building, Frontier Field and the Blue Cross Arena at the Community War Memorial.

But the city is already facing skepticism.

City resident Ivan Ramos, 45, picketed outside City Hall Thursday morning with a sign saying: "For Sale: $40 million sinking ship. Bill Johnson wants to buy it with your money!"

He supports the ferry service but wants it to be run privately. If it can't be, "then it should go away," he said.

Mark Zupan, dean of the University of Rochester's William E. Simon Graduate School of Business Administration, said the city business plan must be scrutinized, especially considering that the private sector apparently is unwilling to step forward and take over the venture.

When the government runs an operation, there tends to be a lack of innovation and attention to minimizing costs, he said.

Amit Batabyal, an economics professor at Rochester Institute of Technology, said the city should immediately commission a cost-benefit analysis to prove that it will be "revenue neutral" and not require annual subsidies from already "over-taxed and over-committed citizens."

"I'm slightly troubled by the city having to buy the fast ferry without what would appear any private support," he said.

Others are questioning why the city wouldn't seek help from the Rochester-Genesee Regional Transportation Authority, an already established state authority. The mayor has said that RGRTA has too much on its plate since it is overseeing the proposed Renaissance Square downtown.
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Mayor: City needs to buy, run fast ferry; $40M would be raised through bonds






[Day in Photos]



Mayor announces plan today(Updated 1 p.m.)



What's a public authority?
Public authorities in New York perform government functions but act autonomously. They raise their own revenue, pay their own bills and have the power to borrow money and condemn property.
Boosters claim public authorities are more nimble and focused, thus more efficient. But critics counter that authorities are less accountable to the public and more vulnerable to political influence than other government agencies.

What's at stake?
U.S. taxpayers have invested at least $36 million in Rochester's high-speed ferry project. Most of that public money has gone to construct a ferry terminal at the Port of Rochester and build up the infrastructure there for the ship. Many political leaders are worried that private lenders may decide to take the idle vessel out of Rochester, leaving the community high and dry.


Rick Armon
Staff writer




(November 18, 2004) — Unhappy with progress in restarting Rochester's troubled private high-speed ferry service, city officials want to buy the ship and turn it into a publicly run operation.

The proposal involves creating a public authority that would sell government-backed bonds to purchase, own and run the ferry. The initial price tag? About $40 million.

"We have tried every way we could to make this deal work with a private- sector solution. It is not possible," Mayor William A. Johnson Jr. said Wednesday. "Do we throw up our hands in despair and let it go? Or do we do something that ... will evoke some controversy in terms of more public money being spent on the ferry?"

He and other city officials are expected to announce the proposal during a news conference this morning at City Hall. A specific business proposal is expected to be released this week.

The goal is to have the ferry back in service in the spring and operate year-round.

But the city proposal faces legislative hurdles — the top one being getting the state to approve the creation of the new authority. The plan also likely will face public opposition, considering a recent telephone poll conducted by the Democrat and Chronicle showed that only 17.8 percent of respondents would support more public money going to keep the ferry running. However, 74.2 percent said the ferry should become a permanent link between Rochester and Toronto.

The $42.5 million Spirit of Ontario — a massive vessel that can carry up to 774 passengers and 238 cars — made its last voyage on Sept. 7 after less than three months in operation. The ferry company, Canadian American Transportation Systems, had benefited from $15.3 million in taxpayer assistance to buy the ship and millions of dollars more to construct terminals in Rochester and Toronto.

But the company said it was bleeding money and had to shut down. CATS officials say the ship, which now sits idle in the Genesee River at the Port of Rochester, carried about 140,000 passengers in the short time it operated.

The company, its lenders and political leaders have been negotiating behind the scenes in an attempt to restart the service.

According to the city proposal, CATS — which has faced criticism over its business decisions — would be cut out of any ownership or management of the vessel. The city authority would either hire a private vendor to run the operation, employ its own staff similar to the Rochester-Genesee Regional Transportation Authority or operate similarly to the Riverside Convention Center, which is owned by the city but run by a nonprofit corporation.

"We think we can show that this venture can be self-sustaining," Johnson said.

The public authority would be able to restructure the debt better than CATS, which was burdened by short-term loans, he added.

The fear for many is that the ferry would require annual public subsidies to continue operating, as do Frontier Field and the Blue Cross Arena at the Community War Memorial.

"I'm just in favor of anything to get this thing running again," said Jeff Levin, 54, of Henrietta, a ferry supporter who has ridden the ship. But he questions whether the public is interested in pouring more money into the project. "I don't know if that's going to sell, but I'd still like to see it run again," he said.

Another ferry supporter, Carmen Mendez, 36, of Irondequoit said: "If I was a city resident and my children were going to city schools, I would be very much offended. The city schools are in so much trouble now."

City Council President Lois Giess said she's worried about any subsidy that might have to come from the city. Council would have to pass legislation asking the state to create the authority.

"We don't need to make a profit," she said. "We just need not to have a subsidy."

Rep. Louise Slaughter, D-Fairport, who helped bring federal money to Rochester to build up the port, said she favors the city buying the ship and running it, especially if the service is profitable.

"I would like it to be a revenue stream for the city," she said.

City officials already have talked with CATS about buying the ship, but it's unclear whether the company would be willing to negotiate a deal. CATS co-owner Dominick Delucia declined to comment, saying he hadn't "been given the opportunity to meet with the mayor for the last four weeks."

CATS has been notified that it is in violation of its lease agreement with the city and could be evicted from the city-owned ferry terminal, added Linda Kingsley, Rochester's corporation counsel.

The business proposals developed by CATS have been rejected by the senior lenders, Johnson said.

But the city proposal has the support of the Australian Export Finance and Insurance Corp., which provided a $22.5 million finance guarantee for the project, and of other senior lenders, Johnson said.

EFIC officials could not immediately be reached for comment.

The mayor said that the response from state leaders has been "cautiously favorable."

"We haven't seen a formal proposal, but we are continuing to monitor and assess the situation and remain hopeful the ferry will again be able to resume service," said Todd Alhart, a spokesman for Gov. George Pataki.

Johnson added that he's not interested in turning the project over to the RGRTA, an existing transportation authority in Rochester.

He said RGRTA is leading the effort for Renaissance Square, involving a new bus terminal, Monroe Community College campus and performing arts center. The new authority must be focused solely on making the ferry successful, he said.

RGRTA Chairman Bill Nojay declined comment.