Page Sixty-Nine

23 JANUARY 2006

How much is enough?

Tuesday   January 24, 2006

Ferry Board Approves Borrowing   by Seth Voorhees Published Jan 24, 2006 The Rochester Ferry Company took another step toward unloading the boat. The ferry board approved another round of funding that'll cover debt, bills and the cost of selling the vessel. The board approved the borrowing of $9.4 million dollars from the city insurance reserves. The money will go toward debts to Bay Ferries, and will help fund the city's efforts to sell the boat. “There's been a lot of interest,” said Thomas Richards, city attorney. Richards says though the number of people who’ve called about the ferry is encouraging, the city will proceed with caution, nonetheless. “We've had experience before with people who had great ideas and not much money,” said Richards. “That's not what we're looking for here.” While Richards said it "wouldn't be good for the process" to disclose information about potential buyers, mayor Bob Duffy says interested parties include one ferry operator from Toronto and others from New York City. Duffy says at least one operator expressed interest in keeping the boat in Rochester. “If there is an interest we certainly will pursue that,” he said, adding that any future ferry operation would have to be privately financed. Two major issues still must be worked out – The city’s contracts with Bay Ferries and the Toronto Port Authority. The city must negotiate breaking both deals. City leaders say they have no idea how much that will cost. So far, the city’s debt on the ferry operation totals more than $42 million dollars. Duffy has put a ballpark figure of $20 to 30 million dollars on the ferry's sale price. Either way, the city stands to lose millions. “There's no doubt, there's going to be a gap between the sale of the boat and the EFIC loan which we are responsible for,” said Duffy Though he put the Spirit of Ontario out of its misery, Duffy doesn't consider the idea of a Rochester to Toronto ferry dead. “I do believe there will be a private ferry service operator that will look at Rochester,” said Duffy. “If the market is viable they will come.”

What relevant information points to viable cross-lake Toronto-Rochester route?  Simply spinning off the numbers of passengers who used the ferry in 2005 is... well, somewhat meaningless.  If instead of 230,000 passengers, the ferry carried 180,000... is that enough people to declare there's a 'viable business case'?  How about 100,000?  Does that 'prove' there's very real market?

Obviously, 230,000 was not sufficient to support a ferry business of the magnitude which just bit the dust.  Who determines what constitutes a 'need' for a ferry between Toronto and Rochester?  What criteria is used to make this determination and who is authorized to explain WHY a cross-lake link is needed?

Since no more public cash will be made available to whoever comes in with another ferry proposal, that means the prime motivation for a ferry business will be solidly 'for profit'.  There are no other reasons why a private company would make a sales pitch... civic pride is fairly insignificant at this point.

26 JANUARY 2006

Whoops...

25º | Hi 34º / Lo 17º |

Well THAT'S a real fly in the ointment, to be sure.  Without sounding alarmist, THAT Red-White-and-Blue legislative gem just cost Rochester taxpayers a bundle and locals can proudly rally behind their government's protective arm as they fork over even GREATER amounts of cash to pay off the barge.

Why?  With the pool of prospective buyers just axed, State Senator Alesi's bubbling over getting Albany to help keep the ferry in the state just relegated him into the Boob column.  Me?  I wasn't aware of it either but then, I'm not in the heady halls of elected office either.  New York City just got crossed off the list of eligible buyers... unless it plans on direct service with a Maritime province.

The industry consensus appears to be that the Rochester ferry is  W A Y  oversized for service in the Great Lakes, so that pretty much means it'll be sailing out the St.Lawrence for a yet-to-be determined new home.  More than likely, that means it'll have to be bought by a foreign company... which really narrows the market.  Hmmm.  A foreign company which has expressed an interest in the ferry...??  The list grows shorter.

Asking -- rather, expecting -- at least $20 million for the ship is being optimistic as few communities the size of Rochester can afford such a boat.  The list shortens yet more.  Now the sale of the ferry is solidly in a buyer's market which puts Rochester in a very distinct disadvantage to (1) sell the ship  AND (2) get anywhere near the price it hopes.

Long story short: the Istanbul Ferry Company Inc. is in an ideal position to make whatever offer it wants -- "Here's $7 million... take it of leave it" -- and Rochester is in no position to decline the offer.  I seriously doubt such a scenario would be feasible as Istanbul Ferries would 'hopefully' make a fair offer... one that's exceptionally to THEIR advantage (and why not?) but one which is semi-fair to Rochester.  They DO want to grab onto a steal of a deal so they'd not likely toss out an offer which can't be accepted, but have no illusion they'd walk away with some very big smiles and grins.

This is the guy to watch.  Somebody better send him a basket of fruit or something because he's about to buy Rochester's ferry with Rochesterians' money.  Don't mean to brag, but the track record of this tome speaks for itself.

Given the latest revelation in the D&C, Dr. Paksoy must be busy assembling the legal troops to descend into the Greater Rochester airport.  Sort of like J.R. Ewing, I think this is a case of capital-O Opportunism.  All's fair in love and business.  Out-smarted by a pro.

Ouch.

Why greed isn't always the best motivational force:

Thursday   January 26, 2006

Kurt Ritchie packs up for good. Business Folds Along with Ferry   by Anthony Pascale photo by Chris Coffey Published Jan 25, 2006 One of the people who lost the most in the failure of the fast ferry project packed up for good Wednesday. Kurt Ritchie started Horseshoe Hospitality to run the ferry's onboard services; from the duty free store and arcade to all of the onboard food and alcohol service. Ritchie says he lost several hundred-thousand-dollars when the city pulled the plug on the venture. He started his business because he trusted the city and its projections. “I was going along for the ride,” Ritchie said. “So it just shows that they're not any smarter than I am.” Ritchie says he expects Horseshoe to file for bankruptcy. He says all the items left over from the ferry will likely be sold at an auction for pennies on the dollar.

“I was going along for the ride,” Ritchie said. “So it just shows that they're not any smarter than I am.”

I'm sure wouldn't be bragging about that in the press.  Admitting stupidity by saying "he trusted the city and its projections", Ritchie shows a remarkable lack of business- and common sense by not thinking his Get Rich scheme through thoroughly prior to investing 'several hundred-thousand dollars' in a failed ferry service.  Smart investors would have looked at the previous CATS service and would have steered clear from taking the bait... regardless of WHAT visions of happiness were promised by the city.  Business acumen and credibility: "Zero".

No sympathy here.

Federal law makes NYC unlikely home for fast ferry 1/24/2006 6:00 PM (Ty Chandler) Speculation that the fast ferry could find a home in the Big Apple has grown this week.  However, those eager to keep the ship in New York failed to consider a very crucial federal law. It is called the Jones Act, and it is the law of the land, or in the case the seas.  A ship must be U.S. built, U.S. owned and registered in the U.S. to operate between two U.S. ports.  The Australian built Spirit of Ontario got around that by servicing an international route, Rochester to Toronto.  But, New York City isn't near any international ports, making it nearly impossible for Spirit of Ontario to operate there. "I really don't know what the law is in respect to maritime applications," said City Attorney Thomas Richards.  "But we're not far enough along to worry about that and to be fair to New York City, they haven't really expressed whether this boat would work for them," he said. Tuesday the Rochester Ferry Board met for the second time this year.  The board approved the $9.4 million loan agreement with the city, which clears the way for the sale of the boat.  The board also decided to keep five people in their payroll to handle administrative duties and maintain the boat until it's sold.  Mayor Bob Duffy said his office has had several inquiries about the ship, including a call from a private operator in Toronto.  The sale of the boat will bring little relief to the city's debt, which is hovering around $50 million.  The $9.4 million borrowed from Rochester's reserves must be paid back immediately after the sale of the ship.  Maritime experts estimate the ferry's worth $10 to 20 million.  "Clearly we're in a position to pay debt services for many years to come," said Mayor Bob Duffy. City Attorney Tom Richards is still working to get out of contracts with Bay Ferries and the Port of Toronto.  Richards didn't rule out the possibility of more debt accruing due to those contracts.

And what is the Jones Act?

In-depth analysis by folks who aren't even in touch with the consumers just across the lake:

23º | Hi 34º / Lo 17º |

"Harper's conservative views on such issues as abortion, same-sex marriage, privatized health care and restricting stem-cell research seemed far out of sync with most Canadians."

Unsubstantiated fluff.  The Conservatives won a MINORITY government which speaks more of the skepticism of their platform than of a true romp by Canadians voters.  It's called a Parliamentary system.  Astonishing as it is, it's not the same form of government as in the States.

124 103 51 29 Total Elected CON 124 0 36.25% LIB 103 0 30.22% BQ 51 0 10.48% NDP 29 0 17.49% IND 1 0 .52% OTH 0 0 5.05% Updated: January 24, 3:14:13 AM EST

For Rochesterians: There are 308 seats in the House of Commons (the lower house, like the U.S. House of Representatives).   The leader of the party which gets the most seats becomes the Prime Minister, but because the winning party didn't win a majority of the seats (155, I think) they lead what's known as a 'Minority government'.

Canada, being the great small-l liberal country that it is, has four main political parties: the right-leaning Conservatives, the left/centrist Liberals, the little-more left-leaning New Democrats and the sovereigntist, left-leaning Bloc Québecois which only is available to the voters in La Belle Province.  Hopelessly simplistic generalizations, but serviceable for demonstration purposes here.

Note that three of the four parties are either centrist or left-of-centre.  In the States, which is a conservative bastion of Bible-thumpers and moral supremacists right now, the Canadian field is akin to Sodom and Gomorrah.   Much of the rest of the free world likes the Canadian model over the American counterpart but that's a whole other debate.

"Six years later, Bush now wears his conservatism like a badge. Don't be surprised if Harper, who was bitterly criticized by Martin for his support of U.S. policies, becomes Bush's new best friend."

The numbers: 124 seats pushing a fairly conservative agenda - versus - 183 other seats tending to embrace a more liberal theme (the one independent is a former radio shock-jock from Québec City who may be sitting in either field of play depending on his mood).  That's a formula for 'lively' debates on the floor of the House.  That's NOT a mandate for sweeping right-wing Bush-hugging USA supporters.  Sorry to burst your hopeful bubble, D&C.  If Harper tries to pull Canada closer to George's POV, he's in for a spirited fight.

"My, my, how we forget."

Indeed, the editorial staff at the D&C HAVE forgotten a certain love-fest back in the 1980's between right-wing Ronald Reagan and Conservative Brian Mulroney.  Remember the nauseating display of  "When Irish Eyes Are Smiling" between the two leaders?  The imagery still makes me wanna puke. 

Mulroney went on to become one -- if not THE -- most hated leader in Canadian history for his wholesale sellout of Canada in NAFTA and his supremely erudite prank of slapping something called the GST on the Canadian public.... the very tax which the same party is now promising to roll back by an immediate and whopping 1%.  Roll back the entire thing and I might be impressed.  On a $100 purchase, Canadians will save an entire dollar.   Big woo.

Mulroney resigned in disgrace and his successor, Progressive Conservative Kim Campbell, didn't even last five months in office before the Liberals cleaned House and Canadians voted the Conservative party into oblivion for years to come.  That's where the 12-years of Liberal domination came in.  No, we haven't forgotten how the Conservatives screwed up Canada and considering the length of time the Liberals were in power, neither did the Canadian voters.

The D&C needs to back off on the wishful thinking that clear skies and smooth sailing lie ahead for Canadian-U.S. relations.  Canada still isn't for sale and the 103 Liberals in the House will still have a VERY significant say in how cozy that relationship will be.

As for reading what's on Canadians' minds, the D&C editors would be better off leaving the Ouija board for parlour games instead of using it to prognosticate which way the wind will blow over the next two years.  Rochesterians can't even sell tickets on a boat to Canadians, let alone pontificate on Canadian-U.S. relations.

But it's nice they noticed.  I wasn't expecting so much as THAT.