BAR HARBOR — Future use of the idle international ferry dock facility as a cruise ship terminal was discussed at a special town council meeting Thursday. Ownership, control and management of the proposed facility would depend on how the project is financed, said consultant Louis Ajamil of Bermello, Ajamil and Associates (B&A).
The idle ferry terminal facility is set to be purchased by the Maine Port Authority (MPA) this year using bond funds approved in a state-wide referendum last fall. Bay Ferries Ltd., operators of The Cat, ended service between Bar Harbor and Yarmouth, N.S., in 2009. The facility has been shuttered since.
Roughly 120 cruise ships visit Bar Harbor each year. All but the smallest ships anchor in the harbor and ferry passengers to docks in town aboard small “tender” vessels. The proposed terminal would eliminate the need for tender operations, Ajamil said. It could also reduce congestion at Harbor Place and along a wide swath of waterfront where passengers currently arrive and load buses for land tours.
Some questioners expressed concern that any new restaurants or retail businesses at the new terminal facility would take business away from existing businesses in the village center and elsewhere.
“I own a restaurant across the street from the property, and I look forward to the ferry terminal being developed,” planning board member Tom St. Germain said. “It’s a blight on the neighborhood. But it would be hard to compete with the location advantage of a large restaurant there.” One large restaurant, he said, can do enough volume to put 10-15 smaller, “Mom and Pop” businesses at risk.
Ajamil said the layout diagrams in his presentation included parcels that could be rented out, but B&A had not recommended specific uses. “There’s zero revenue in the business models for any of these,” he said. Different port communities take different approaches to the question of retail shops and restaurants at a cruise terminal, he said, and some disallow them.
In response to concerns that visitors won’t come into the downtown village, he said “I think you’re selling yourself short.”
Others asked about whether the town would need to increase its current cap on total passengers per day in order for the project to break even or turn a profit.
The business model under development, Ajamil said, assumes no growth in annual passenger counts from current numbers. “At two percent growth per year, it generates revenue,” he said.
“My sense is that you’ll be able to increase (passenger numbers) a little bit and feel less crowded than you do now.”
B&A has also met with Acadia National Park officials on traffic and visitor volume concerns. MPA officials said last month they expect the park’s transportation study to inform plans for the property.
“Traffic management is important, but it’s a later step,” Ajamil said.
Councilor Gary Friedman asked how other, smaller US towns such as Ketchikan, Alaska have approached financing their cruise ship piers. Ketchikan used a state bond bank to finance a $55 million expansion of an existing pier, Ajamil said.
“Are we just providing input in what’s ultimately a state decision?” Friedman asked “What level of investment and control might the town want to negotiate for?”
A previous report on the project, completed by B&A in 2012, called MPA “the entity best equipped to lead the negotiations” with the Canadian government for purchase of the property. MPA agreed to get involved, director John Henshaw said at the time, because his agency “found the preservation of maritime uses at the site to be in the best interest of the State of Maine.” Those studies did not include recommendations for who should eventually own or operate the facility.
“Financing is difficult in this case since there’s no business history,” Ajamil said. A hybrid ownership agreement could be explored between the MPA, the town, and possible third parties. “Eventually you’ll have to negotiate with somebody if you’re going to raise the capital,” he said.
A final report from the current B&A study, commissioned jointly by Bar Harbor, the Maine Port Authority and the Bar Harbor Chamber of Commerce, is expected in about six weeks, Town Manager Cornell Knight said.