Loss of the CAT- A View from Maine

Anchors aweigh The CAT’s departure ushers in new possibilities for the Ocean Gateway terminal

By ROBERT M. COOK

Mainebiz Staff Reporter
Today

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When Jan Beitzer, Portland’s downtown district director, gazes out at the open waters of Portland harbor, she sees more than containers stacked for transport, bobbing lobster buoys and the prospective home of a new mega berth for visiting cruise ships. She sees all kinds of potential.

“When you bring 70,000 people to town, the ship is here for eight to 12 hours and people fan out and patronize all sorts of businesses,” Beitzer says. “It is an economic development cluster that is significant for the city and we must do all we can to promote it.”

That includes picking itself up and dusting off the disappointment that followed the departure of The CAT high-speed ferry service from the Ocean Gateway International Marine Terminal in December. The ferry service was the anchor tenant in the $20.7 million, state-of-the-art terminal that opened in 2008. Long term, the city sees the terminal as a vital component in its growing cruise ship industry, regardless of whether The CAT or other ferry service is restored. Enhancing that industry — which is projected to grow 32% in ship visits in 2010 versus 2009 — is a priority.




City Manager Joe Gray found out Feb. 17 that an application requesting $8 million from the American Recovery and Reinvestment Act to complete a second mega deep-water berth on the eastern side of the terminal was denied. He says he intends to meet with city councilors and Maine’s congressional delegation to seek other funds. If completed, the second mega berth would allow the terminal to accommodate larger vessels, such as the Queen Elizabeth II, which is scheduled to visit Portland in 2011, says Nicole Clegg, a spokeswoman for the city. It could also be a potential home for the USS John F. Kennedy, a decommissioned Navy aircraft carrier.

The second berth would allow the city to host three cruise ships in one day, she says, significantly expanding its ability to welcome tourists.

Last year, the city saw 48 cruise ships that brought 70,000 visitors, and in 2010 the city expects to see 71 cruise ships that will deliver 80,000 visitors, Clegg says.

“Every year we’ve set a record,” she says.

When the city hosted 31 cruise ships in 2008, visitors pumped $6 million to $8 million into the city and other Maine communities when they boarded tour buses and traveled elsewhere, according to Clegg, citing the most recent statistics available.

Pining for the Scotia Prince Ironically, revenues from the growing cruise ship industry and The CAT ferry pale by comparison to the local revenues generated by the Scotia Prince, The CAT’s precursor that stopped service in 2004 after suffering some financial hardship. Mark Hudson, a former vice president of finance and communications for Scotia Prince cruises, told Mainebiz in 2004 that the ferry pumped $53 million a year into the Greater Portland region.

Don Haggett, sales director of Bangor-based Lafayette Hotels, believes it. He says his three hotels in Portland saw much more business from visitors who used the Scotia Prince than The CAT.

The Scotia Prince — regarded by many as a harbinger of spring — gave travelers more options than The CAT, he says, allowing people who traveled from Nova Scotia to stay in the city for a few days or travel to Lafayette hotels in seaside communities like Wells and Ogunquit.

Unlike The CAT, the Scotia Prince was also capable of transporting buses and trucks to and from the Canadian Maritime province.

“We need a ship like that,” he says. “The Scotia Prince was an attraction and a floating hotel,” that featured a casino and live entertainment.

Haggett says the cruise ship business has been great for the area, but it doesn’t fill his 600 hotel rooms at the Holiday Inn by the Bay, the Holiday Inn West and the Best Western Merry Manor Inn.

The greatest benefit he derives from the cruise ship industry is that it brings people to the city and makes them want to come back and vacation here. “We give them the sample and hopefully they buy the box of chocolates,” Haggett says.

The CAT’s departure The CAT’s impact was much more subtle and, therefore, harder to measure, says Barbara Whitten, president of the Convention and Visitors Bureau of Greater Portland. Unlike cruise ships that yield thousands of visitors who descend on the Old Port all at once and spend money, Whitten says some CAT passengers stayed at a Portland hotel before or after they used the service, while others arrived in the city a few hours before they headed to Nova Scotia.

George Driscoll, vice president of marketing and sales in The CAT’s Portland office, said more than half of the 76,000 CAT passengers in 2009 took the ferry out of Portland; the others boarded in Bar Harbor. By his estimates, The CAT pumped $7 million into the Greater Portland economy in 2009.

But the high-speed ferry service (a one-way trip to Yarmouth was five and half hours versus 11 hours on the slower Scotia Prince ) failed in its quest to get a $6 million to $7 million subsidy from the Canadian government to operate in 2010. Mark MacDonald, president and CEO of Bay Ferries Limited, owner of The CAT, announced the service was discontinued on Dec. 15.

The loss of the service means more than just fewer options for travelers to get to Nova Scotia. According to Clegg, Bay Ferries Limited leased the Ocean Gateway terminal for $103,000 in 2009. Unless another ferry service is found, she says the city will not recover that money.

By comparison, cruise ships paid the city $33,000 in berthing fees in 2009 whenever they tied up at Ocean Gateway, she says. The city also logged $59,000 in revenue during fiscal year 2009 from weddings and events held at the terminal. She says the facility, which has a maximum occupancy of 500 people, is expected to generate $65,000 in this fiscal year.

All tallied, the city received about $195,000 in revenue from the terminal last year, $85,000 shy of its $280,000 annual debt service on the structure. Portland ponied up $4.1 million to build the terminal, with the federal government contributing $4.5 million and the state paying more than $12 million. Clegg says the city is scheduled to pay off its portion of the Ocean Gate terminal project by 2028.

Seeking other tenants The decision to develop the Ocean Gateway International Marine Terminal was well-thought out and a decade in the making, an innovative use of a former Bath Iron Works dry dock that had been used to repair Navy ships, says Clegg.

But not everyone was on board with the decision or the cost.

As much as his business has benefitted from cruise ship visitors, Steve DiMillo, whose family owns DiMillo’s restaurant on the waterfront, says he never liked the city’s decision to spend so much money to build a facility that will never generate revenue year-round.

Besides the cruise ships and a ferry service, DiMillo says, “I don’t really have another use for it.”

Like Haggett, he would prefer to see the city get another vessel similar to the Scotia Prince or the Prince of Fundy to serve Portland because they generated more business for him than The CAT.

Haggett says better still, landing the USS Kennedy would create a year-round tourist draw at the Ocean Gateway terminal. Such an attraction would bring plenty of military reunions and visitors who would stay in the city for two or three days, he says. A group supporting the effort to bring the warship to Portland, JFK for ME, recently announced its application passed the Navy’s first round of testing.

Beitzer, whose group represents 485 businesses, including 154 retail shops and more than 100 restaurants in the Old Port and the Arts District, says she’s looking forward to the completion of the second mega berth so larger cruise ships will be able to be in port, rather than in the harbor where they have to use launches to taxi visitors to and from the city.

Some of those tourists will likely find their way to the convention bureau’s visitor information center at the Ocean Gateway terminal, which is maintained from March to October and will continue to be staffed regardless if The CAT service is restored, Whitten says. The Ocean Gateway terminal provides tour buses and individual travelers with a place to park, stretch their legs and get information about the city.

Like Beitzer, many hope those visitors will be captivated by the Ocean Gateway terminal’s views of Portland harbor, the impressive sight of large cruise ships in port and the terminal building’s architecture, which features towering glass windows.

“It’s a beautiful, unique space,” Beitzer says.