Ocean Gateway may be off-limits to developers
City requests private plans to operate second public facility
By Chris Busby
At a workshop session on Sept. 24, the Portland City Council asked Ocean Properties and The Olympia Companies – the two developers interested in leasing the Maine State Pier – to submit plans to build a so-called “megaberth” at the Ocean Gateway marine passenger facility next door.
There’s a problem, however: It’s quite likely that private operation of the public Ocean Gateway cruise ship and ferry terminal would be illegal. And without revenues from the operation of the facility, there’s little incentive for either company to spend the $6 million necessary to build the long berth.
Ocean Gateway is nearing completion just east of the Maine State Pier. The $20 million-plus facility is being built using city, state and federal funds. At issue is the fact that much of that public money was raised through tax-exempt bonds that have yet to be paid off.
Federal regulations prohibit the use of tax-exempt bonds to build public infrastructure that directly benefits private enterprise, said city finance director Duane Kline. Kline said city finance and legal staff are discussing this restriction with state officials this week, and may have some clarity on the issue by next Monday, when the Council meets again and is expected to further discuss the matter.
Meanwhile, both developers are scrambling to reconfigure their plans to include the megaberth. The need to address issues raised by the possibility of building the megaberth at Ocean Gateway led to the 4-4 Council deadlock on Sept. 17 that has left the future of the pier in limbo.
Councilor Ed Suslovic is among the faction that’s halted the process until the megaberth can be addressed. At last Monday’s workshop, he suggested the developers return with amended plans for the Council to consider next Monday, but later noted that timeframe is exceedingly short. In order for the development teams’ amended plans to be included in the Council’s packet of backup material for the Oct. 1 meeting, they would have to submit them by Sept. 28 – effectively giving Olympia and OP three days to expand and rework their $100 million proposals.
Ocean Properties executive Bob Baldacci said his company could meet that deadline. Olympia spokesperson Sasha Cook said his company would try to get the materials in by Friday, but called the timeframe “unreasonable” given the scope of the changes being requested. The divided councilors could not agree on an extension.
Both developers have expressed interest in building the megaberth and operating Ocean Gateway – Olympia formally made a pitch to operate the terminal in its original proposal for the pier – but their efforts to amend their plans accordingly could all be for naught due to the bond restrictions.
In other notable developments, it was made clear last Monday that the megaberth was not only planned for Ocean Gateway, it was approved by the City Council a few years ago as part of the Ocean Gateway project and permitted for construction. (Higher-than-anticipated construction cost estimates put the megaberth on hold, but the city has actively been trying to secure state funding to build it.)
The city’s ports and transportation director, Jeff Monroe, told councilors during the workshop that the megaberth is crucial if Portland is to continue to host cruise ships in coming years. The ever-increasing size of these vessels will eventually surpass the Maine State Pier’s ability to handle them. Furthermore, Monroe noted that the harbor bottom next to the pier will need to be dredged within the next 10 years if the pier is to continue to berth large ships. Dredging could cost $10 million, he said.
