Mat-Su borough puts unused $80 million ferry on market

Lisa Demer

The Mat-Su Borough's $80 million, two-year-old ferry is up for sale without fulfilling the borough's original dream of giving commuters a new route between Anchorage and the Valley.

The boat has never docked at the borough dock or sailed in Cook Inlet. Only a handful of borough residents have ever seen the unique twin-hulled, ice-breaking vessel, the Susitna. It was built in Ketchikan and is docked near there. While the federal government paid for it, the ship is now the financial responsibility of the borough.

The cost now tops $88,000 a month, and there's no realistic plan for a ferry system any time soon. So the borough Assembly is looking at ending its years-long ferry venture, which officials have been pushing in one form or another since at least 1998.

At a special meeting to discuss the ferry last month, assemblyman Warren Keogh proposed making a quarterly insurance payment of about $124,000 and, separately, listing the ship with a broker to sell or offering it as surplus property on the federal register.

Keogh calls himself a fan of the ferry. He traveled to Ketchikan to see and ride on it. He describes it as extraordinary. But neither the borough nor Anchorage has the special docks needed for a vehicle-carrying ferry. Without a way to run a ferry system, there's no cost-efficient way for the borough to keep it, he has said.

"In my view we need to place this vessel for sale and we need to be doing more than one thing at a time," Keogh said at the Aug. 28 meeting. "The intent of the motion is not to exclude other options."

No one on the Assembly objected. Some, though, still want it to become an operational ferry.


Borough planner Emerson Krueger is making arrangements to list the vessel with an Australian ship broker with expertise in fast ferries.

The broker, with International Brokering Services, was already familiar with the Susitna, which was built as an experiment by the borough and the U.S. Navy. It was conceived as a prototype for a new kind of military assault vessel to be turned over to the borough for use as a ferry instead of ending up as scrap. Former U.S. Sen. Ted Stevens was a big booster.

Perhaps the most unusual aspect of the boat is its barge deck, which can raise for faster sailing and lower for beach landings.

"The marine vessel community had been following its construction and subsequent testing with some curiosity," Krueger said.

Still, a vessel that is two ships in one may be a hard sale, Krueger said. The up-and-down barge deck adds complexity and maintenance costs. Most potential buyers wouldn't need that feature. And a more standard landing craft could be built for much less money.

Perhaps an oil company could use it for work in the Arctic, Krueger said.


No one is discussing price yet. The borough doesn't expect to recover the $80 million construction and design cost. The broker would receive a 2.5 percent commission on a sale.

If the ferry isn't used for public transportation, or perhaps another public purpose, the Federal Transit Administration would expect to be repaid the $13 million or so it put into design, studies, planning and a ferry building. The federal agency has frozen another $6.7 million the borough has in hand until the borough can demonstrate the ability to move ahead with ferry landings on both sides of Knik Arm. The borough has struggled to find a spot on the Anchorage side.

The borough Assembly, the transit administration and possibly the U.S. Navy would have to sign off on any sale or transfer of the ship. It can't be sold to a hostile government, for instance.

The borough was supposed to collect data on the ship's performance for five years for the Office of Naval Research. That provision could be written into a sales contract, Krueger said.

Krueger said he's also looking into listing the ship with a Norwegian broker, since the ship can break ice.

If a buyer doesn't emerge, the borough will look into listing the ship as surplus property, Krueger said. It would have to be used for a public purpose by whoever acquired it, but would be essentially free, he said.


One of the ship's strongest backers doesn't think the borough should give up.

"I do think it's a mistake," said John Duffy, who served as borough manager for 10 years during the ferry's development until he left the job in 2010. He marveled over the ship at its christening in Ketchikan that summer.

The borough had enough federal grant money for minimal landings that could accommodate a car-carrying ferry, Duffy said in a telephone interview Saturday.

At Port MacKenzie, the design was essentially a floating bridge between the existing dock and the ferry. That wasn't ideal because of the potential for conflict with ship traffic, he said, though so far, there isn't much traffic. At any rate, the borough Port Commission never liked that concept, he said.

Port Director Marc Van Dongen has said the federal money fell short of landings for both sides of Knik Arm.

Duffy wasn't always a booster. Back in 1999, then-Anchorage Mayor Rick Mystrom and borough manager Mike Scott were pushing a ferry as a way to whisk Anchorage snowmachine riders to Valley trails.

"Foolhardy," Duffy said.

But as public transportation, the project makes sense, he said.

The borough could attract more tenants for its industrial land around Port MacKenzie with a quicker transportation route, and residents of the Big Lake area could also use a ferry to get to Anchorage and shave their travel time, he said.

"I think you're really handicapping the future development of that port and that activity over there by not getting this transportation link in place as soon as possible," Duffy said.


Meanwhile, the borough has extended to Sept. 13 the deadline for proposals to dock or store the ship, said borough manager John Moosey.

The borough's first choice is to dry-dock the ship at Port MacKenzie, but is looking at other options too. Some Assembly members liked an idea by Dave Cruz, a borough port commission member who owns construction and maritime businesses, to beach the vessel in the mud at the port. He thought it could be done cheaply. The ship's architect isn't sure that would work.

The cost for dock fees near Ketchikan, utilities, security and maintenance is now almost $47,000 a month. Insurance adds another $124,000 a quarter, or about $41,000 a month. The cost of insurance just went up because the borough is taking title and possession of the vessel, Moosey said. If the ship is dry-docked, insurance likely would go down, he said.

The borough has put on hold an effort to solicit proposals from individuals, businesses or other groups to operate the boat for up to five years while the borough worked on building special ferry docks. But that alternative could come back.

"Some members of the Assembly appear to be angling to keep the ferry option alive," Krueger said.

The Alaska Marine Highway System tried out the boat recently and tested its beaching ability, Moosey said.

"We thought it worked fabulously," he said. "As to maneuverability and use, thumbs up on that."

Still, its design isn't compatible with most state ferry docks.

The borough and the state continue to talk, Moosey said.

"My personal goal is to get it in use in Alaska," he said. "I'd prefer to have it in public hands as opposed to private hands. We're getting where it's getting kind of tight and we really don't have many options."

Reach Lisa Demer at or 257-4390.

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