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Mat-Su Borough rejects Abu Dhabi firm's $2 million offer for unused ferry

Zaz Hollander
Uncredited

An Abu Dhabi shipping company in August offered to pay $2 million for the ferry the Mat-Su Borough has been trying to offload for more than a year.

No dice.

Abu Dhabi Mar LLC's offer isn't high enough, borough officials now say.

It will take three times that much to buy the M/V Susitna, a U.S. Navy prototype-turned-ferry that's languished at a Ward Cove dock since April 2012 at a cost of about $1.3 million to date.

Borough Manager John Moosey, in an interview last week, said the borough will now only accept offers of $6 million or more -- enough to pay back grant funds the borough owes the Federal Transit Administration for work done to turn the $78 million high-speed catamaran into a passenger vessel.

"I do not see that (the $2 million) being an acceptable offer," Moosey said. "It might be acceptable if we did not have a $6 million liability with the FTA."

That apparently was news to Abu Dhabi Mar. The company says it hasn't heard from the borough since September.

Johan Valentijn, chief operating officer, declined to discuss the situation further.

But a series of messages the company sent the borough last month show a growing level of frustration with a lack of direction from "confused" borough staff and an indecisive Assembly, identified as "council" in the correspondence.

"It is up to the Borough council to decide to either go forward with us or have a nice white (actually blue) elephant sitting in (white) Alaska for the foreseeable future as a memory of bad communications," Valentijn wrote at the close of a Sept. 23 letter to the borough.

Abu Dhabi, the capital city of the United Arab Emirates, sits on a T-shaped island that juts into the Persian Gulf. Abu Dhabi Mar's website describes the company as a "dynamic, new, financially strong group" that builds and refits yachts with shipyards in France, Germany and the United Arab Emirates.

The company planned to use the ferry as a mobile service platform for patrol boats stationed on far-flung islands in the UAE, which is about 50 miles from Iran.

CHANGING PLANS

Originally, the Susitna was supposed to ferry up to 130 passengers and 20 cars between Anchorage and the borough's Port MacKenzie. But, stymied by funding shortages and with no landings on either side, the ship never arrived.

Mat-Su officials last year started looking for a buyer for the ferry. They also offered to give the ship away for free to a government entity, which would relieve them of the federal grant obligation.

The Assembly in June made it clear it wanted to get rid of the ferry even if the borough took a loss on the outstanding federal grant obligation.

Then the Assembly shifted gears, authorizing the manager to pursue a way to store the ferry near the port for the winter in hopes of running a ferry service in Cook Inlet. Those plans seem to have stalled while the borough looks into a cheaper way to store the Susitna in Ward Cove.

Now the borough manager says the plan is to either sell the ferry for $6 million or find someone else to operate it here in Alaska.

NUMBERS GAME

Abu Dhabi Mar made the $2 million offer in response to a borough request and assurance in mid-August that "the vessel could be ours" for that amount, according to Valentijn's letter.

The company flew an expert to Alaska to look at the Susitna and offered $2 million, with a $500,000 deposit, according to the letter. Abu Dhabi Mar added another provision in September: They'd pay to store the ferry in Ward Cove for the winter -- a cost estimated at $213,000 annually -- provided the sale closed by the end of March.

The borough never accepted the offer, Moosey said. It received little in the way of public discussion.

Borough officials say they are reluctant to release serious offers for the ferry to avoid tipping off potential buyers who would drop their offers to match the going price. A $6 million offer in May fell through, Moosey said. After that, several $1 million offers surfaced, followed by the $2 million offer from Abu Dhabi Mar.

He said he hoped the borough's decision not to accept the $2 million offer has "minimized" the effect of the low bid price.

That said, Moosey continued, he doesn't have any higher offers at this point.

"I don't have anybody coming here offering six, eight, 10 million," he said. "I don't have any of those."

The ferry is on the Mat-Su Borough Assembly agenda for a Tuesday night meeting. Moosey said the plan is to discuss the ferry in closed-door executive session.

Reach Zaz Hollander at zhollander@adn.com or 257-4317.

 


By ZAZ HOLLANDER
zhollander@adn.com