Alaska News

Mat-Su still hopes to unload ferry Susitna as payback deadline nears

PALMER -- A Turkish rental car company is interested enough in buying the Matanuska-Susitna Borough's beleaguered ferry Susitna it shelled out $20,000 to take the vessel for a test run. But that was months ago and there's been no official progress since.

Meanwhile, the borough is under a deadline next Thursday to pay back more than $12 million in federal grants spent on the Susitna.

The borough Assembly on Tuesday night unanimously approved the receipt of the money sent by wire transfer from Intercity Rental Car Corporation "for an exclusive inspection and demonstration sea trial" last fall, according to a borough memo. At the meeting in the Palmer borough building, no one testified at a public hearing before the vote.

The money covers the cost of transporting Borough Manager John Moosey, captain J.P. Stormont and crew to Ketchikan, as well as meals, lodging, rental car, parking, mileage, crew hours, fuel maintenance and handling fees.

Moosey, asked Wednesday morning why the payment approval came months after the trial run, said the company actually wrote a check to the borough before the ferry left the dock in September, under a policy the borough implemented in August asking interested parties to help offset the borough's costs for such trips.

The money does not indicate Intercity has lost interest, he said, and negotiations with the company continue as the borough faces the federal deadline. Officials did not say how much the company is offering.

Officials in the Mat-Su have been trying to sell the ferry for more than a year, since problems finding money to build landings sidelined Susitna from the waters of Cook Inlet. But more recently, the demand from the federal government added even more urgency to the need to find a buyer. The money from the Turkish company could help pay back more than $12 million in grant money the borough owes the Federal Transit Administration. Last year, the agency demanded the money back after the borough failed to put the Susitna into passenger service. The borough has to pay back the money by Jan. 15 under an extension granted a few months ago.


Moosey said the borough will submit a response saying "this is our understanding of our grant obligations and it differs from your view."

He wouldn't provide any specific points of disagreement.

The ferry has sat idle at Ward Cove, near the Ketchikan shipyard where it was built, since April 2012. Monthly storage payments continue to mount past an estimated total of $1.4 million last year.

Past offers from other potential buyers have ranged from $1 million to $6 million.

Moosey accompanied Intercity representatives when they took the ferry for a test ride in September.

The company wants the Susitna for personal use, he said last month, sort of like a yacht.

The 195-foot Susitna was designed as a half-size prototype of a U.S. Navy double-hulled beach landing craft that can run through ice. It holds up to 129 passengers and 20 vehicles. The borough initially got the roughly $78 million craft largely for free.

"It's an incredible boat," he said. "It's hard to use in business because you can find an alternative that's going to be cheaper. But it's the only one like it in the world."

Update, Jan. 8, 2014: After this story was published, Matanuska-Susitna Borough port director Marc Van Dongen said it's the owner of a Turkish rental car company who is considering buying the ferry Susitna, not the company itself. Van Dongen declined requests to provide the owner's name.

Zaz Hollander

Longtime ADN reporter Zaz Hollander is based in the Mat-Su and is currently focused on coverage of the coronavirus in Alaska. She also covers the Mat-Su region, aviation and general assignments. Contact her at