Mat-Su

Mat-Su Borough makes drastic price cut in attempt to offload never-used ferry Susitna

PALMER -- Hoping to sell a disabled former U.S. Navy prototype turned failed Cook Inlet ferry?

Try knocking a few million off the sticker price.

At least, that's the Matanuska-Susitna Borough's latest strategy.

The M/V Susitna, the borough's high-tech ferry once on the market for $6 million, is now down to $2 million -- and five potential buyers are sniffing around.

"We're trying to get the most we can," borough port director Marc Van Dongen said Monday. "It's like selling a house. You have to keep lowering the price."

The Susitna, a 195-foot, twin-hulled barge with beach landing ability capable of breaking ice over its bow, was never placed in ferry service. Now it doesn't even run: heavy rains this year damaged its engines.The borough is in a difficult budget year and faces a federal demand to repay as much as $12.3 million in grant money spent on the ferry, though officials hope it will be less.

Van Dongen announced the lower price in an email sent this month to more than 40 entities that previously expressed an interest in the ferry. The ferry is for sale "as is where is," and a buyer needs to come up with a $100,000 deposit.

Van Dongen said offers came from an oil-recovery business owner in Houston, Texas; an Alaskan in environmental remediation; a Turkish businessman whom the borough has been working with for months; a Croatian resident working through a broker; and the Philippine Red Cross.

The borough's internal auditor is making sure the buyers are viable, Van Dongen said. At least one has already been ruled out. The borough has also already run into trouble with the potential sale to a Turkish entity because of limits on the ferry's sale to foreign countries. That will complicate other potential foreign sales too, officials say.

The borough tried for more than two years to sell the ferry for $5 million to $6 million, borough manager John Moosey said Monday.

"We're looking at a broken boat," Moosey said. "I don't think we'll get that same amount when we couldn't get it before."

He's hoping to make the borough's share of the repair cost part of any sales agreement.

To fix the ferry's three engines damaged by rain that poured down its stacks in February, the borough got estimates in the $750,000 range for varying levels of work from one Seattle company, but officials expect the total to run closer to $1 million. The ferry is insured by Lloyd's of London, but the policy comes with a $250,000 deductible. That's what Moosey wants the buyer to agree to pay.

The Mat-Su got the Susitna at low cost -- it was "free" though the borough paid about $2.4 million in matching funds required by federal grants -- but ran into trouble building ferry landings and justifying the craft's high cost of operations.The ferry never left the Ward Cove dock near Ketchikan where it has racked up more than $2 million in storage and insurance bills since the borough acquired it in 2011.

If the ferry sells, any money left over after the deductible is paid would go to the Federal Transit Administration, officials say.

Moosey hopes to present the assembly with a final sales offer to approve at a July 21 meeting.

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