BAR HARBOR — Town councilors in Bar Harbor have approved an agreement to lease a former ferry terminal to the company that left the property nearly a decade ago.
The council voted 7-0 Tuesday to allow the town manager to sign a lease agreement with Atlantic Fleet Services, a Bar Harbor-based agent for Bay Ferries Ltd. Bay Ferries operates The Cat ferry, which makes trips between Maine and Nova Scotia.
The company will move its operations to Bar Harbor from Portland as part of the deal.
In June, Bar Harbor voters overwhelmingly approved a $3.5 million purchase of the ferry terminal from the state of Maine.
In a business plan for the terminal put together by Bermello Ajamil, Bay Ferries said it was prepared to invest $3 million to ready the terminal for ferry use. The business plan also includes using the terminal for a marina, boat ramp and cruise ship tendering area.
The company intends to lease space from Bar Harbor, and plans would be developed in close consultation with the town and U.S. Customs and Border Protection, Bay Ferries CEO Mark MacDonald said.
“It is estimated that BFL would be able to make the necessary marine and facility improvements in time to initiate operations by the beginning of the 2019 season,” the report said.
In the business plan, Bay Ferries said it could reach up to 80,000 passengers a year by 2021.
Bay Ferries says it hopes to launch the ferry service in June.
Opponents of the deal say the vote was rushed and argue there should be a marina where the planned ferry terminal will be located.
The loss of the high-speed ferry from Portland means people from the Portland area and south would have to drive at least three more hours to board a ferry for Nova Scotia. Portland officials have said they hope the ferry’s departure will open up opportunities for waterfront development.
In June, the Portland City Council’s economic development committee agreed to delay pursuing redevelopment of the state pier, near the ferry terminal, while awaiting Bay Ferries’ decision.
Luxury condominiums and the new headquarters for Wex, a global payment-processing company, are under construction across Thames Street from the ferry terminal. Sandwiched between the developments is a new AC Hotel.
Between 2014 and 2017, Portland earned $3.8 million from cruise ship passenger fees, compared with about $672,000 in fees from the international ferry. In 2017, The Cat carried almost 41,500 passengers, up 17 percent from the year before. MacDonald said the ferry could have done better if it hadn’t suffered engine problems in late June last year.
Although cruise ships bring in more passengers, some question whether that translates to more economic benefit for the city. A Portland Press Herald analysis in June indicated that the city stands to lose about $200,000 in Ocean Gateway revenues, as well as 25 seasonal terminal employees and 12 Maine resident members of The Cat’s crew if the ferry leaves the city.
In the past year, Bay Ferries has been beset with troubles in Portland, including a sudden fee increase from the company that pilots large ships into port. Bay Ferries estimated the higher fee would increase the company’s cost by about $96,000 a year and it has fought the increase in court.
Last November, Customs and Border Protection said it would suspend passenger processing for the 2018 season unless the city or Bay Ferries made improvements to the facility estimated to cost $7 million. Portland officials said the city did not have the money for the upgrades, and Bay Ferries, with the help of the Nova Scotia government, eventually put up $1.5 million to allow screening this season.
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