Page Seventy-Two

05 FEBRUARY 2006

Hmm.  Will they or won't they?

 

 

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Toronto ferry deal raises legal issue
Gary Craig
Staff writer

(February 5, 2006) — The Toronto Port Authority has always considered Rochester to be the financial safety net for the now-dead ferry operation, according to a Port Authority official.

That stance, if upheld by courts, could leave the city on the hook for any outstanding debts under a 14-year lease agreement between the Port Authority and the Rochester Ferry Co., the entity established to own and operate the ferry.

"As we were doing (the contract), they wanted to set up the Rochester Ferry Co. and we wanted something behind the agreement," said Ken Lundy, the engineering and operations chief for the Toronto Port Authority.

What's at stake
Rochester taxpayers could be obligated to pay nearly $3 million to the Toronto Port Authority if the city is responsible for remaining years on the 14-year lease. If the issue goes to Canadian courts, the losing side probably would have to pay all legal costs, too.

The 2005 lease agreement, which set the costs and terms for the ferry service to use a recently built terminal in Toronto, says nothing about obligations on Rochester's part.

That fact has created a somewhat ambiguous legal question for current city officials, who are trying to determine whether the city is responsible for lease payments once the ferry company disappears.

Former Rochester officials involved in the contract negotiations contended that the city wouldn't be responsible should the Rochester Ferry Co., or RFC, be dissolved, records show.

"The city of Rochester, notwithstanding the expressed desires of the (Port Authority), is not guaranteeing the RFC's obligations, and bears no obligations in the event of a default by RFC," according to minutes from a June 2005 Rochester Ferry Co. board meeting.

Former corporation counsel Linda Kingsley said that, as the minutes indicate, Port Authority officials wanted the city to be a guarantor under the lease, but the Rochester Ferry Co. refused. In turn, she said, the city has no financial risk under the deal, which required the ferry company to pay $250,000 (Canadian) a year to the Port Authority for docking and terminal use. That could add up to almost $3 million (American) for city taxpayers.

The contract also stipulates charges for the number of passengers and cars using the terminal but, without the ferry service, those costs would cease.

Mayor Robert Duffy announced in January his decision to pull the plug on the ferry service, saying the costs and risks were too great.

The Rochester Ferry Co. will continue to exist until the ferry is sold, after which it likely will be dissolved. And then city officials will have to determine whether the city is responsible for the millions that could be owed if the Port Authority wants payment for the remaining 13 years on the lease.

"We do believe that the city of Rochester backs that agreement," Lundy said.

Corporation counsel Thomas Richards said in a recent interview that the city hasn't ruled out that it might have to make payments to the Port Authority.

"There is a potential obligation in terms of the Toronto lease," he said.

Protection from liability?

For now, the contractual issues are largely hypothetical because the Rochester Ferry Co. still exists and its payments are current. Plus, City Council recently approved legislation from the Duffy administration to set aside more than $9 million for outstanding ferry-related costs, including costs that may be owed to the Port Authority and Bay Ferries Great Lakes LLC, which was contracted to operate the ferry. Last week the city pulled $3.2 million from that fund to reimburse Bay Ferries for debts it built up with the ferry operation.

City officials are trying to determine their obligations under the lease, said communications director Gary Walker.

Operating under New York laws, the city created the Rochester Ferry Co. as a limited liability company, or LLC. Common in the private sector, an LLC provides the city with a level of protection from liability.

The lease agreement, if ultimately the center of a legal imbroglio, could test just how much protection there is.

City taxpayers served as guarantors for agreements between Bay Ferries and the Rochester Ferry Co., as well as for the $40 million loan the ferry company secured from the Export Finance and Insurance Corp., an arm of the Australian government, to buy the ferry.

But no such guarantee was etched into the Toronto terminal lease agreement.

The deal did establish mediation to resolve any disputes. Should those attempts fail, outstanding legal issues would be resolved in Canadian courts, according to the agreement.  (By design?  There must be SOME reason why Canadian courts were selected.  Think about that for a minute.)

That fact could give city officials pause. In Canada, the losing side of a civil case typically pays all legal bills for both sides, said James Harbell, a Toronto-based lawyer who specializes in municipal law.

'Piercing the veil'

The fact that the lease contract does not state that the city guarantees unpaid costs is not, by itself, a legal safeguard, according to lawyers in both Canada and the United States.

In corporate law, there is a term known as "piercing the corporate veil," which means a successful legal attempt to show that a legally established entity is, in essence, no different from its creator.

The same concept carries over to municipal law, both in Canada and the United States.

If it could be proven that the Rochester Ferry Co. was nothing more than an arm of City Hall, then a case could be made that the city is responsible for debts, lawyers say.

In New York or Canada, however, it's not difficult to create a stand-alone LLC immune from liability, the lawyers say.

"It really doesn't take much to maintain enough difference between the two to avoid the 'piercing of the veil,'" said William Moehle, a local lawyer who serves as town attorney for Brighton.

The Rochester Ferry Co., for instance, maintained its own financial and banking records and operated at the behest of its board. Those steps could be enough to shield the city, said lawyer Charles Valenza, who served in the 1980s as Monroe County attorney.

Of course, city officials hope the legal issues stay academic. And officials with the Port Authority and the city appear inclined to try to resolve any issues amicably.

But should the issue make its way to the courts, the fight could provide fireworks — arcane legal fireworks.  (It's doubtful it'll get that far.  In the Grand Scheme of things, $3 million is hardly worth the legal costs and resultant ill will.  Not to mention any possible international diplomatic bruising.)

"It's one of those things that's almost like a law school exam problem," said Jeff Wilker, a Toronto-based lawyer who specializes in municipal law.

GCRAIG@DemocratandChronicle.com

Much ado about diddly?  Maybe.  Sells newspapers though and somehow fuels imaginations with thoughts of some Canadian-U.S. tiff.

$3 million would really help pay down the cost of building the Toronto terminal which would prop up the sagging popularity of the Toronto Port Authority so maybe there's some incentive after all.

06 FEBRUARY 2006

Cautious optimism.

 

 

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Haul in financial catch at Lake Ontario center
John R. Halstead
Guest essayist

(February 6, 2006) — As the Democrat and Chronicle reported Feb. 1, the proposed Lake Ontario Natural Resource Center holds great potential for Rochester and the region. It also holds great promise for the State University College at Brockport and our core mission. As Rochester's public university, it is our responsibility to engender the public trust and to extend our mission of teaching, research and service to the greater Rochester area we serve.

KARIN VON VOIGTLANDER file photo 2004
The Rochester ferry terminal is one possible site for the Lake Ontario Natural Resource Center.

First and foremost, this exciting center, as proposed, can be a focal point for research and education to better understand Lake Ontario and Great Lakes ecology. Laboratories, classrooms, a 150-seat auditorium and an aquarium would provide local and visiting scientists and students with the resources to better understand the vital Great Lakes ecosystem that holds nearly one-fifth of the world's fresh water.

Community and school outreach programs would bring local citizens, elementary and secondary school students to the center to see applied science at work and to learn about the Lake Ontario environment. There's no doubt in my mind that it also would stimulate young students' curiosity to pursue an academic degree and a professional career in the sciences — a primary goal as advanced recently by both SUNY Chancellor John Ryan and Gov. George Pataki.

In addition, this initiative can be a timely and exciting new waterfront revitalization concept for the Port of Rochester. As the only scientific research complex on the U.S. side of Lake Ontario, the center would stimulate year-round community and business relationships, drawing local and regional Seaway Trail visitors to Port of Rochester area businesses.

This project would also enrich Rochester's waterfront revitalization program, which calls for an enhancement of the area's environmental, historical and cultural resources, increasing tourism and the quality of life for local residents. This, too, is part of our role as an "economic engine" as pointed out by both Mayor Robert Duffy and Monroe County Executive Maggie Brooks.

Job creation, for both the short and long term — from architectural and construction jobs to academic positions — would be an additional benefit, increasing state and federal research grant dollars coming to the area. The center has the potential to develop into a Center of Excellence in Research on the Great Lakes.

Projects such as this are complex and require the support of citizens, as well as that of local, regional, state and federal institutions.

While the Lake Ontario Natural Resource Center is in its early planning stages, it has already benefited from substantial support from Rep. Tom Reynolds, R-Clarence, Erie County, and Rep. Louise Slaughter, D-Fairport. I look forward to continuing conversations with our congressional representatives, Mayor Duffy and County Executive Brooks.

As a public university with a public responsibility, SUNY Brockport is compelled to take our civic roles seriously — what the American Association of State Colleges and Universities has called "stewards of place." We want to be good stewards of our natural resources and we look forward to working with all who hope to see the Lake Ontario Natural Resource Center grow from a good idea into a living reality that benefits the entire Rochester region.

Halstead is president, SUNY Brockport.

SUNY Brockport President Halstead presents an intriguing view on what to do with the former ferry terminal and the idea has a great deal of merit and possibilities.  The cause is noble and the concept is solid.  As presented, the proposal is appealing if extremely small and limited in scope... which might be its undoing. 

But starting small and moving forward is a prudent course of action and one which might have made more sense for the ferry...  MIGHT have made sense... or at least not have pounded the Rochester community into the financial ground.  Toronto still doesn't give a flying fig about the Rochester area no matter what size the boat.

President Halstead makes a serious error in logic, though and it's one which appears to be endemic to this region.  Phrases such as 'would bring', 'would stimulate', 'would be' are forward thinking projections based on reading tea leaves and little else.  NOBODY can predict the future and if they can, please contact me and let me know what stock to invest in so I can make a boatload of money as was the case in Microsoft.  I need to move north for my 'retirement' years.

As soon as I start reading about so-called 'experts' prattling on about what will or won't be the case in the future, red flags fly up left and right.  These 'experts' certainly HOPE certain actions will happen, but they are no more imbued with the power of predicting future events than I am.

Seems to me, someone once said "the ferry WILL provide hundreds -- if not thousands -- of jobs in the Rochester area".  Where are they?  Quite obviously, those predictions were completely wrong and those who made them, completely lied.

'Can be', 'might be', 'could be' are far more accurate observations and closer to the truth than saying "Job creation, for both the short and long term — from architectural and construction jobs to academic positions — would be an additional benefit, increasing state and federal research grant dollars coming to the area."  You don't 'KNOW' that to be a fact, President Halstead and considering we've all heard this line of crap before -- NUMEROUS times -- it's behooves you to simply suggest that jobs creation MIGHT be an additional benefit.  Don't be making promises you can't keep and don't be stating something that either may or may not happen.

Other than that, the idea of a Lake Ontario Natural Resource Center is great... and something that's been hinted at in this tirade for a few years.  I envision a Monterey Bay Aquarium-style centre but readily admit the cost would be astronomical.  Still, taking a look at how much was sunk into the ferry project, I think it would be doable.

Classy beats kitschy any day of the week, but for an area which whores itself daily in the quest for the Almighty Buck, I don't hold out much hope for enthusiastic public support of something as cerebral and esoteric as a Center for the Study of the Great Lakes.  In the Rochester area, if it's not a scheme to churn out personal or public profit, it's a scheme that's dead before it makes an appearance.

Just ask Dominic Delucia.

09 FEBRUARY 2006

This might work.

globandmail.com

Small Business

POSTED AT 2:53 PM EST ON 07/02/06

Entrepreneur eyes Lake Ontario ferry service

Canadian Press

St. Catharines, Ont. — A Toronto entrepreneur is hoping to launch a ferry service between Toronto and the Niagara region as early as this summer.

Dale Wilson said both areas are losing millions in tourist dollars because visitors don't want to make the two-hour car trip between them. (Two hours??  Is that by a moped?)

He said his proposed 25-minute water link would increase that figure dramatically.

Wilson will be sailing against the prevailing winds of history with the project.

In the last 20 years, all previous attempts to run a ferry service across Lake Ontario have ended in financial grief.

Earlier this month, the city of Rochester, N.Y., announced it was scuttling its high-speed service to Toronto after forking out $32 million to purchase an Australian-built catamaran from a private operator last year.

Operating costs and low ridership turned the ambitious project into a $40 million failure after only 11 weeks of service last year. The city is now trying to resell the luxurious vessel.

Wilson said he believes that project's demise has opened a wider window of opportunity for his planned service to St. Catharines or Niagara-on-the-Lake.

"We're centre stage now. There's light at the end of the tunnel."

He said the Rochester ferry was doomed to fail because the massive boat — which could accommodate 775 passengers and 225 cars — was too costly to keep afloat.

By contrast, his 33-metre craft would have a seating capacity of only 155, with no cars, and would whip passengers across the lake in 20 to 35 minutes, up to three times a day.

The trip would cost $12 to $15.

Wilson estimated it will cost about $10 million to put his boat in Lake Ontario and said he has raised about 70 per cent of the funds from private investors so far. He said he is currently negotiating for landing sites.

Geography time.

First, I don't know how Dale Wilson can say it takes two hours to drive between St.Catharines and downtown Toronto unless he's one of those irritating nebbishes who actually drive 120kph on the QEW.  You people would be better off taking side roads if you don't intend to keep up with traffic.

Even driving 120kph, it still can't take two hours as it's only 100km from the QEW/405 split to Toronto.

God.  When are these business-types ever going to stop exaggerating for their own gain?  Sluts and whores will say anything for a fast buck.

Secondly, this proposed route -- despite the wild prevarications -- has a modicum of merit for those who work in downtown Toronto and live in Regional Niagara because the astronomical cost of housing in the GTA.  While Rochester area residents are fussing over the benefit of a 9-minute commute versus a 19-minute commute, the rest of the Real World routinely has commuting times in excess of 60-minutes or more.  One way.  It's called being able to afford more house in a more desirable location and it's done all the time.

San Francisco.  New York City.  Boston.  Washington DC.  Los Angeles.  Small-town Rochester can't imagine it, but it's true nonetheless.

The Niagara region is a fantastic place to live, work and play but if the Big Bucks are to be found in the nation's largest city, it's worth the drive to some people.  My family on Six Nations does it all the time and while they'd certainly prefer to not have to burn up over two hours of their personal time each working day, they go where the money is.

So a 25-minute ferry commute to work is a welcomed relief from the grind of rush-hour QEW/Gardiner traffic.  To downtown, that is.  Anywhere else in the GTA and the ferry idea is pretty much of a wash.

Still, if a cross-lake transportation link is to work, my guess would be the St.Kitts-Toronto route might just have a smidgen of a chance at surviving... not that there's a huge crowd of downtown Toronto workers living in the St.Catharines area.

Corporate entrepreneurial whores really bug the hell outta me.  Somebody needs to duct-tape their mouths and let them pimp their wares elsewhere.  Sleazy, money-grubbing sluts who'd sell Mother Teresa's remains if they thought they could turn a quick buck. 

Cheap bimbos.  "Missa want boom-boom?  Me love you whole lot."

Entering the Court of Public Opinion:

"...While such scrutiny continues at home, the Toronto Port Authority might end up taking the city of Rochester to court if a promised $3 million in docking fees vanish in the wreckage of the cross-border fast ferry. At least defendants in such a case wouldn't need to look far to find Torontonians annoyed with the TPA's approach to watery business." 

Oh dear.  Now THERE'S a wrinkle we hadn't planned on.  City of Rochester 'leaders' and the adoring public have always thought of the folks across the lake as 'Toronto the Nice'.  Now we find out they just might be 'Toronto the Nasty'.  Tragic.  Truly tragic.

Now, let's not be coy here and pretend I'm not on the side of the Good Guys to the North.  After all, I have more in common with the northern folks than I do with the southern counterparts.  But looking past the admitted bias, let's take a closer examination to see if the TPA has a good case in court.

Would the Toronto ferry terminal have been built if the city of Rochester and one of its local Good 'Ol Boys NOT approached the Toronto factions involved with the 'fast' ferry?  Probably not.  To date, as far as I can see, the only reason Canadian cash was spent to built some $10 million terminal was to accommodate the landing of the pipe dream of a bunch of American Suits who salivated at the prospect of stuffing their own wallets.  That's called greed.

Whether the ferry floated or floundered, the simple fact remains that the Toronto ferry terminal needs to be paid off.  By whom?  Why should Canadian taxpayers have to foot the bill of some greedy and misguided American corporate exercise in poor planning, poor execution and poor performance?  True enough, the Canadian contingent bought into the fiasco but only with a host of financial backups to ensure the onus was on those who were promoting the concept.

Why SHOULDN'T the TPA and the Canadian government enforce the terms of the contract?  The blame for the failure of the ferry operation does NOT rest with any Canadian faction nor should any Canadian taxpayer have to pay for the stupidity of an American debacle. 

I say, let's go to court (Canadian court, as is written in the terms of dispute resolution and signed by the Americans) and let the legal system decide who deserves the $3 million.  Of course, should the courts decide in favour of the Canadian interests, that would mean the Americans will pay not only the $3 million, but also all the costs of going to court as is the Canadian way.

'Toronto the Good' might take on a decidedly darker hue in the eyes of Rochester area residents should the contract squabble get more shrill.  That might mean a Rochester boycott of the GTA is a remote possibility.

I guess it's a win-win situation after all.

13 FEBRUARY 2006

Sentimental fluff.

 

 

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Letters to the editor
(February 13, 2006) — A farewell cruise for the ferry

As a huge fan of the ferry, I have been very disappointed to see the turn of events that has taken place this year.

While it is sad, it was absolutely the right decision for this city. I believe that a smaller ferry owned by a private entity is what is really needed.

My friends and I were lucky enough to ride the ferry a few times. I suggest we give the boat a proper goodbye. It would be wonderful if we were given the opportunity for one last trip. The city could sell tickets for a final voyage to and from Toronto, or maybe even a day cruise around Lake Ontario with a stop in Toronto.

I'm sure there are many residents in Rochester and Toronto who would pay for one last chance to ride the ferry. (I see.  And that confidence is based on....?) The money raised could be donated to a charity.

DUANE GOSLEY
ROCHESTER

Calling the Department of Rational Thinking:  Please send a case worker out into the field.

Here's a suggestion or two for Dane Gosley.  First, considering the highest passenger days in the brief life of of Ferry Part Deux STILL didn't adequately cover the price of fuel in amounts to make a decent profit, how's this scenario?

The City of Rochester relents and decides to grant the Duane Gosleys of the world one last huzzah with a Final Cruise.  Not wishing to drive the city taxpayers into footing yet more debt, the Ferry board puts out ticket sale reservations with the ticket price to be determined by taking the gross amount of the cost of a final fling to be divided by the number of passengers.  That would include salaries, fuel, pilotage/docking fees and any other incidentals associated with sending the ship out on the lake.  After all, why should the taxpayers pay for the jollies of a bunch of ferry riders wishing for one last joy ride?

That would cover the cost of the boat ride... period.  As for "The money raised could be donated to a charity", that would have to be added in separately... a surcharge, if you will... on top of the price of the ticket which would only cover the expenses.  Which charity?  I say, donate it to the Native American Cultural Center of Rochester and if it isn't, then that clearly shows how non-Natives are yet again ignoring the local residents of the First Nations. 

Someone else might demand an urban youth center be the recipient.  Others might claim the local historical society deserves more attention.  A faction might scream the plight of the local homeless is more important.  High-flyers might insist the local public golf courses are being neglected.  Senior citizens groups might push for the cash... as might disabled advocacy groups, animal rights groups, teen pregnancy prevention groups, youth workers, food banks, AIDS awareness groups, veterans groups, school football teams and wildlife conservation efforts.  Who gets to decide?  And why?

"I'm sure there are many residents in Rochester and Toronto who would pay for one last chance to ride the ferry."

Next, Duane seems to forget the entire reason the ferry business went bust was based upon the erroneous premise of predicting the future.  He has absolutely no grounds to support his contention that there are 'many' residents in either Toronto or Rochester who'd even cough up the cash for a final fling.  He's no more able to predict how many passengers would take a cruise than I am and frankly, there's been far too much speculating going on to keep allowing such vague assertions to continue.

If Duane and his type want to rent the ship and agree to cover ALL expenses associated with doing so, fine.  Have at it.  It's conceivable he and others could get together and charter a DC-10 for a cocktail party in the sky as well... and with a ferry capacity of 774 passengers... he'd have to rent at least TWO DC-10's to carry the same number of passengers. 

Ludicrous?  Of course.  But that's exactly what Gosley's suggesting.... AND he's suggesting there'd be money left over to donate to a charity.  The simpletons of the Rochester area are given space in the local fishwrapper to express their foolishness while in more progressive communities, they'd be mocked into humiliation and silence.

Maybe that's the tongue-in-cheek reason why the D&C ran the letter.

Or maybe it's a tangible sign that the ferry is rapidly fading from public consciousness.  Collective amnesia is a sure-fire cure to avoid embarrassing gaffes which are best left ignored and forgotten rather than used as a lesson learned and a mistake not to be repeated.  The superficiality of the Rochester area bourgeois is veneer thin.

26 FEBRUARY 2006

MORE sentimental fluff.

 

 

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WILL YURMAN staff photographer
Horseshoe Hospitality Inc., which ran the ferry’s gift shop and catering services, attracts hundreds to a sale Saturday. Among the crowd is, from left, Richard Duhan, Mary Ellen Cappon, Nicholaus Booth, 6, and Ann Marie Booth.
Ferry items snapped up
Ship's gift shop holds public sale to recoup some of its money
David Tyler
Staff writer

(February 26, 2006) — GREECE — Knickknacks, trinkets and other doodads from the former high-speed ferry gift shop were snapped up by hundreds of curious shoppers Saturday.

Horseshoe Hospitality Inc., the company that ran the ship's gift shop and catering services, held a public sale at its building in an effort to recoup some of its costs.

Bargain hunters started lining up 9:30, even though the sale didn't start until noon, said Daniel Bauer of Economy Auctions, which helped run the sale.

Horseshoe owner Kurt Ritchie said he was hoping to recover at least some of his costs, which ran into the hundreds of thousands of dollars.

"I went into this thinking it would be a long-term project," Ritchie said. (Your thinking was apparently wrong Kurt.) But Rochester Mayor Robert Duffy decided in January that the city couldn't bear the risk of continuing financial losses. The ship is now up for sale after running its Rochester-Toronto route for parts of only two seasons.

Everything from a 36-door walk-in freezer to the pots and pans are for sale at auction Monday, Bauer said. More than 500 interested bidders from Buffalo to Syracuse are expected.

If you go
What: Auction of Horseshoe Hospitality Inc.'s kitchen equipment and other items from the ferry.
Where: 116 Ling Road, Greece.
When: Previews start at 9 a.m. Monday and the auction at 10:30 a.m.

Saturday's sale brought out serious buyers who wanted a look at Horseshoe's kitchen equipment and appliances. The merely curious also turned out.

Musleh Musleh, who owns South Avenue Convenience Store, was looking for a fryer hood for his store.

"Maybe I'll pick something else up, too," he said.

William Nooitgedagt of Webster came with his family and left with a few T-shirts and other mementos.

"We always wanted to ride, but because of all the 'running/not running' confusion, we never got the chance," he said.

Tristen Mandara of Greece and her family never got the chance to take the ferry, either, but they did leave the sale with hats, tote bags and other gifts.

"I didn't think it was going to go under in a year," she said.

More than one interested buyer has visited Rochester to inspect the ship since Duffy announced Jan. 10 that the city was shutting down the service.

City spokesman Gary Walker said there have been "some inspections of the vessel by some interested parties, and that's positive, but we're not going to get into any more than that." He said the conversations have occurred on the condition that they be private.

"To say that there a narrowing of the field or potential buyer is premature," Walker said.

The city bought the ferry at federal auction a year ago. In the weeks leading up to that sale, Istanbul Fast Ferries Co. of Turkey and American Sealift LLC, controlled by J.F. Lehman & Co. of New York City, had expressed the strongest interest.

Former operator Bay Ferries Great Lakes apparently isn't in the running.

"To my knowledge, Bay Ferries has not placed themselves in the position of being an interested buyer," Duffy said last week.

DTYLER@DemocratandChronicle.com
Includes reporting by staff writer Brian Sharp.

Well, YASSS.  Let's just hustle over to Greece on a Saturday and wait around for 2-1/2 hours for the opportunity to buy fire-sale tee-shirts.  Use that time to travel to Toronto on the weekend?

Well, let's not be presumptuous here.  Just because we SAY we want a cross-lake service to the Emerald City doesn't necessarily MEAN we ACTUALLY want to use a perfectly good Saturday to visit the place.  We'd rather snatch up a cheesy souvenir or a lovely commemorative piece of stemware to hold the memory close to our hearts.  Toronto?  Yeah, yeah... sure, sure... whatever...

Anybody got any O-fficial Spirit of Ontario ashtrays?

Toronto as an afterthought taking second place behind nifty-keeno Rochester area toys.

Not to worry, though.  Toronto never cared in the first place... and still doesn't.  Now go screw To next page up somebody else's port and leave the Canadian destinations out of the scheme... errr... plan.