Tuesday, August 14, 2007

TheBollard.com

August 7, 2007

City plans showing the Maine State Pier, left, and Ocean Gateway, at right, with the megaberth, below right. (image/City of Portland)

Megaberth, mega-mess
Maine State Pier deal excludes Ocean Gateway – or does it?

By Chris Busby

Buried deep in the now towering stack of documents about potential redevelopment of the Maine State Pier is a short paragraph that could turn the entire process upside-down.

It's in a June 14 memo to the Portland City Council's Community Development Committee – cc'd to City Manager Joe Gray and top city planning and finance staff – from Portland Ports and Transportation Director Jeff Monroe.

Monroe's five-page report outlines significant questions and concerns regarding how the two private developers vying to remake the pier plan to handle traffic, passengers, and public access at the site. He ends with this…

"It is unfortunate that we had insufficient funding for the megaberth (Pier 2 – Berth 2 and 3). If this berth was available and was used for primary cruise ship operations, all of the operational issues at the Portland Ocean Terminal (Maine State Pier Berth 1) would be mute and the process would be much less complicated."

Less complicated, indeed – if not wholly unnecessary.

The "megaberth" has long been planned as part of the city's Ocean Gateway marine passenger terminal next to the Maine State Pier. This long dock could handle vessels of 1,000 feet or longer – the length of most new ships in the cruise market these days.

In the works for nearly a decade, Ocean Gateway is expected to be operational next year. But after an extensive public planning process, construction cost estimates turned out to be way off the mark – originally projected to be a $15-$18 million project, the price tag reached nearly $21 million in city, state and federal money.

This cost increase put plans to build the megaberth on hold, so Ocean Gateway will be limited to serving the CAT high-speed casino ferry and smaller cruise ships at its single, shorter berth next summer. The Maine State Pier will still be used to berth longer cruise ships, as well as large military vessels and tankers in need of fresh water, supplies and repairs.

If the Maine State Pier is to continue to be the primary berth for big ships for years to come, it will need to be reinforced to withstand the structural stress these large vessels create when tied to its dock. It could cost several million dollars to sufficiently strengthen the pier for this purpose.

That cost is a primary reason the city is considering private development of the public pier. The two bidders, Ocean Properties and The Olympia Companies, propose to spend their own money to repair and maintain the pier's pilings and decking, but say they need to build over $80 million worth of commercial real estate at the site (including hotels, office buildings, restaurants and parking) to cover those costs.

The traffic, pedestrian and security issues created by all this new development – issues brought up in Monroe's June 14 report – are still largely unresolved, at least from the city's perspective. By contrast, Ocean Gateway already has the facilities and layout designed to accommodate traffic, public access, and marine passenger security.

And compared to the cost estimates for rebuilding the Maine State Pier, the megaberth is a bargain. "It's not that expensive," said Monroe. "The megaberth is only about $6 million."

In fact, the city initially considered building Ocean Gateway at the Maine State Pier, but traffic and engineering studies convinced officials that constructing a new facility with a megaberth two blocks east of the pier was the wiser course.

"Both developers are facing what the city faced in 2000: how to make the Maine State Pier work more effectively by keeping [cruise ship] operations there," said Monroe. "Both have come back and they think it's a very good idea to build the megaberth and alleviate pressures on the Maine State Pier, which I personally think is a good idea."

"Captain Monroe makes a compelling case to look at the megaberth and moving some of that traffic further [east] down Commercial Street," said Ocean Properties executive and project spokesman Bob Baldacci, brother of Gov. John Baldacci. "Traffic and parking are huge issues."

City officials still hope the megaberth will be built. Gray said the city lobbied Gov. Baldacci's office to have $6-$8 million included in this year's state bond package for its construction. But convincing state lawmakers to ask voters to borrow more money for cruise ship operations in Portland "has just been very difficult, if not impossible, to do," said Gray.

Both private development teams have offered to build the megaberth with their own money as part of their pitch to lease the Maine State Pier. Both have further suggested the city consider allowing them to operate Ocean Gateway. (In its original proposal for the pier, Olympia even floated the idea of taking over the International Marine Terminal, the city-owned facility at the other end of the waterfront that handles cargo and currently hosts the CAT ferry.)

The fate of the megaberth has huge implications for the Maine State Pier's future. But the idea of even discussing a deal that includes the megaberth with Ocean Properties or Olympia has become radioactive in City Hall.

That's because Ocean Gateway is not part of the official Request for Proposals (RFP) the city publicized last fall for the Maine State Pier property. To throw Ocean Gateway or the megaberth into the mix at this stage could cause a public uproar even more intense than the ongoing scandal over the city's handling of the pier RFP process thus far.

(As detailed in our July 11 article [see "Threats and confusion plague state pier process"], the Olympia team and some city councilors object to the Community Development Committee's decision to consider major changes Ocean Properties made to its proposal after the Feb. 22 submission deadline. The committee subsequently voted 2-1 to recommend that the city negotiate with Ocean Properties first. Olympia has threatened legal action. During last night's informational workshop session on the proposals, councilors argued again over the legality of considering OP's altered plan.)

Most councilors reached for comment said discussion of Ocean Gateway and the megaberth is "off the table" during this process.

"That sounds to me like a separate transaction," said Councilor Jim Cloutier. "If we build the megaberth, fine, but that's not the purpose of this operation… We're trying to get $20 million invested in [the repair and maintenance of] the Maine State Pier and collect a rent check."

"At this point, I don't think it'd be appropriate to consider Ocean Gateway and the megaberth," said Councilor Dave Marshall. "To do anything except what's in the RFP would be a violation of what's in our written [RFP] document."

Marshall and several other councilors said the city would likely have to issue a separate RFP for the private operation of Ocean Gateway or construction of the megaberth. But the legal issues at stake are unclear.

City attorney Gary Wood declined to comment on the legalities involved. "I'm not going to answer those types of questions," he told The Bollard before last night's workshop session. His tone and expression suggested a wariness to further stoke contention over the RFP process.

Councilor Jill Duson, a member of the Community Development Committee, expressed the same wariness, but added, "I suppose as the full Council goes through the process, it's possible they would expand the discussion to include [the megaberth]… If a majority of the Council wishes to expand the discussion, that would be fine with me."

Duson – who, with Cloutier, endorsed OP as the recommended developer during the committee vote – placed more importance in moving the RFP process along. "The two camps and our constituents deserve for us to make a decision as to who we're going to negotiate with, and move forward and get this project done," she said.

For others, however, the prospect of building the megaberth is cause to pause the RFP process and consider the wider implications of the Maine State Pier's redevelopment.

"Crucify me for stepping back and saying Ocean Gateway was not in the RFP process," said Councilor Ed Suslovic, "but I think it would not be serving the city of Portland very well to look at this project in a vacuum."

"If both developers are hinting that we really ought to be including Ocean Gateway in here, maybe we do need to go back and say, ‘In order to be fair to all involved, we're gong to do a new RFP, because it doesn't make sense to talk about berthing cruise ships at the Maine State Pier without the possibility [of including Ocean Gateway in the deal],'" Suslovic added.

Of course, Olympia and OP have already done much more than hint about expanding and operating Ocean Gateway – they've specifically offered, in writing and during presentations, to do just that.

"It's obviously something [city officials] have to think about, because both facilities should be integrated," said Olympia spokesman Sasha Cook.

The RFP does ask developers to "discuss ideas and accommodations" for vehicle queuing lanes at Ocean Gateway as part of their pier plans, but there's no mention of operating the facility or building new berthing space there.

Cook is among those who think consideration of further development or private operation of Ocean Gateway "falls outside of this current RFP… The city would probably get the greatest value if they did a separate RFP for the megaberth," he said.

Councilor Kevin Donoghue, who cast the dissenting vote on the OP recommendation at the committee level, agrees that Ocean Gateway and the megaberth should be "off the table" during this RFP process. "To increase the spoils for a political outcome would not be a good idea, to my mind," he said.

Former planning board member John Anton, a City Council candidate and vocal critic of the city's approach to the pier, said discussion of the megaberth highlights the need to consider the broader impacts of the Maine State Pier's redevelopment.

The private developers are proposing to spend upwards of $20 million to repair and reinforce the Maine State Pier so it can support the full scope of their plans. "You could do the megaberth for $13 million cheaper and it would flow better into Ocean Gateway, which is intended to serve that purpose," said Anton.

"Let's just call a time-out," Anton added. "Take six months and make sure we're on the right course."


Chris Busby is editor and publisher of The Bollard. He can be reached at editor@thebollard.com.

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