Boatline Issues Divide Board

Future of Once Proposed Parking Lot Property Triggers Sharp Debate;
New Bedford Suit Runs Up Big Legal Bills

By JULIA WELLS

Gazette Senior Writer

NANTUCKET - An old skeleton tumbled out of the closet
yesterday when Steamship Authority governors took up the thorny question
of selling the Blacksmith Shop Road property in Falmouth, in a
passionate discussion that revealed fresh fault lines on the boat line
board - especially between the Falmouth and Vineyard members.

"I am not suggesting that we sell this land today, but I am
suggesting that we begin the appropriate level of negotiation with the
town," said Falmouth boat line governor Galen Robbins.

"I don't believe Falmouth wants to use this property as
open space; I think they have some agenda to develop it," declared
Vineyard boat line member Kathryn A. Roessel. "And giving 40 acres
to Falmouth to develop is like enabling an alcoholic. They are going to
build more houses, create more traffic and then blame us for the
traffic."

The comments came during the monthly board line meeting held on
Nantucket yesterday. Held in the Nantucket High School, the meeting went
on for more than three-and-a-half hours as board members tackled an
array of boat line business. The meeting was sparsely attended, but from
financial reports to passenger surveys, nearly every item on the agenda
fired deep discussion among board members.

The Blacksmith Shop Road property was one example. The topic
surfaced when SSA general counsel Steven Sayers gave a report on the
outcome of an appraisal that the board had requested two months ago for
the property.

The 40-acre property has a long and controversial history. The boat
line bought the property in 1988 for $1.2 million with an eye to develop
it as a parking lot. But the plan turned sour amid fierce opposition in
the town of Falmouth and the later revelation that then Falmouth board
member James H. Smith had a business relationship with the seller of the
property.

The SSA still owns the property, and in January the subject of what
to do with it came back onto the table. Board members agreed to take
steps to sell the property and get an appraisal. They also agreed to
consult with the state inspector general about the possibility of
selling it to the town of Falmouth for less than market value.

Mr. Sayers later reported that the inspector general had said that
the board could sell the property to the town without putting it out to
bid. The SSA was also advised to not sell the property for less than
market value.

Yesterday, Mr. Sayers said The Madlon Group in East Sandwich had
come in with an appraisal between $900,000 and $1.3 million. Mr. Sayers
said the company used two approaches to determine value: comparable
sales and developing the property as a residential subdivision.

The complete report has not been received yet.

Ms. Roessel moved to defer all discussion on the issue until the
complete report was in. But as he did in January, Mr. Robbins prodded
the board to take more steps toward a possible sale to the town.

"I am in favor of opening up formal discussions with the town
of Falmouth to see what they want to do," Mr. Robbins said. He
proposed that the board begin discussions with the town and engage a
local attorney to assist with the deal.

Ms. Roessel questioned the need.

"I don't think it's that complicated. All we need
to do is have our CEO contact the town of Falmouth and say that the
value of the property is X, and we would be happy to sell it if you
write us a check for X - amen, end of story," she said.

"I personally am opposed to selling this land right now;
it's an appreciating asset," she added. She suggested the
SSA consider putting a conservation restriction on the property to
ensure that it will remain as open space.

Robert Murphy, the Vineyard member of the financial advisory board,
reiterated his opposition to selling the property.

But Mr. Robbins held fast to his own position that the board should
begin talks with the town to craft some kind of deal for the sale of the
property.

"This represents a commitment to the community and I hope we
can get out of our own way on this," he said.

One other curious piece of history came out yesterday in connection
with the Blacksmith Shop Road property. Boat line treasurer Wayne Lamson
said the original $1.2 million purchase price was offset by some
creative accounting when the SSA sold the tax benefits on the
depreciation rights of the ferry Eagle. The tax benefits were sold to a
company in Davenport, Iowa, for $2 million, he said.

In the end the board voted 2-1 to appoint a Blacksmith Shop Road
working group that includes SSA chief executive officer Fred Raskin, one
board member, Mr. Sayers and the Falmouth town administrator.

Mr. Robbins and Nantucket governor Grace Grossman voted to approve
the plan; Ms. Roessel voted against it.

The boat line board tackled a long list of other business yesterday,
among other things giving the green light to Mr. Raskin to develop a
passenger survey to evaluate the ferry market between New Bedford and
the Vineyard. The proposal had the immediate effect of opening up some
old wounds. Mrs. Grossman said she will support a passenger survey, but
she spoke out adamantly against evaluating the New Bedford market for
freight while the port city continues to press its lawsuit against the
SSA in federal court. Mrs. Grossman also pointed to the move by New
Bedford last fall to pull the plug on the freight program between New
Bedford and the Vineyard this year.

"We are in the middle of litigation and New Bedford is saying,
‘We don't want you.' I really disapprove of this
[portion of the survey]," Mrs. Grossman said.

Ms. Roessel had another view. "I think information is a good
thing to have as long as the information is accurate and the surveys
aren't designed to come to some predetermined conclusion,"
she said.

"I have to confess some confusion here about what marketing
issue we should be researching, simply put," Mr. Raskin said.

He also reminded the board that it has an agreement with the town of
Barnstable to develop some kind of off-Cape ferry port in the next five
years; at the same time he concurred with Mrs. Grossman and others on
the board that the New Bedford litigation is an expensive nuisance.

"This foolish litigation is very silly and very expensive, and
I don't think it will provide any solution," Mr. Raskin
said. "But we do have a commitment to Barnstable and that clock is
ticking. I don't know if this survey will solve that, but we
should do something."

In the end the board told Mr. Raskin to go ahead and develop the
survey, in consultation with Daniel Greenbaum, a traffic expert and
Vineyard resident who offered to assist with the survey at no charge to
the boat line.

Mr. Raskin also gave a brief update on the Flying Cloud, the
Nantucket high-speed ferry that went out of service last week after the
engine malfunctioned, causing an accident. Mr. Raskin said the ferry is
back in service, but he acknowledged that it is operating with only one
of two T-foils after one was torn off in the accident.

The T-foil is a device that stabilizes the ferry. Mrs. Grossman said
she had heard complaints about the lack of comfort on the boat.

SSA engineer Carl Walker said it may take several weeks to replace
the part, because the new T-foil must be ordered from Tasmania.

This drew comment from Ms. Roessel. "Maybe we could think
about this the next time we purchase equipment. I mean, could we get any
farther away?" she said.

During a report on operations at the outset of the meeting, the
board learned just how much the New Bedford litigation is costing the
boat line. Mr. Raskin said year-to-date operating numbers are generally
healthy: Cash is up ($18 million in operating and special purpose
funds), revenues are up and expenses are down, with the exception of
legal expenses, which are now running at about $100,000 a month.

Nearly all the expenses can be tracked to the New Bedford
litigation, and when the bills are paid at the end of this month, Mr.
Raskin said the SSA will have spent some $500,000 on legal expense bills
from attorneys at Ropes and Gray in Boston for the litigation. The city
is suing the SSA, claiming restraint of trade violations.

The report on legal expenses drew sharp reaction from Nat Lowell, a
Nantucket trucker who attends most boat line meetings.

"Thanks to [New Bedford city solicitor] George Leontire our
once simple boat line has become an Amtrak. . . . It's become
complicated, and not because of the boats but because of the
politics," he said.