2016-11-10 / Front Page

Ferry Company Changes Hands

By Stephanie Fortino

Last week’s announcement by Star Line that it will purchase the Arnold Transit passenger service leaves many questions unanswered, but CEO Jerry Fetty says the answers will come after the deal is consummated, on or before November 10, and the City of Mackinac Island reviews the five year contract it has with Arnold to operate winter ferry service between the Island and St. Ignace.

Star Line said last Thursday, November 3, it will purchase five Arnold Line passenger ferries and one freight boat, as well as Arnold’s Dock One and the Mill Slip and its boatyard in St. Ignace, the Union Terminal Piers passenger dock on Mackinac Island, and the Arnold dock in Mackinaw City. It is not purchasing the Arnold freight business, and Arnold is keeping the Coal Dock on Mackinac Island, the Favorite Dock in St. Ignace, and will continue to operate its freight business from the old state ferry Dock 3 in St. Ignace, which it leases from the City of St. Ignace. Arnold is also keeping its workhorse freight boat, Corsair, and its one remaining catamaran.

The boats being purchased by Star Line are the Huron, Chippewa, Ottawa, Straits of Mackinac II, and Algomah, all passenger boats, and the freight boat Mackinac Islander, which is in dry dock. Star Line plans to refurbish the freight boat, said Star Line CEO Jerry Fetty, who just finished his third season with the company.

Mr. Fetty says Star Line will pick up Arnold’s winter passenger service to Mackinac Island, although whether Star Line or Arnold tickets and resident passes will be honored won’t be determined until after the sale is completed. Since Star Line and Shepler have already ceased passenger operations for year, Arnold’s winter franchise with the City of Mackinac Island will have to be transferred to the new owner so winter operations can continue.

The deal puts to rest several years of speculation and uncertainty about the ultimate disposition of the Arnold Line operation, which has been owned and operated by a creditor for two years, a Cincinnati investment firm, following a foreclosure. The move to Star Line ownership sees the local assets going to a longtime local ferry operator that has been in business here since 1978, when local businessmen took over the former Argosy Boat Line. For Star Line, the deal has been about two years in the making, Mr. Fetty said, and the future holds much promise.

“It means we are going to expand our operations. It means we are going to have a lot more flexibility in what we can do and how we can do it. We will have more parking, more boats, and can offer more choices to our riders and Arnold riders, as well. We will offer them the same facilities and boats they’re used to riding and be able to enhance that experience on many different levels.”

Arnold Line, in business since 1878, has faced financial woes in recent years, most notably in 2014 when the investment firm, Mackinac

Island Ferry Capital LLC, foreclosed on its loans former owner Jim Wynn took to finance the purchase of the ferry company in 2010 from the Brown family of St. Ignace. One of Arnold Line’s catamarans was sold at public auction in 2015, with the Island Express catamaran joining the fleet at Pictured Rocks Cruises as the Pictured Rocks Express. Star Line acquired the Mackinac Express and added it to its fleet this summer. Mackinac Island Ferry Capital still has the Straits Express catamaran as a result of foreclosure.

The investment firm, which came by the ferry operation through foreclosure, never intended to own the ferry company in the long term, Mackinac Island Ferry Capital pointed out when it announced the deal to employees.

Included in the sale are the associated parking lots and storage barns owned by Arnold.

In downtown St. Ignace, Star Line also plans to purchase the ticket booths, Mr. Fetty said, including the booth on US-2 on the hill coming into town and the booth near the United State Post Office on North State Street.

Star Line plans to continue providing passenger service to Mackinac Island this winter, according to the winter passenger service contract Arnold Line currently holds with the City of Mackinac Island. In 2013, the city opened winter passenger service up for bids, and Arnold Line and Shepler’s Ferry offered to provide service. The current contract is scheduled to last until 2018, although the matter will likely be considered by the Mackinac Island City Council this week. The next council meeting will be held at 4 p.m. Wednesday, November 9, which Mr. Fetty plans to attend.

“The important thing for people to know is we’re going to continue to operate the contract as it states, unless the city wants something different,” Mr. Fetty said. “We’ll do everything we can to make it easy for the Island residents. We want to make the transition as easy as possible and just foster a lot of goodwill.”

This winter, Star Line will continue operating out of Dock 1 at St. Ignace and at the Arnold Dock on the Island. The company also intends to keep the same winter passenger service schedule that was agreed to in the contract.

Mr. Fetty intends to have Star Line captains and deckhands operate the Huron this winter, and he said the Huron may be out of service for a day or two while the crew is trained on the vessel, as likely will be required by the Coast Guard. During training, Star Line will run one of its fast ferries or the Anna May to and from the Island.

Mr. Fetty would not say yet whether Arnold Line tickets or commuter passes would be honored, saying the details will have to be discussed after the sale is finalized.

Arnold Line employees will be laid off as soon as the sale is complete.

“We’re in contact with the employees about what their position is with the company,” Brent Rippe of Mackinac Island Ferry Capital told The St. Ignace News. He would not comment further until the sale is final.

Mr. Fetty said Star Line will be accepting employment applications for 2017, and those interested should apply, an invitation that was extended to Arnold workers.

“Star Line, over the last three years, has grown tremendously,” he said. “We have a lot of great people who currently look at Star Line and we’re always looking for great people.”

The deal will leave Star Line the only competitor with Shepler’s Mackinac Island Ferry. Over the winter, Mr. Fetty and the Star Line crew will determine the logistics of summer passenger travel, mainly how it will use its large fleet of vessels and many docks.

“We’ve got a lot of work to do and a lot of thinking,” he said, “and we will come up with the best plan.”

Eventually, all of the Arnold Line aspects will be folded into the Star Line brand. Mr. Fetty also expects that some changes may be needed as the company incorporates its new assets into service.

“This is really a once-in-a-generation opportunity for Star Line,” Mr. Fetty told The St. Ignace News, “and I’m sure there might some things we have to tweak. I think there is a tremendous support for Star Line and the folks in this area, and we will do everything we can to make it successful. We’re looking forward to 2017.”

Mackinac Island Ferry Capital attorney Matt Vermetten confirmed that the company still holds the Arnold Line freight operations and associated real property and assets as a result of the 2014 foreclosure.

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