2008-05-22 / Front Page

Dutch Harbor Boat Yard ownership on rough seas

Conanicut Marine bids $1.8 million for boatyard
By Sam Bari

Dutch Harbor Boatyard partner Barbara Paterson gave the council a rose-colored update on the status of her marina at Monday night's Town Council meeting.

"We are going forward with refinancing," Paterson said emphatically. "We dedicated our lives to Dutch Harbor. We have put everything we have into it. We're not going anywhere. We're waiting for a closing date from several institutions and time is of the essence," she said.

Paterson said that the company was not in receivership.

After Paterson's report, Council President Julio DiGiando said, "We have to discuss what we are going to do with the property if your efforts are not successful."

"Other entities got in the middle and delayed my quest for fi- nancing," Paterson said. "That's why it has taken so long."

Despite Paterson's optimism about getting financing and her declaration that the marina is not going to be sold, an inch-thick, 15-part, bound document dated May 7 from the law firm of Ferrucci Russo P.C. of Providence says differently. The document is addressed to "All parties interested in bidding on the business, operations, and assets of DHBY LLC."

According to the document, Joseph P. Ferrucci has been appointed by the Providence County Superior Court as Special Master of Dutch Harbor. The document says specifically, "The Court has appointed me as Special Master in order to sell Dutch Harbor's business, assets and real estate for the benefit of its creditors."

The document also includes a May 6 offer to purchase the marina for $1.8 million from Conanicut Marine Services. The offer was signed and accepted by the Special Master on May 7. According to the document, a deposit of $90,000 was given to the Special Master with the balance due upon court approval.

The offer, however, is subject to higher and better offers that could be received before the June 2 bid cutoff date. The court is scheduled to make a decision on the winning bid on June 4.

Town Administrator Bruce Keiser said that should the marina be sold, he would like the council to entertain the idea of purchasing the business and turning the marina into a public sailing center similar to Sail Newport.

Keiser said that the public auction was advertised in a display ad in the Providence Journal two weeks ago. "The phones have been busy in the zoning department all week long," Keiser said. He asked if the council had any interest in the property. The council discussed the matter briefly before Councilwoman Barbara Szepatowski said that she didn't want to put the message out to the public that the council was in favor of or taking for granted that the property was definitely being sold. She said that Paterson should be given the chance to exhaust all possibilities to obtain financing.

"We don't want to see you lose the business," Szepatowski said to Paterson. "We sincerely hope you can arrange financing and get through this."

DiGiando cautioned the council about waiting too long without a backup plan. "I think we have to discuss our position in case things don't work out," he said.

Szepatowski asked if the council would consider posting the possibility of a meeting to further discuss the matter as a contingency plan.

Councilman Robert Sutton made a motion to put the matter on the next council agenda to "clarify the town's position on the use of the Dutch Harbor property should it be sold," he said. He also suggested that the use of the property other than a marina should at least be discussed. "Maybe there might be something we could do with that property that is more beneficial to the town," he said. "I think all possibilities should be considered."

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