2008-05-29 / Front Page

Dutch Harbor owner claims financing will halt auction

Council to hold special meeting tomorrow to discuss marina future
By Sam Bari

Dutch Harbor Boat Yard partner Barbara Paterson made a gleeful announcement at Monday's Town Council meeting that just before she came to the meeting she received a phone call that verified financing for the beleaguered facility.

The town's position on the Dutch Harbor Boat Yard, which is on the auction block under court order due to financial problems, was again a council agenda item. Town Administrator Bruce Keiser introduced the idea of the town purchasing the property and using it for a community sailing program if Dutch Harbor management could not arrange fi-

"The West Ferry property may become available," Keiser said. "I know that Barbara Paterson still remains optimistic, but I want to find out from the council if there is any interest in purchasing the property for $2.5 million. The property could generate over $200,000 per year, which would support a bond issue for $2.5 million. Jeff McDonough, the publisher of the Jamestown Press, and I worked out a plan that might be of interest."

McDonough said it was a way provide public access to the water and sailing. The program would be modeled after Sail Newport and offer the public access to boating, possibly through annual memberships.

He described how the program would offer sailing lessons for kids and adults. It could manage the commercial moorings in Dutch Harbor for seasonal and transient boaters, providing an additional revenue stream for a not-for-profit foundation. The foundation could also provide storage and launching for privately owned small keelboats. It might also manage a small fleet of sailboats that could be rented by members.

Paterson spoke up, saying, "Sorry Bruce. Sorry Jeff, but we have financing and we're moving forward. Your idea is something we've been entertaining for a long time, so it can still happen. Our financing is in place and everything will be back to normal in a couple of days. The marina isn't for sale. We're not going anywhere."

Keiser congratulated her and said, "Just in case things don't work out, we still have to discuss our options and position on the matter." DiGiando and councilman Bill Kelly agreed.

Keiser said, "A bid for $2.5 million would require a $125,000 binder, which we do not have. The best we can possibly do is proceed and submit a letter of interest and intent with a timeframe to respond with a financial offer. Obviously, it will be an unusual proposal for the Special Master to review."

Kelly suggested putting an organization together with a structure and a plan.

Town Solicitor Peter Ruggiero said, "If you're going to do anything, it has to be in the form of a bid, a letter will not do it."

Keiser said the idea would have to be presented and approved by the town before making a bid. Ruggiero said that since bids were due no later than 3 p.m. on June 2, putting a package together was an ambitious undertaking. Several of the councilors agreed.

Councilor Michael White said, "I'm happy for Dutch Harbor, but I think it's a great idea if that doesn't work out. If you can do it, I think it's a great idea."

Szepatowski said, "We should put together a meeting and include the harbor commission."

Sutton asked if it were possible to meet the requirements for a bid proposal. "Could we put in a proposal without the five percent down?" he asked. "I like the idea of doing something like that, but I can't get too excited about it if we don't have a good chance of being successful."

Ruggerio said, "We would have to make a contingency offer, and I think the creditor would be hard pressed to consider that above the others."

Keiser said, "We are talking to private money for the binder. However, we have to go to the voters of Jamestown before we can have a bond issue." He then asked if the council would like to meet on Friday to discuss the matter.

DiGiando said, "We should think about the use of that piece of property we lease to Dutch Harbor. I think it is two separate issues - buying the Dutch Harbor Boat Yard and other possibilities," he said.

After further discussion the council agreed to schedule a 3:30 p.m. meeting on Friday, May 30, to further discuss the town's position on Dutch Harbor Boat Yard.

After the meeting was over Barbara Paterson was asked if she would name the financial institution that was funding the marina. She said, "Absolutely not. I'm not telling you anything."

On Wednesday morning, Joseph P. Ferrucci of Providence, the Special Master appointed by the court to manage the sale of Dutch Harbor Boat Yard, was called. He said the decision for the bids was still scheduled for June 4. They were not aware of any financing that would stop the bid process.

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