Anacortes' ferry terminal: case study for how NOT to do a public-private partnership

Such partnerships are all the rage in times of lean budgets, but they can run into roadblocks, as this project illustrates. For one thing, the state is a partner with no money.

It could be awhile before the Anacortes ferry terminal gets new life.

It could be awhile before the Anacortes ferry terminal gets new life. C.B. Hall

The Washington State Ferries (WSF) terminal in Anacortes leads a life of quiet uncertainty. Since its construction in 1959, the unassuming, low-slung building alongside the dock has fulfilled its task of moving millions to and from the San Juan Islands and Vancouver Island effectively. But the structure is aging, and plans to replace it have bubbled up from time to time.

The most recent scheme depends on a public-private partnership (PPP) — and appears to be going nowhere.

“Dead in the water,” says Jeff Doyle, director of PPPs at the Washington State Department of Transportation (WSDOT). “We’re finding [that private developers] seem interested, [but] the state doesn’t have any cash to contribute to the construction.” For the prospective private investors, the construction costs are “just too heavy of a lift.”

In addition to the lack of state funds, he cites two other factors working against the Anacortes PPP.

“It’s not a good time for development, commercial or retail. And our [ferry] terminals are by and large not in highly populated areas, to help carry all those construction costs” through the promise of return on adjacent, private commercial investment.

The case serves as an example of why public-private partnerships often have trouble getting off the ground.

In the Anacortes case, WSDOT recently sought letters of interest from prospective developers. By last winter's submission deadline, three respondents had demonstrated to the state's satisfaction that they'd be equal to the project's challenge, but the state has not issued a request for actual proposals in view of “prevailing market conditions,” Doyle says.

A 2009 “project pre-design study” for the Anacortes terminal building and its site found the preferred development alternative to be a 17,000-square-foot building costing $23 million. The accounting, whose bottom line is in fact $38 million, also includes $15 million for “construction documents” — which, according to Tim Smith, WSDOT's director of terminal engineering, refers to all the planning documents that past proposals for the terminal's improvement or replacement have generated. Of course, at least some of those documents — architect's designs, for example — are completely useless at this juncture.

Although it did set up a fund to finance at least one new 144-car ferry, this year’s legislative session appropriated nothing to prime the Anacortes project's pump. Crews at the terminal recently completed rehabilitative work on the facility's boarding walkway, and roof repair on the terminal awaits. But beyond that, it's going to be the same old terminal for some time.

The 2009 study carried a big price tag for the 17,000-square-foot replacement building, which would more than triple the current structure's size. The document contains at least a couple of dubious statements that leave one wondering about the plan's dimensions. It states that “in the off-season about 200 passengers currently access the terminal building. Thus the current number of passengers waiting at the terminal can range from 200 in the off-season to upward of 700 in the summer months.”

I have used the terminal frequently year-round and have witnessed far smaller numbers in and around the building. The study also claims that “long lines are a common occurrence throughout the year” at the women’s restroom, a phenomenon I likewise have never witnessed. Smith says that the statements are based on the facility's “operational history.”

Why do public-private partnerships seem to run into frequent problems?

One reason could be that they start off with over-dimensioned plans and price tags that scare off the businesspeople once they've done their arithmetic. WSDOT's Doyle responds that in a place like Anacortes, “I don't know if that price tag is inflated. Projects of that magnitude in towns of that size — it's very difficult to expect the local retail community to contribute to a project of that magnitude.”

He remains convinced that PPPs have a future, even if the first P in the partnership didn’t ride to the rescue with any green stuff this spring in Olympia. “There's plenty to be done in this state. We still keep kicking over stones, trying to find some spare change.”


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Comments:

Posted Mon, Jun 27, 5:06 p.m. Inappropriate

The author writes: "PPPs seem all the rage, and have yet to suffer the fate of urban renewal, fallout shelters, the MX missile, and many another public initiatives now relegated to history."

While I appreicate the point that the author is attempting to make, urban renewal is alive and well. Here in the Portland region, for example, urban renewal districts blanket large portions of the city, including most of the downtown, many east side areas near MAX, and the centers of most of the region's suburbs. California likewise has many many urban renewal districts, although their future is under debate as endng these districts may enable state lawmakers down there to balance their budget.

Posted Mon, Jun 27, 5:42 p.m. Inappropriate

The author fails to explain what uses in the ferry terminal would occupy space and perhaps even draw customers to the terminal beyond the ferry passengers. It's easy to imagine a Starbucks or a Subway taking some space and doing enough business to help pay off the bonds but I think a 17,000 sq. ft. building would have to have at least 50% rentable to make any kind of investment sense. The designers and the contractor, of course, get paid leaving the taxpayers to make sure the bonds are serviced and the building is maintained (and trying to rent empty space). It's easy to see why this hasn't generated much enthusiasm.

kieth

Posted Mon, Jun 27, 9:28 p.m. Inappropriate

An enhanced ferry terminal is silly and wasteful. If another bathroom is needed, then build it. What DOES make sense is to put WSF administrative offices aboard every ferry. Make the staff see what is happening daily on board the boats. There is vast amounts of space available for glassed in cubicles.

Also, could we please, please, please have some cash machines at every terminal and a small magazine/book/newspaper vendor who maybe sells milk, bread, and other household staples? THAT would be useful at the terminals.

For gods sake can't we get some brains at work in our State government levels?

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