If you’ve been following Portland waterfront politics for the past few years, you’re aware of the ongoing controversies surrounding two major pieces of public infrastructure: the old Maine State Pier and the new Ocean Gateway Terminal. Two studies released in July raise serious questions about how city officials went about justifying their development plans for the city-owned piers.
The first study raised uncomfortable questions about the Maine State Pier debacle, in which city officials attempted to negotiate with private developers to repair the 87-year old pier and build a $100 million hotel-and-office complex on top of it. The public was repeatedly led to believe that the pier was in dire need of repairs, the costs of which were estimated at as high as $26 million.
Some became suspicious that city officials were trying to give a sweetheart deal to the politically-connected firm that came up with the idea: Ocean Properties of Portsmouth, which was represented by ex-Portland mayor Peter O’Donnell, Bob Baldacci (the governor’s brother), and the Baldaccis’ cousin, former Sen. George Mitchell. Conspiracy theorists have had plenty to work with: when a competing firm unexpectedly responded to the official call for proposals, the city council let Ocean Properties redesign their plans not once but twice; Ocean Properties employees gave generously to the campaigns of the current mayor and to two successful city council challengers, including one who’d been their paid community organizer.
Here’s the kicker: the pier never needed serious repairs at all.
In July, city officials announced that they’d finally paid for divers to inspect the inner bowels of the pier and everything was more or less OK. ”…once you get underneath, it’s in remarkably good condition, and for the most part quite capable for the loads it is designed for,” engineer Wayne Duffett told the Portland Press Herald in a July 11 story.
So, one asks, why didn’t the city send divers under the pier before spending two years negotiating its repair with private developers? City spokesperson Nicole Clegg said she would have to refer the question to senior members of the planning staff who, at press time, were on vacation. Watch this space for future details.
Cruise Control
Meanwhile, the city announced that last summer it had commissioned what is believed to be its first proper, survey-based study of cruise ship passenger spending, years after commissioning Ocean Gateway, a $21 million cruise ship terminal. The results show that the economic benefits are less than the city had previously assumed, dramatically so when compared to the benefits claimed by the city’s former transportation director, Jeff Monroe, who championed the project.
Last year, readers of this column learned that the numbers city officials and cruise ship advocates had been bandying around for years-that each passenger spends $103 a day in port-were based on erroneous assumptions. Those touted by Mr. Monroe since 2002-$117 per passenger per day and a total of $200 in overall benefits-appeared suspect even then, as the cruise industry’s own consultant predicted that Portland’s passenger spending numbers would likely resemble those of Saint John ($56 a day) or Halifax ($66).
Now we have a concrete answer, thanks to Todd Gabe and James McConnon of the University of Maine School of Economics, who surveyed passengers at the gangway last summer. Their conclusions: the average Portland passenger spends $80.52 ashore, 22 percent less than previously assumed. Almost $7 of that is spent in Freeport (where many are bussed) and an unknown amount in the Kennebunks and the White Mountains of New Hampshire (two other popular bus tours.)
(The study assumed all passengers went ashore, Mr. Gabe said, but also that all of the ship’s crew stayed on the ship. “We suspect those two factors cancel each other out,” he explains.)
This raises questions about Jeff Monroe’s $200 per passenger per day estimates, which were contained in a 2002 city study used to justify the construction of Ocean Gateway. The figures clearly do not stand up to scrutiny.
This study purported to represent purchases made in southern Maine by the cruise lines, their passengers and crew during a Portland port call. In reality, it more accurately represents purchases made worldwide as a result of a Portland port call, with nearly half of the benefits accruing not to Mainers, but to entities in Washington, D.C., Florida, and Panama.
Passenger spending, while overblown, is actually the most forgivable error in the 2002 report. Monroe and co-author Amy Powers (who now heads Cruise Maine) assumed each passenger spent $117 a day in port, 31 percent more than shown by the UMaine surveys. It also failed to correct for the fact that not every passenger leaves the ship in a given port, and compounded the error by assuming that every single crew member was free to leave the ship and spend an average of over $38 during a typical 12-hour port call. Taken together, these appear to overstate passenger and crew spending by 40 percent when compared with Gabe’s data and methodology.
More troubling is the means by which Monroe calculated “local” purchases by the cruise ships themselves, most of which turn out to have been transactions between the cruise lines and out-of-state entities. Most obvious is the inclusion of fees paid directly to the U.S. Customs Service, the Department of Agriculture and other federal agencies.
More serious is the inclusion of revenue for shore tours purchased directly from the cruise lines, which charge a typical markup of 60-70 percent; another 10-20 percent cut goes to Destination Florida/New England, the Miami-based company which holds an effective monopoly over the organization of shore tours in Maine.
Together, Monroe reckoned tours and federal fees contributed $45 per passenger per day to southern Maine’s economy. In reality, the figure was likely closer to $11.
Taken together, the errors appear to amount to approximately $86 per passenger, nearly half of Monroe’s $200 estimate, raising the possibility that the city built Ocean Gateway on the assumption that revenues to the region would be nearly twice what they actually are.
Reached by telephone, Monroe initially defended the study as essentially accurate, but after being questioned about specific items conceded that it may have been imperfect. “The ports department didn’t have the funds to hire a consultant so we did they best we could to do an estimate of what the economic impact of building Ocean Gateway would be,” he said. “We didn’t have the capacity to boil it down to fine-print details, but we were trying to come up with some aggregate numbers and to make a calculated guess.”
Asked why the city hadn’t ordered a survey-based passenger study years ago, city spokesperson Clegg said “a lot of internal changes have been made [and] the responsibilities for this were shifted to other people.” (Monroe’s position was eliminated in April 2008.)
-Colin Woodard is an award-winning journalist and the author of three books including The Lobster Coast. www.colinwoodard.com