Saturday, July 2, 2022

Bald Head Island board, told four years ago to purchase ferry system, asks for help

Bald Head Island's reverse osmosis system exceeded state-permitted arsenic levels in December 2018, January, and April. (Port City Daily photo/Mark Darrough)
The Bald Head Island Transportation Authority has asked state leaders for guidance in curing an impasse. (Port City Daily/Mark Darrough)

BALD HEAD ISLAND — The appointed board tasked with purchasing the Bald Head Island ferry system, after years of drama and now in fear of the Mitchell estate offloading its property to another buyer, has asked state leaders to help cure an impasse.

Since 2017, the quest to acquire the ferry infrastructure in a private-to-public sale has been stymied by opposition from stakeholders on the Village of Bald Head Island — a high-dollar haven known for its golf-carts-only vehicle policy and intense preservation of its acreage. 

The Bald Head Island Transportation Authority, hoping to move out of limbo, is now requesting help from state and local power bases. A letter approved Monday during a special meeting says it is critical for state regulators to consider their purchase proposal in December.  

Bald Head Island Mayor Andy Sayre, along with other authority members with island ties, previously lodged criticisms against the terms by which the authority has proposed to purchase the ferry system. The village ultimately signaled it wanted the ferry system for itself, and in November voters approved a bond referendum of up to $54 million, through which the village could compete with the authority to purchase the ferry system. 

But the seller does not appear keen on making a deal with the village itself, and the authority worries that bogging down the timeline further would blow up four years of progress.  

The authority, created through state law in 2017, has yet to fulfill its mission of acquiring the ferry system from the estate of the Mitchell family. Oil tycoon George Mitchell, who died in 2013, had an estimated net worth of $2 billion according to Forbes, which called him the “father of natural gas shale drilling.”

The authority’s revenue bond application has idled on the desks of state regulators at the Local Government Commission (LGC). Chaired by state treasurer Dale Folwell, LGC has questioned the merits of the deal in place. 

State auditor Beth Wood also slowed the process by admonishing the two commissioned appraisals that informed the proposed purchase price of $47.75 million. She has argued against considering the bond issue at the December meeting of the LGC. 

If the sale is not approved, the seller will move on to other prospective clients in the “private equity markets,” according to a resolution the authority passed at the special meeting Monday morning. 

“We believe there is a very real risk that the System will be sold, either as a whole or in parts, to one or more private equity firms or other for-profit enterprises which will have few constraints on their ability to raise rates on the barge and parking components of the System and will have little incentive to keep rates affordable,” according to a draft version of the authority letter, directed to politicians close-to-home and in Raleigh with power to appoint board members. 

Folwell previously said the authority’s bond application, and the newer proposal from the village, would be discussed during the December LGC meeting. Wood wrote to Folwell on Nov. 15 to insist he remove the items from the agenda, according to the Wilmington Business Journal

The assets in question include a wealth of maritime infrastructure, including the Southport and Bald Head marina terminals, 36 acres dedicated to parking, two aluminum monohulls, two aluminum catamarans, one tug boat, one deck barge, and the fleet of trams that shepherd island arrivals to their rentals. 

Read more from Port City Daily about the Bald Head Island ferry sale: 

Mitchell family begins Bald Head ferry sale process on open market, authority still preferred buyer

‘Playing out the clock’: Bald Head village formally initiates bond process to purchase ferry system

Savior or sabotage? Village faces pressure from Brunswick, Southport in Bald Head ferry sale

After objecting to state acquisition, Bald Head Village Council wants ferry for itself

Transparency concerns cause at least three-month delay on sale of Bald Head Island ferry system

Deep Dive: State treasurer asks Bald Head Limited to donate $47 million ferry system, company denies request

Trouble in paradise: Bald Head Island Council objects to private-to-public ferry sale

After Hurricane Florence, Bald Head Island's mayor initiated a decision that spurred controversy among several island residents. (Port City Daily photo/Mark Darrough)
(Port City Daily/Mark Darrough)

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