Ferry Deal Raises Legal Issue

Monday, February 06, 2006
Rochester, not the Toronto Porth Authority, may be responsible for outstanding debts under a 14-year lease agreement between the Port Authority and the Rochester Ferry Co., the entity established to own and operate the ferry. According to the Rochester Democrat & Chronicle, the 2005 lease agreement, which set the costs and terms for the ferry service to use a recently built terminal in Toronto, says nothing about obligations on Rochester's part. That fact has created a somewhat ambiguous legal question for current city officials, who are trying to determine whether the city is responsible for lease payments once the ferry company disappears. Former Rochester officials involved in the contract negotiations contended that the city wouldn't be responsible should the Rochester Ferry Co., or RFC, be dissolved, records show. As the minutes indicate, Port Authority officials wanted the city to be a guarantor under the lease, but the Rochester Ferry Co. refused. In turn, the city has no financial risk under the deal, which required the ferry company to pay $218,000 a year to the Port Authority for docking and terminal use. That could add up to almost $3 million for city taxpayers. The contract also stipulates charges for the number of passengers and cars using the terminal but, without the ferry service, those costs would cease. The Rochester Ferry Co. will continue to exist until the ferry is sold, after which it likely will be dissolved. And then city officials will have to determine whether the city is responsible for the millions that could be owed if the Port Authority wants payment for the remaining 13 years on the lease.

(Source: Rochester Democrat & Chronicle)

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