This has prompted state, local, and quasigovernmental agencies like the Port Authority and New Jersey Transit to rush to find contingency plans to avoid a lapse in service. A closed-door meeting was held Tuesday involving local mayors and transportation officials. A source close to the negotiations said that the attendees included: Donald Liloia, president of NY Waterway; Port Authority Chairman Anthony Coscia; Gov. James McGreevey's Chief of Staff Jamie Fox; Hoboken Mayor David Roberts, Weehawken Mayor Richard Turner, and representatives from New Jersey Transit and other agencies.
Officials at the meeting aren't commenting on the record, but have said that Waterway approached them with their problems and asked for assistance.
Waterway spokesperson Pat Smith said last week that Waterway is proactively trying to solve its cash flow issues and that the Hoboken and Weehawken routes are not in immediate peril.
"We are in discussion with the Port Authority about different formulations," said Smith vaguely. He added that company is in much better shape than what is being reported. But information is beginning to leak that officials are considering several different contingency possibilities, including giving subsidies, shifting routes to other ferry companies, having the Port Authority take over the service, or creating a quasigovernmental ferry agency.
Waterway has seen a sharp decline in ridership in the past two years. In 2002, New York Waterway enjoyed a 92 percent market share, and without PATH service to lower Manhattan, over 64,000 daily commuters traveled from Hudson County to Manhattan terminals by ferry. Now that the PATH is running again, according to Waterway officials, only around 38,000 commuters are taking the trip.
Hoboken Mayor David Roberts said Friday that the ferry is an important part of Hoboken's identity and history. "Hoboken is a river city, so of course there is an emotional attachment to ferry service," said Roberts. "Moreover, thousands of commuters a day rely on New York Waterway service to get to and from work."
Another ferry operator
One option that is being considered is bringing in a smaller ferry company to take over some of Waterway's routes. Talks are underway between NJ Transit, the Port Authority, and other agencies to restructure and possibly downsize the ferry service so that a privately owned and operated company could come in if the situation worsens.
The two most likely candidates are New York Water Taxi and SeaStreak, which have a combined service around 6,000 customers daily. According to a story in the Bergen Record, Tom Fox, the president of New York Water Taxi, has talked to the Port Authority about possibly of taking over some of Waterway's routes.
There are those in the community who believe that a government-run, regionalized ferry service might be the best option. Ferry Friends, a group with over 4,000 supporters who are mostly commuters, has long complained that tickets are too expensive and that ferry service isn't nearly good enough.
Deborah Jack, a founder of Ferry Friends, said Thursday that bringing in a new operator will only lead to the same problems.
"We don't see this as a catastrophic problem but as an opportunity," said Jack. She added that her biggest concern is that there will be a "knee-jerk" reaction and the Port Authority will rush into a long-term contract with another private company, without dealing with the root problems.
"Ideally we would like to see the Port Authority take over from 12 to 18 months, so everyone can take a step back and take a deep breath," she said.
She added that way the decision makers can create a regionalized ferry service that will be solvent.
Subsidies are an issue
Ferries are the only form of mass transit in the tri-state region that does not currently receive a regular government subsidy to cover operating costs.
But some within the local government do not believe that subsides alone would keep Waterway running well. Waterway currently has an exclusive contract to operate in Hoboken and Weehawken, which is described by Waterway officials as their "core service." The Jersey City routes are less profitable. The first victim of Waterway's troubles is the route of Harborside in Jersey City to the World Financial Center, a move that takes effect Nov. 1. Now only 400 people a day use that route, compared with the 3,600 daily riders who took those boats before the PATH station reopened at the World Trade Center.
After 9/11, NY Waterway was the beneficiary of some $35 million of Federal Emergency Management Agency (FEMA) funds to enhance ferry and bus services from Hoboken since 2001. At its peak, the program was paying Waterway $2.6 million per month to run ferries from New Jersey to Manhattan, but the company is no longer taking operations subsidies. Additionally, NY Waterway has been the direct recipient of a number of FEMA-funded capital construction projects totaling over $10 million during the same period. Also, the Port Authority and governments have invested over $100 million in mostly federal dollars for ferry equipment and on ferry docks.
Waterway has received other benefits such as the exclusive opportunity to lease a new $53 million, 30,000-square-foot ferry terminal in Weehawken that is being built by NJ Transit using federal funds, slated to open in December of 2005.
New Jersey transportation officials have approved a 32-year lease with NY Waterway, giving the company exclusive rights to run boats from the facility. According to the agreement, the company will pay rent to NJ Transit as per the number of daily passengers who use the terminal. NJ Transit is guaranteed a minimum annual payment of $600,000 for use of the site.
Owner Arthur Imperatore has been hurt by an investigation by the United States attorney for the Southern District of Manhattan and the inspector general of the Port Authority into the company's use of about $27 million in federal funds and possible antitrust violations.