PORTLAND, Maine — The Portland City Council on Monday night approved a lease that will secure the Maine side of a new Nova Scotia ferry service for as long as seven years.
The deal is an initial two-year lease with tenant options for two subsequent two-year renewals and another one-year renewal afterward. If all of the tenant renewal options are exercised, the ferry service will operate out of the city’s Ocean Gateway Terminal through 2021.
The Portland lease for Nova Star Cruises was seen as one of the final steps necessary to clear the way for the re-establishment of a ferry service connecting Maine’s largest city with Yarmouth, Nova Scotia.
The deal approval also is the latest in a flurry of activity for the ferry service as it works to be ready to launch its first trip on May 15.
Over the past month, Nova Star secured a seven-year lease for the Nova Scotia side of the operation, saw its finished cruise ship leave a Singapore shipyard for its new North American home and received U.S. federal approval to begin selling tickets.
“Currently everything is on course for a 15th of May startup with great support for the city of Portland,” Nova Star head Mark Amundsen told the council Monday night. “We look forward to being a waterfront fixture for years to come.”
The Nova Star is a new 528-foot cruise ship that will have capacity for 1,250 passengers and 300 vehicles. It will feature a casino, three restaurants, a theater, spa and art gallery. The ship will depart at 8 p.m. daily from Portland. It will arrive in Yarmouth the following day at 7 a.m.
Return trips will leave Yarmouth at 9 a.m. and reach Portland at 5 p.m.
Under the terms of the Portland lease agreement, the cruise company will be required to pay the nearly $225,000 necessary for security upgrades to the Ocean Gateway Terminal for its new role as a U.S. Customs checkpoint — such as new fences, gates, lighting and a screening booth.
The lease breaks down fees based on how many passengers, vehicles, bicycles and others the ferry transports, in part, so the amount of annual revenue it generates for Portland will depend on how successful the service is.
“The biggest driver for the lease agreement is in the passenger fees,” Mitchell told the council Monday night. “We’re projecting anywhere from 50,000 people per year in the first year to upwards of 150,000 people per year in future years. We’re projecting $100,000 easily in the first year, with that number to grow significantly — as much as triple — in coming years.”
Nova Star has estimated that the municipal operators of its Canadian terminal will make $350,000 per year from that lease, for comparison.
According to the Portland lease breakdown, Nova Star will pay $350 per day for berthing during the first year of the lease and $1 per ship foot per day in the second year of the lease. The company in its first year will additionally pay $2.50 per passenger, 50 cents per bicycle, 75 cents per motorcycle, $3 per car and $20 per commercial truck transported by the ferry service.
Automobile fees will increase to $5 apiece and commercial truck fees will jump to $25 each in the second year of the lease. The deal — which considers the ferry’s operational season to be between May 1 and Oct. 31 each year — also includes an initial $10,000 lease deposit and $19,200 annually to rent the terminal’s so-called departure building to serve as Nova Star’s local headquarters and ticketing office.
The restoration of ferry service will come after five years without the seabound connection between Portland and Nova Scotia. The 2009 demise of the high-speed CAT ferry ended more than 50 years of Maine-Nova Scotia ferry service, starting with a Bar Harbor connection and going on to include about 35 years of routes to Portland as well.
Tickets for the Nova Star range from $79 to $139 one-way for adults, depending on the season, while children between the ages of 5 and 12 will see ticket prices from $39 to $54. Children younger than 5 will be able to travel free.