Port of Kingston and Kitsap Transit agree to fast ferry lease terms

KINGSTON — Commissioners for the Port of Kingston and the Kitsap Transit board of commissioners have agreed to the conditions for a lease agreement allowing Kitsap Transit’s use of port facilities for their passenger-only ferry service to Seattle.

The lease started on April 18 and won’t expire for 50 years. As part of the agreement, Kitsap Transit will pay $1.3 million up front in order to fund necessary improvements to the covered gangway, pier, ramp and the barge where the ferry will dock. $287,000 of these funds will be used to refurbish the gangway; $610,000 will be used to restore the barge and an additional $300,000 will go toward running new fuel and sewer lines out to where the ferry will be moored.

The lease agreement stipulates that improvements to the barge, gangway, pier, ramp and passenger waiting area shall be completed no later than August 30, 2018. The agreement also states that the remaining improvements will be completed no later than December 31, 2018.

According to Port of Kingston Executive Director Jim Pivarnik, the $1.3 million will also serve as Kitsap Transit’s rent check for the first 35 years of their lease. Initially rent will begin at $1,800 per month, with Consumer Price Index increases expected for each subsequent year. Renegotiation of the lease’s terms will be possible after 35 years. Should Kitsap Transit discontinue ferry service in the next 35 years, the port will not be responsible for paying back any of the initial $1.3 million and will retain ownership of all the improvements as well.

The entire audience at the meeting consisted of two community members. Jon Sole and Ron Karzmar both expressed their trepidation about the lease agreement.

Karzmar explained his concern that in its current state, the agreement appeared to offer Kitsap Transit exclusive rights to the port’s property, preventing the community and visitors from accessing the port’s barge.

“I followed this all along, since January and I was told that the exclusivity is a major problem … that the exclusivity would be reasonably withheld, that has all changed now,” Karzmar said. “I am asking just a couple days to help work out a deal where you guys shine and the public’s going to be happy and we can get Kitsap Transit to maybe change and bend the rules and not [get] 50 years of exclusive use of that barge.”

Commissioner Laura Gronnvoll addressed Karzmar’s request by noting that exclusivity had already been the topic of numerous previous negotiations.

“We actually had many negotiations,” Gronnvoll said. “Mary [McClure] and I were very unified in what we said, that we did not want it to be exclusive. Preferential was what we went with, we thought that would give us the opportunity and the ability to bring in other boats.”

As per the lease agreement, the only “exclusive use area” is a ticket booth located near the Washington State Ferries’ Kingston terminal. “Preferential use areas” include the covered transfer span connecting the Kingston Public Pier to the barge and the barge itself. According to the lease agreement: “The Lessee shall have the exclusive use of the Preferential Use Areas subject only to the occasional use of Lessor provided that the Lessor’s occasional use may not interfere with the use of the Lessee.”

Pivarnik noted that he wasn’t aware of any recent use of the barge by the public, excepting a recent lengthy stay by the Clipper Express which nearly resulted in the port’s seizure and auction of the vessel. The barge was also the home for the Kingston Express which was used as a backup ferry for the port’s SoundRunner ferry service which has been defunct since 2012.

When Karzmar requested the port commissioners hold off on making any decision until after the community has had more time to review the lease agreement, Port Commissioner Mary McClure, weighed his proposal.

In her assessment, McClure posed the possibility of Kingston having to wait another year for the ferry service, due to a compromised construction timeline resulting from the delay.

“I personally have to give another year a heavier weight than whether or not people [have] reached a comfort level with this,” McClure said. “That’s how I read the fact that there aren’t 30 people here screaming about this.”

In airing his opposition to the lease agreement, Sole said the lease’s lack of benefit to the citizens of Kingston made it appear as though it had been drafted in its entirety by Kitsap Transit’s Executive Director John Clauson.

“I think John Clauson must’ve written this agreement, and then in addition to that, the term of it is 50 years. A lot can happen in 50 years and personally I don’t have a lot of confidence that [the passenger only ferry service] is going to be in business for 50 years. When they fold up, then what happens?”

“The agreement is six months in the making and five commissioners, we’ve had seven public meetings where we’ve talked about this. Commissioners all along the way have had copies of this. I want to preface that it wasn’t a backroom deal.” Pivarnik said, rebutting assertions from the two-man audience that a sufficient period of public notice hadn’t preceded the decision for the lease agreement. In addressing Sole’s concern, Pivarnik explained that the port would retain ownership of the barge and other areas being used by Kitsap Transit, in the event that the group ceased ferry service in the area.

“I feel kind of hopeless, but I feel sorry that we’ve gotten to this point,” Karzmar said shortly before he and Sole excused themselves from the meeting. “Theres’ always a bright star in there, all those people behind us aren’t going to know that you guys passed this years and years from now, so you guys don’t have to stand and face them.”

After the pair left, the commission voted unanimously to approve the contract. Immediately after the vote, Commissioner Steve Heacock offered a few words about the agreement and Karzmar’s opposition.

“I understand Ron’s frustration with this,” Heacock said. “I really respect his comments, absolutely, but I think we’re in a spot where we really need to look at what the public has asked us to do. That is clear that the voting public wanted the passenger-only ferry. I think it’s a fair contract and I also think that there’s enough room in relation to this exclusivity that both assures the port that we can use our facility … and also that Kitsap Transit has [the] assurance that we’re not going to do something else in relation to other companies.”

—Nick Twietmeyer is a reporter with Kitsap News Group. Nick can be reached at ntwietmeyer@soundpublishing.com