Horluck ferries find their money fix
June 12, 2008 · Updated 9:59 AM
"Horluck Transportation owner Hilton Smith said he's found a way to finance the company's passenger ferries without tapping Kitsap Transit funds.Seattle-based Waterways Marine Group-which is also owned by Smith-and Horluck Transportation are expected to combine their fiscal resources over the next few weeks.It's basically a stock swap, said Smith, who co-owns 85 percent of Waterways with his wife. Founded in 1992, Waterways operates five charter yachts, shoreside-event space and a catering outfit at its Lake Union headquarters.Smith's announcement came almost two weeks after Kitsap Transit refused to give the private company capital for new boats and boat repairs, as well as a heftier passenger-fee reimbursement plan.It's been a daily game since Jan. 1, Smith said of the merger's timing. We've been trying to figure out what's going to happen with the business. We were looking at the problems and not getting anywhere with lenders or Kitsap Transit.Meanwhile, Horluck ferries such as the Mary L and the Carlisle suffered engine trouble while commuters scrambled for ways to cross Sinclair Inlet between Port Orchard and Bremerton. Now those inconveniences should go away, Smith said.As a division of Waterways, Smith said Horluck can access a larger capital base than before, which could exceed $6 million this year.Horluck represents just 10 to 12 percent of the entire operation, Smith said. Economies of scale of the combined operations will increase efficiencies.For regular foot-ferry commuters, Smith said the changes won't mean new fares, but will earmark capital for much-needed boat and repair services.The Mary L is expected to running by Feb. 10 after having two engines installed. Horluck mechanics are expected to give the Carlisle a complete engine overhaul, as well. The Spirit of '76 and the Eagle are the only Horluck vessels operating out of the firm's terminal in Port Orchard.Smith said Horluck can further stretch dollars once a 50-foot Navy launch is converted into a 70-passenger water taxi for use during non-commuter hours. The water taxi will cost $25 an hour to operate, Smith said, which is much lower than the $45 an hour to operate the Eagle during non-commute hours (8:30 a.m. to 3:30 p.m.). The $150,000 launch renovation will be a relative cinch, Smith said, once Horluck and Waterways operate jointly.Smith said he hopes Kitsap Transit's recent proposal-now before the Legislature in Olympia-to operate a private-public ferry service will succeed. If it does, he'd like to be the successful bidder. Horluck's ownership of its existing terminal facilities in Port Orchard and its own repair, moorage and fueling facilities on Sinclair Inlet could position the company well for such a venture, he said in a prepared statement."