2019-02-09 / Top News

City Works Quickly To Purchase the Coal Dock

By Stephanie Fortino


The city seeks to acquire the Coal Dock and offer it for lease to Mackinac Island Freight Company. The freight company, in turn, would operate the dock as a public facility for the next 10 years. The dock, seen here February 1, has gas tanks (left) and the hardware store (right). The city seeks to acquire the Coal Dock and offer it for lease to Mackinac Island Freight Company. The freight company, in turn, would operate the dock as a public facility for the next 10 years. The dock, seen here February 1, has gas tanks (left) and the hardware store (right). New details on the City of Mackinac Island’s plans to acquire the Coal Dock were unveiled during a hearing Wednesday, January 16. The meeting was the first opportunity for the public to ask elected officials questions about the transaction, which is moving quickly after months of city council meetings held behind closed doors. The biggest hurdle to finalizing the plan, according to city attorney Tom Evashevski, is how quickly the city can raise $3.95 million in a bond sale. If all goes according to plan, the deal should close this March.

In December, the city council signed a purchase agreement with Mackinac Island Freight Company, LLC to purchase a majority of the Coal Dock for $2.85 million. Mackinac Island Freight Company, a new company whose principal is Veronica Dobrowolski, is is negotiating to purchase Mackinac Island Ferry Capital’s interest in the Coal Dock, Mr. Evashevski said. Mackinac Island Ferry Capital took control of Arnold Transit Company in 2014, sold off the passenger assets to Star Line in 2016, and has continued operating Arnold Freight.


The Mackinac Island City Council is trying to purchase the Coal Dock, pictured Thursday, January 17. The council wants to maintain the dock as a freight terminal, ensuring that access to the fuel tanks there are secured for the public. The Mackinac Island City Council is trying to purchase the Coal Dock, pictured Thursday, January 17. The council wants to maintain the dock as a freight terminal, ensuring that access to the fuel tanks there are secured for the public. The city plans to sell bonds for $3.95 million to finalize the Coal Dock deals, including $2.85 million to Mackinac Island Freight Company. The city is also seeking 30 feet of upland property along the head of the dock for riparian rights to alleviate multiple ownership claims, Mr. Evashevski said. Along the head of the dock is the city-owned property at the end of Astor Street, the Trader Nick’s building that is still owned by Mackinac Ferry Capital, the Seabiscuit building owned by Sandra and Debra Orr, and the Trading Post building owned by the Trayser family. The city will also need to purchase the filled bottomlands under the hardware store and gasoline tanks from the Michigan Department of Environmental Quality.

Debra and Sandra Orr have a claim on the Coal Dock and will be selling their portion to the city, as well, although the price for that portion has not been disclosed publicly.

The city council met in closed session following the regular city council meeting Wednesday, January 16, to discuss the purchase of the Orr portion, as well as the strategy for the ongoing litigation at the Coal Dock. The Orr sisters are considering selling their portion of the dock in installments, Mr. Evashevski said, which would lower the city bond obligations.

These parties have also been involved in litigation over the ownership of the Coal Dock, which is in the appellate court. Another advantage of the city purchasing the dock, Mayor Margaret Doud said, is that lawsuit will be settled, potentially saving the city money in legal fees.

Mr. Evashevski explained that the Coal Dock would be leased to Mackinac Island Freight Company for 10 years with a 10-year renewal option, although the lease has not been made publicly available. Under the proposed lease, Mackinac Island Freight Company, LLC would lease the Coal Dock for $75,000 annually for the first five years, then $100,000 each year for next five years, with cost adjusted according to the consumers price index. The company would not have an exclusive right to use the Coal Dock, as other companies could land there for a $300 landing fee.

The Island Hardware Store building would be leased to its current operator, KirkLipnitz, who would also continue selling gasoline to the public. The hardware store will be leased for $30,000 a year. The city will continue to honor the hardware store’s lease, which expires in a year, Mr. Evashevski said, then a new lease could be negotiated.

Businessman Ira Green inquired about the interest rate the city will have on its bonds. Mr. Evashevski noted the council doesn’t yet know what the interest rate will be, but the city is working with the Miller Canfield firm, which is estimating interest rates will be about 4.5%.

The city council believes purchasing the personal property rights of the Coal Dock outright is a better solution to solve the argument of who owns the dock, said council member Steve Moskwa. The city considered taking the dock by eminent domain, but a court would need to determine the price the city would have to pay. Since these options have been discussed behind closed doors, he said, the city council wants public input on their plan before it is finalized.

Star Line CEO Jerry Fetty asked why the city couldn’t buy the Coal Dock directly from Mackinac Island Ferry Capital, rather than going through the newly formed Mackinac Island Freight Company.

Mr. Evashevski said the city has tried in earnest to negotiate with Mackinac Ferry Capital’s principals, the Rippe family of Cincinnati, Ohio during mediation. Those negotiations were unsuccessful, Mr. Evashevski said, but a new plan presented by Mackinac Island Freight Company renewed the Coal Dock negotiations.

“Mackinac Island Freight Company negotiated its own deal and came to us,” he said. “That kind of started the process.”

Mr. Fetty also inquired whether the city council intended to restrict the freight operations at Star Line and Shepler’s. The city council will not restrict freight operations at Star Line and Shepler’s, Mr. Evashevski said, but the deal simply opens the Coal Dock up to any freight hauler that wishes to use it. Mackinac Island Freight Company will manage the Coal Dock for the city, through the lease agreement, but the city also won’t force freight haulers to use the dock.

When asked why the city wants to purchase the Coal Dock, Mayor Margaret Doud responded, “Number one, we’re an Island. We think it’s time to have a dock.”

City councilmember Kay Hoppenrath added, “We want to be sure we can get on and off the Island.”

Purchasing the Coal Dock will give the city options, said council member Anneke Myers, especially as there is turnover in the longtime ferry and freight businesses that have served the Island for decades, most notably the sale and restructuring of Arnold Transit Company in 2016. Having the ownership of the dock “up in the air,” she said, is not ideal for the city.

“We want to preserve it as a freight terminal,” said Mrs. Myers.

But beyond a freight terminal, the Coal Dock could also be used as a passenger dock in winter if needed, said Mr. Moskwa.

The Coal Dock is also the only location where gasoline is available for purchase on the Island, Mr. Evashevski said, and is also used as a public turnaround for snowmobiles, which, he opined, should also be preserved.

And the Coal Dock features many historic buildings, Mayor Doud added, which the city should try to preserve.

Audience member Christine Rollins inquired whether slips at the end of the Coal Dock will be available for private boaters. Mr. Evashevski said Mackinac Island Freight Company will be able to rent out mooring slips at the end of the Coal Dock and keep that income. A space will be preserved, however, for boats to fuel up at the dock.

Mr. Green was in favor of the plan, noting it was a “great effort and important” for the city council to secure a dock. He also stressed the importance of having a competitive freight hauling industry on the Island, and said he hoped Mackinac Island Freight Company would not price out other freight companies from using the Coal Dock in the future.

The city council also wants to ensure the freight company charges a reasonable docking fee, Mrs. Myers said. Mackinac Island Freight Company is proposing a capped price of $300 per landing for other freight haulers to use the Coal Dock, which is included in the proposed lease.

The city council has stressed the need for Mackinac Island Freight Company to work with other freight haulers, added Mr. Moskwa. Mackinac Island Freight Company will have priority at the Coal Dock, said Mrs. Myers, and can limit whether the other freight haulers can bring motorized vehicles in at the Coal Dock. Mackinac Island Freight Company will be responsible for maintaining all permits and facility plans with the United State Coast Guard. If the proper certifications are not maintained, the company will forfeit its lease, said city council member Andrew McGreevy.

The lease between the city and Mackinac Island Freight Company will be part of the sale, Mr. Evashevski said. As the lease is currently proposed, said city council member Dennis Bradley, the plan keeps the status quo at the Coal Dock for at least the next 10 years.

Audience member Lorna Straus asked about whether the Coal Dock has been independently inspected before the city agreed to purchase it. An independent inspection was done a few years ago as part of the lawsuit over ownership there. Mr. Bradley, Mr. McGreevy, city engineer Dennis Dombroski, and Ed McGreevy have also toured the dock and were shown some wood pilings that will need work soon.

Audience member John Huibregtse asked about the cost the city expects to spend for maintenance at the dock, and where those funds will be acquired. Mr. Evashevski said the maintenance costs are difficult to estimate, noting the city will be able to use the lease revenue to make repairs and upgrades. The city will be responsible for the structural maintenance of the Coal Dock, he said, and will have to budget for its maintenance.

Mrs. Myers also noted that the city is hoping to form a transportation authority, which could apply for federal and state grants or funding to offset costs. Michigan Senator Wayne Schmidt is also working with the city to identify funding, she added.

While the city will own the Coal Dock, it will remain on the city’s tax rolls, Mr. Moskwa added.

The city hopes to have the deal solidified by March of this year. The primary variable in closing the deal depends on when the city can sell bonds, Mr. Evashevski said. The bond does not require a public vote unless 10% of the electorate petitions for a vote. The city also plans to increase its millage by one mill to help make its bond payments, which does not have to be approved by a vote since the city is below the maximum tax millage allowable.

“We do have a very low millage,” Mayor Doud said.

Taxes are determined by millage and property value.

Mr. Fetty also raised concerns about possible contamination around the fuel tanks. Mr. Evashevski said a monitoring well has been installed at the dock and the city is working with Mackinac Environmental of St. Ignace to ensure there is no pollution there. If contamination is discovered, Mr. Evashevski said the city wants to ensure it will not be held responsible for any environmental cleanup, if needed.

Mayor Doud said, “This is a big endeavor. . . We’re pushing ahead and hope everybody supports us.”

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I am missing the point of the

I am missing the point of the Coal Dock remaining on the city's tax rolls? Does the City pay tax to itself? Is the City Town Hall on the city's tax rolls and pay tax? Is this a means to establish ownership, because it makes no sense for any other reason.
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