Ferry operators cruise to Staten Island

via Crain’s

WheelTwo major development projects on Staten Island—the New York Wheel and Empire Outlets—have the city’s ferry operators drawing up plans to transport millions of visitors a year to the borough that has been served for a half-century exclusively by one ferry.

If the developers of those megaprojects are right, and some 6 million annual visitors begin flocking to sleepy Staten Island in two years—when the attractions are expected to be completed—every major ferry company in the city, including New York Water Taxi, BillyBey Ferry Co., Statue Cruises and Seastreak, will be dropping off riders at a dock just a short distance from the St. George Terminal, where the Staten Island Ferry lands.

All those businesses are currently in negotiations with the New York Wheel and BFC Partners, which is developing the outlet center, evaluating whether they need to purchase more boats and how much they should charge to transport tourists from points in midtown Manhattan, New Jersey, Brooklyn and Queens directly to the North Shore of Staten Island. There are no regulatory impediments standing in the way of expanded service. The city is seeking a developer to build and operate a new ferry landing.

“There will be millions of passengers who will want to get to a part of Staten Island that is by far most accessible by boat,” said Paul Goodman, chief executive of BillyBey, the company that owns some NY Waterway ferries. “If we are talking about large crowds, we would have to purchase more vessels” before the wheel opens in 2016, he added.

Others are making commitments now. New York Water Taxi just signed a letter of intent with the developers to add a St. George stop to its existing hop-on, hop-off tour package, which makes stops in Brooklyn, lower Manhattan and midtown and costs $30.

“That gives [the attractions] access to our customers,” said Brian McCabe, chief executive of New York Water Taxi. “As demand grows, you might see direct [routes]” from different parts of the city to Staten Island.

Established competitor

Michael Burke, chief operating officer of Statue Cruises, which has the exclusive contract to ferry visitors to Liberty and Ellis islands, would like to add a Staten Island stop, too, but conceded that security concerns would likely scuttle such a plan. Instead, his company is more apt to run a separate boat to Staten Island.

The ferry operators’ main competition would not be each other but the Staten Island Ferry, which transports 20 million people a year to the borough on nine boats that operate seven days a week—and, most important, offers a free ride.

“The big unknown is how many people will use the Staten Island Ferry,” said Mr. Burke. “I think a majority will go on the free boat.”

To keep the cost competitive with the free option, Mr. Goodman of BillyBey said that subsidies either from the developers or from the city may be necessary. That could allow the boats to also cater to Staten Island commuters willing to pay a little more for direct service to midtown, for example. The city has already indicated that it will not subsidize new ferry service to St. George.

Another model could be one based on the Red Hook Ikea route offered by New York Water Taxi. The ride costs $10 round-trip, but Ikea shoppers who spend that amount or more in the store get a $5 discount on their purchase by showing their ferry ticket.

Travis Noyes, chief marketing officer of the wheel and senior vice president of Empire Outlets, has been charged with coordinating the marketing efforts of both projects, as well as with assessing the demand for each attraction. The Staten Island Ferry, he said, already transports more than 2 million tourists annually.

According to studies commissioned by the developers, an additional 1 million people will use the city-run ferry, while another million will pay a premium to board boats from points in the city other than lower Manhattan to travel directly to Staten Island.

The extra passenger volume should not put undue pressure on the Staten Island Ferry, he said, because most of the passengers going to the attractions would be traveling there during off-peak hours, not prime commuting times.

Staten Island could become a major tourist destination by 2016, if the developers’ vision is realized. Combined, the two projects represent a $580 million investment. The New York Wheel, a 630-foot structure, will be the largest such attraction in the world, featuring glass-enclosed observation capsules that hold up to 40 people for a 38-minute ride.

The wheel will be able to accommodate as many as 1,400 passengers at a time, while Empire Outlets will include more than 100 designer stores, restaurants, a banquet facility and a 200-room hotel.

At night, the wheel will put on a show using $8 million worth of LED lighting that will act as a beacon, drawing people to St. George and the waters around it.

Even more incentives to visit

Mr. Noyes, who was previously a New York Water Taxi executive, said, “All of the harbor boat tours will want to come out at night to see the light show, and it’s my job to get those boats to drop people off [on Staten Island].”

To that end, he is working with other attractions in St. George to create more incentives to visit. The minor-league Staten Island Yankees, for example, are developing new programming for their ballpark, including concerts.

To keep travelers on the island longer, Mr. Noyes is collaborating with a company that will transport their luggage to the airports on the day of their departure.

“We want people to check in their luggage at Empire Outlets and enjoy more time here,” he said. The bag operator would be approved by the Transportation Security Administration, similar to a service that’s offered at Fashion Outlets of Chicago, which checks bags for flights leaving from O’Hare International Airport and even prints boarding passes.

Correction: Billybey Ferry Co. contracts with NY Waterway to operate the ferries it owns. This relationship was misstated in a previous version of this article, originally published online March 2, 2014.

Read More at Crain’s


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