Sale of Bald Head Island ferry to private company after public deal ends

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SharpVue Capital, a Raleigh-based private equity and real estate firm, said it would buy the ferry for $56 million from Bald Head Island Limited. (Photo from Port City Daily/Mark Darrough)

BALD HEAD ISLAND – The years-long battle for the Bald Head Island ferry system appears to be coming to an end.

SharpVue Capital, a Raleigh-based private equity and real estate firm, said it would buy the ferry for $56 million from Bald Head Island Limited.

Ownership may change, but SharpVue CEO Lee Roberts said the service will remain the same.

“I think the day-to-day experience should be very similar and largely seamless for passengers and for the general public,” Roberts said. “It will always be the Bald Head Island ferry.”

The sale will include the ferry, tram, barge and parking operations, all of which are Mitchell family estate assets and controlled by Limited, which is also involved in the Project Indigo subdivision of Southport. The entire transaction, totaling $67.7 million, will include additional real estate assets, such as marinas and real estate owned by the Mitchell family.

The North Carolina Utilities Commission, which regulates the ferry and streetcar, must approve the transfer of those two assets. According to Roberts, the sale of the barge and the parking lots could be finalized in the coming months.

The deal comes after five years of efforts to transfer the ferry system to a public authority. The Bald Head Island Transportation Authority was to acquire the ferry infrastructure from Limited for $47 million, but the state’s Local Government Commission had to approve the arrangement. It was never on the committee’s agenda.

According to Limited’s CEO, Chad Paul, it’s time to close the field and move on.

“We’ve been working on this with the authorities and the state for a long time, but they’re running out of time,” Paul said.

While Paul’s original intentions were to sell to a public rather than a private entity, he said SharpVue would make a good steward for the ferry.

“It is now private property and publicly regulated. If our deal is approved, it will be privately owned and publicly regulated going forward,” Roberts said. “I don’t think the public should be worried on that front.”

Even though the company is private, the ferry and the tram will be regulated by the public utilities commission.

According to Roberts, the company plans to retain all current staff and management. Everyone will retain their current ranks, titles, tenures, benefits, and paid vacation days.

Nor will it change the operations of the ferry, which in 2021 made around 8,200 round trips and carried 373,560 passengers.

“They’re going to take the current rates, they’re going to take the current schedule, they’re going to take the current lease for the real estate,” Paul said.

SharpVue won’t raise fees immediately — at least not in 30 or 60 days, Paul confirmed, despite the private equity firm’s profit-seeking pursuit.

A round-trip adult ticket is $23 and parking is $12 per day. To raise rates, the company would need to get approval from the public utilities commission, the same way it has done for 35 years.

However, SharpVue has shared plans to simplify the ferry ticketing process by fall. Roberts wants to move to an online system where passengers make advance reservations and receive a unified ticket for ferry and parking.

Public vs. Private

For years, placing the ferry in a public trust with the Bald Head Island Transportation Authority was touted as the best solution, according to Paul. Now Limited is tired of waiting for the authority deal to be approved.

“If you’re going to have a private transaction buyer, that’s really the second-to-last option,” Paul said.

Paul said the option to sell to a private buyer has been on the table for some time due to the impasse. Limited threatened to sell the assets on the open market in a September 2021 letter to the former mayor of the village.

“It’s not news,” he said. “We alerted everyone a year ago that this is the path we are headed down because this is what was forced on us.”

Passed in 2017, North Carolina Senate Bill 391 created the power to purchase Limited’s ferry assets. The authority approved the purchase of the ferry for $47 million in December 2017 and requested a tax liability. Bald Head Limited accepted the authority’s offer.

The bond’s approval by the Local Government Commission was overruled by Bald Head Island village officials, who wrote a letter to state treasurer Dale Folwell in December 2017 opposing the purchase . The village cited potential ferry fee increases, alleged one-sided consultation papers, the apparent lack of an official credit rating from the authority and concerns about the system being overpaid. Village council members floated their own $54 million bid for the ferry, which was not considered by Limited.

Folwell and State Auditor Beth Wood slowed the approval process at the Local Government Commission due to questions about the merits of the deal. Wood initially criticized the two commissioned appraisals that factored in the $47 million purchase price. According to Susan Rabon, chairwoman of the transport authority, this was because Wood wanted the property to be sold at tax value. In January, Wood suggested Governor Roy Cooper replace three appointees on the Local Government Commission to push approval for the ferry.

The deal has seen no action at the Local Government Commission for a year and a half now.

Folwell defended his position following SharpVue’s announcement.

“My thoughts have never changed: it’s about transparency, governance and competence and how to bring certainty, especially to the majority of people who use this ferry, who are workers,” said said Folwell. “I mean, let’s face it: it’s a toll road and, you know, toll roads normally benefit the wealthy. But in this case, there is no other option.

Rabon said the authority has done everything it can do by following the statute and complying with the legislation.

“They wanted to keep it in the hands of a public body that would have the public interest at heart,” she said.

She added that the appeal of the public authority was to be able to keep prices reasonable for everyone.

“It’s really important for people to understand that 90% of the people who take the ferry don’t live on the island,” Rabon said.

SharpVue does not exclude contributions and “productive conversations” with the transport authority, the village and other stakeholders, Roberts said.

Rabon and Bald Head Island Mayor Peter Quinn, whose term began in December, both said they hoped to work with SharpVue in the future.

“They seem responsible and they understand exactly the role they’re trying to fill,” Quinn said. “I’m looking forward to working with them and trying to figure out how the Village is working with them in this new venture there.


Contact reporter Brenna Flanagan at brenna@localdailymedia.com.

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