The state’s top economic development official says Gov. Paul LePage won’t be asking the Maine Legislature to use taxpayer money to help fund the ferry service between Portland and Nova Scotia, countering assumptions widely held in Nova Scotia that LePage plans to submit a bill to do just that.

The operator of the Nova Star ferry has been seeking a $5 million line of credit from a Maine bank since 2013 and has sought help from the state to secure it. But George Gervais, the commissioner of the Maine Department of Economic and Community Development, said in an interview Thursday that it’s up to the operator to get the loan – by convincing a commercial lender it can pay the money back.

“There is no legislative solution,” he said.

The Finance Authority of Maine, a quasi-governmental financing agency, has worked aggressively to explore options for Nova Star with private lenders, said Bill Norbert, the agency’s spokesman.

“So far, no takers,” Norbert said.

FAME is the banker-of-last-resort for Maine companies that have trouble accessing credit on their own. The agency can provide a company a direct loan for up to $1 million. But its most common method for helping companies is its Commercial Loan Insurance Program, which helps companies get a loan from a commercial bank by guaranteeing all or a portion of it.

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Even if the agency did find a commercial lending partner, there is no assurance that FAME would provide the guarantee until the underwriting was complete and officials were satisfied that the loan would be paid back, Norbert said.

During his re-election campaign last year, LePage said he would submit a bill that would help provide ferry operator Nova Star Cruises with a $5 million line of credit. Nova Scotia officials have been waiting months for the bill to be introduced.

Nova Scotia taxpayers have heavily subsidized the Nova Star service, which operates daily during the tourism season. Last year, in its inaugural season, the government originally committed to spend $21 million (Canadian) over seven years to re-establish the service, which had been suspended in 2009. But Nova Star Cruises spent that amount in the first few months and received another $7.5 million from the government so it could pay its bills for the remainder of the year.

This year, the Nova Scotia government has committed to spending $13 million on the service. The ferry is scheduled to arrive in Portland at 8 a.m. Saturday to begin preparations for the 2015 sailing season that begins June 1.

Geoff MacLellan, the Nova Scotia minister overseeing the service, was surprised to learn that LePage is not planning to submit a bill for the $5 million line of credit. MacLellan said he would not comment until he has a chance to meet with LePage. MacLellan will travel to Portland on the Nova Star in mid-June and wants to set up a meeting with LePage, either in Portland or Augusta.

“I want a face-to-face conversation with the governor and Maine officials,” he said. “I will wait until I have an opportunity to sit across from Gov. LePage and get a sense of exactly the interest in the Nova Star operation and the Yarmouth, Nova Scotia-to-Maine run.”

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The ferry last year carried 59,000 passengers, far short of the 100,000 passengers that had been anticipated. Mark Amundsen, president and CEO of Nova Star Cruises, said ticket sales this year are up, and he expects the ferry will carry 80,000 passengers this season.

The service had a “painful first year,” he said Friday in an interview on CTV News Atlantic, a Nova Scotia television news program. But the service will be more successful this year because the company has had more time to market the service, he said. So far, the company has booked 85 motor coaches – a significant increase over last year, when only 18 motor coaches traveled on the ferry.

When the television interviewer asked about LePage’s “promise” to give the company a $5 million line of credit from Maine, Amundsen replied that the Maine Legislature is a “different animal over there in how money is appropriated to private companies.”

He added, “They tried to do this through FAME, the Finance Authority of Maine. We didn’t fit into that program at all.”

 


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