The city of Portland has reached a lease agreement with Nova Star Cruises Ltd. that would give the Canadian company the rights to use the Ocean Gateway terminal as its base of operations for the new passenger ferry service between Maine and Yarmouth, Nova Scotia.

Gregory Mitchell, the city’s economic development director, will present the terms of the proposed lease to the City Council’s Housing and Community Development Committee on Wednesday. The committee is scheduled to meet at 5:30 p.m. in City Hall.

Committee members are expected to take public input before voting on whether to recommend approval of the lease to the full City Council. The lease could be adopted at the council’s meeting on Monday night.

“We’ll see if we are happy with it,” said Councilor Kevin Donoghue, who chairs the committee. “We’d like to tee it up for next week. We understand there is a timing issue to this.”

Nova Star Cruises wants to start its seven-day-a-week ferry service on May 1. Its season would run through Oct. 31. The proposed lease calls for the agreement to take effect April 15. It would expire Oct. 31, 2016. There is a provision that would allow the lease to be renewed in two-year increments, effectively offering the company the opportunity to lease Ocean Gateway for up to six years.

Mitchell could not be reached Wednesday night, but Donoghue said he expects that the committee will make a recommendation after taking public comments.


Donoghue said the committee may have to go into executive session to review certain provisions of the agreement, which took two months to negotiate.

The city published highlights and terms of the lease on its website Tuesday.

Under the proposal, the city would give Nova Star Cruises exclusive rights to use the Commercial Street facility during its primary operating season from May 1 through Oct. 1.

Nova Star would be required to invest an estimated $225,000 in improvements to the Ocean Gateway facility, primarily to accommodate new U.S. Customs and Border Protection staff. The improvements will include new fences and gates, more lighting, and modifications to passenger screening booths.

In return for use of the waterfront property, the city projects it will receive between $150,000 and $400,000 a year in lease rent and fee revenues. Mitchell, in the documents posted on the city’s website, calls the revenue estimates “conservative.”

Last week, the Portland Press Herald reported that Nova Star Cruises has not applied for two federal permits it will need before it can sell tickets or sail from a U.S. port. Company officials, however, maintained that the venture is still on track for a planned May 1 launch.

The ferry, called Nova Star, has 163 cabins and the capacity to hold 1,215 passengers. The lease agreement would allow the ship to berth at Ocean Gateway between 7 and 11 p.m. It would depart at 10 p.m.

Dennis Hoey can be contacted at 791-6365 or at:

[email protected]

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