Few bite on taxpayer-funded cruise ship lure in Detroit

Taxpayers anted up $22 million for a new Detroit riverfront building to entice Great Lakes cruise ships and other passenger traffic. They built it — but the ships never came.

Instead, four years after construction of the Detroit/Wayne County Port Authority public dock, the building is used almost exclusively by a politically connected catering company for deluxe weddings and other parties.

Only one cruise ship has docked this year at the sleek, 21,000-square-foot building near the Renaissance Center — an improvement from zero in 2014. The Detroit/Wayne County Port Authority building, meanwhile, gets plenty of party use by its caterer, Troy-based Continental Services.

On its website, the building is marketed as Waterview Loft@Port Detroit, a venue combining “indoor sophistication and outdoor chic” where wedding parties for up to 100 people start at $18,500.

Continental also owns a luxury yacht, the Ovation, that offers party cruises from the port for about $100 per passenger. The caterer pays $500 docking fees for every cruise, and the arrangement strikes waterfront business owner Gregg Ward as wrong.

“Turning a $22 million taxpayer-funded Port Authority building into a glorified catering hall and political fundraising venue is inappropriate and scandalous,” said Ward, who operates a truck ferry on the Detroit River.

Ward referred to a $1,000-a-plate birthday party last July for Mayor Mike Duggan that public records indicate raised at least $40,000 for his nonprofit.

John Loftus, the authority’s current executive director, put an end to such fundraisers when he arrived last August, saying rules are “very clear” about about such events on public property. “You don’t do political functions,” he said.

Duggan spokesman John Roach said the fundraiser wasn’t political because it raised money for the Detroit Progress Fund that pays for employee travel and other city expenses that Detroit can’t afford. The fund paid Continental $6,500 for the building, Roach said.

Steven Rybicki, vice president for Continental Services, said “we know that it can’t be a political event.”

Continental Services is a well-known company that also has a contract to serve inmate meals at the Wayne County jail. Its founders, Alex and James Bardy, donate heavily to Democrats and local officials.

A political action committee affiliated with their company, Sterling PAC of Continental Services, was formed by longtime Democratic fundraiser Ron Thayer, campaign records show. It has donated tens of thousands of dollars over the years to local officials including Duggan, Wayne County Sheriff Benny Napoleon and Macomb County Executive Mark Hackel.

Revenue edges expenses

Weddings and corporate events provide the authority with one of its few consistent revenue sources, almost $140,000 in 2014. Continental pays the authority 15 percent of event sales, with a $1,500 minimum per event.

That’s not much more than the $128,000 the authority spent on office expenses that year, according to an audit of the agency. Almost all of the authority’s $1 million budget comes from federal grants and subsidies from the state, city and Wayne County.

Loftus acknowledged the challenges facing the building named after former U.S. Sen. Carl M. Levin. But he and authority member Alisha Bell defended the Continental contract, saying it attracts visitors and creates jobs.

“It brings in money and it’s a beautiful space for weddings and events that enhances our visibility,” said Bell, who is also a Wayne County commissioner.

Loftus, who was hired after the contract was signed, said it was competitively bid and Continental offered the best deal.

Some authority members have questioned the five-year contract that was signed in 2012.

“We are looking at this agreement and many others that were put in place in years past,” said authority vice chairman Jonathan Kinloch.

“This is a public facility. You would imagine there would be more events besides weddings that would benefit the broader community. It’s not uncommon to have weddings at public facilities. But you do question it when that appears to be its primary purpose.”

The catering agreement requires Continental to provide menus and other event details a month in advance. It also entitles the Port Authority to use the ground floor when a cruise ship arrives at the dock, but requires at least six months notice to the caterer before a cruise ship docking.

Eugene “Skip” Mongo, a Detroit political consultant, said he was shocked recently when he inquired about renting the building for his son’s wedding.

Continental’s estimate was $38,000 for 150 guests, more than twice that quoted at comparable venues, Mongo said.

“This is supposed to be a public building. Instead, we spent $22 million to host parties and for a private yacht,” Mongo said.

“The symbolism of it is awful.”

Authority, Customs at odds

Loftus said he’s working to bring in ferry service to Windsor and cruise ships but cites problems, including resistance from U.S. Customs officials.

The cruise ship St. Laurent docked in Detroit two weeks ago after an unexpected route change. “They liked it so much they decided to come back,” Loftus said. But when the ship returned last week, U.S. Customs officials refused to staff the terminal so passengers could disembark: they landed in Windsor instead.

“I have been going back and forth with (Customs) and I am at my wit’s end,” he said.

Kris Grogan, a spokesman for U.S. Customs and Border Protection, responded in an email that the agency “has never refused to service passenger/cruise ships in Detroit.”

“The facility in question has not been completed and does not meet the IT and security requirements necessary to properly process cruise vessels and/or cruise passengers,” Grogan wrote in the email. “These and other issues were discussed with the Detroit Port Authority over 4 years ago.”

Another former frequent user of the port, The Yankee Clipper, was seized by a German bank in 2013.

Ex-director disappointed

Loftus’ predecessor, John Jamian, said he had deals with three cruise companies to anchor in Detroit this year, but all canceled after the Port Authority did not renew his three-year contract.

He said the building was regularly used for public meetings and other public events during his tenure.

“I’m just shocked and disappointed at what’s happened,” said Jamian, a former Republican state lawmaker who led the U.S. Maritime Administration for three years in the mid-2000s.

Chris Conlin, founder of Ann Arbor-based Great Lakes Cruise Co., urged patience.

He said the port building positions Detroit to grab a share of the slowly increasing lakes cruise market. In 2015, four ships offered 26 cruises around the lakes for 150-250 passengers apiece. The six-11-day cruises cost $3,000 to $9,000 per passenger.

In years past, cruise ships anchored at the Boblo Island docks in industrial southwest Detroit, providing grim visuals for tourists.

“Detroit had to make this investment to become a viable port of call,” Conlin said. “Is it a build it and they will come situation? I think it is.”

LBerman@detroitnews.com

(313) 222-2032

jkurth@detroitnews.com

(313) 222-2513