Arnold Transit Sold

[Jon Paul]

The Arnold passengers ferries ran daily for the entire season without any interruption. Their dock in Mac City is 1 block from the Hotel I'm GM of and the word around town seemed to indicate that they were making headway back to solventcy.
The best way to get of the hole they were in was to make money and that was difficult to do running boats that took 40 minutes to get to the Island when their competing does it in half the time.
We sell discounted ferries tickets from a computer at the Hotel Front Desk. The once an hour schedule of Arnolds while Sheplers during the peak season times was running a boat from Mac every 15 minutes discouraged a lot of their potential passengers from riding with them.
Their will definitely be job losses in the process and in small towns like St. Ignace, the Island and Mackinaw, it will hurt.

[Guest]

I think it was a year ago the Island and Mackinaw Express were up for auction. That's where Pictured Rocks purchased the Island Express. The brown family held on to the Mackinaw and Arnold had the third one. Never knew how it played out from there though.

[AdminJason]

The three catamaran ferries were unavailable to the new owners, as the engine manufacturers were owned >$250,000 for repair work done; in fact the engine company took out the control boards so the boats could not be operated until they were paid. ... The company was able to regain ownership (lease?) of one of the catamarans this season, but they had not quite returned it to service by the end of summer - it was still awaiting Coast Guard inspection.

According what I've previously read on this forum, the Brown family retained ownership of the two older catamarans (Island Express and Mackinac Express) and leased them to Wynn when he took over the company, while ownership of the Straits Express transfered over.

This is why the the two older cats were sold -- the Browns repossessed those two vessels and sold them to a new operator.

According to vessel registration records, both are owned by a holding company in Munising affiliated with Pictured Rocks Cruises. The Island Express is now sailing for PRC under the name "Pictured Rocks Cruises," while the Mackinac Express is now with Star Line, presumably under a lease agreement.

Since Arnold retained ownership of the Straits Express, they kept that vessel and were actively refurbishing it to return to service this summer.

The press release doesn't mention the Corsair or the Straits Express. I'm sure there will be clarification in the near term, so anything else regarding those two vessels is speculation.

(The thought crossed my mind that, if Arnold is completely dissolving, then maybe Shepler's would go for those two vessels. The Corsair would make sense to compliment the Sacre Bleu for freight ops, but they seem rather committed to a consistent vessel type for passenger services and I don't think they'd want the catamaran.)

[Diver Dan]

The company was fine when run by the Brown family, but as they grew older and the next generation declined to take an active role, the family decided to sell. Jim Wynn of Petoskey put together a deal to take ownership, and that's when the troubles began. He is the one that tried to merge with Star Line and freeze out Shepler's, which caused a lot of fuss and hard feelings. Then he sold off the property at the head of the Arnold Island docks, leaving them legally unusable, losing the riparian rights, but retaining access via a lease deal. But he never made payments on the lease, so the docks were blocked off for a time, forcing them to use an alternate site, which annoyed neighboring property owners. Also, the money from the sales of property was never applied to any outstanding loans (from a Cincinnati area capital investment firm), leaving the business in default. Finally, Wynn disappeared (with the money) leaving the lien-holders holding the bag. The suddenly had to take over a business operation that had been stripped of it's most valuable assets - it was either operate the business or write off nearly the entire value of the loans.
The three catamaran ferries were unavailable to the new owners, as the engine manufacturers were owned >$250,000 for repair work done; in fact the engine company took out the control boards so the boats could not be operated until they were paid. The new owners made a strong effort to get things back in operation using the old monohull boats, but those were much slower. They were forced to cut prices, which did attract the "thrifty" crowd that didn't mind the slower trip to the island. The company was able to regain ownership (lease?) of one of the catamarans this season, but they had not quite returned it to service by the end of summer - it was still awaiting Coast Guard inspection.
The lien-holders clearly never wanted to be in the ferry business, they were a finance-oriented business. They only stepped in to avoid taking a huge loss. Star Line has been building up it's business in the last few years, they were able to buy (lease?) another of the catamaran ferries and put it into use this summer, so they were finally in a financial position to take over the Arnold assets. I don't know what they are paying, but it must be enough to satisfy the Cincinnati vendors needs enough that they can get out of the business.
The local news is that the deal includes ALL of the boats, docks, and area equipment. That includes the Mackinaw City and Mackinac Island docks, the Saint Ignace Mill Slip dock and boatyard, and also in Saint Ignace, the Favorite dock and Dock 1 (the passenger dock). The freight dock, Dock 3, near the Coast Guard Station, is city property which they leased annually. I assume that Star Line will take the lease next season.
Star Line will continue running the winter boat (Huron) for this winter, it should be a seamless transition of operation when the sale is finalized. Next season will bring about many changes in traffic patterns, but the companies will all work hard to handle the traffic to the island.

[Guest]

It's sad to see Arnold close but I'm not surprised. They had that mess when they tried to get the island to have an exclusive contract with them and Star, thus freezing out Sheplers, which blew up in their face. It seemed like since then the only time you heard about them it was bad news. They were so mismanaged. Really surprised it didn't happen sooner.

[Jared]

I know I saw one of Arnold's boats with a car deck dropping off a UPS truck and a WM truck back in June, but not one passenger boat was running and I was up there diving in June and early August. And as I said only saw the car hauler operating.

[Mr Link]

Interestingly, the deal with Star Line does not include the Straits Express or the Corsair; only the traditional ferries and the Mackinac Islander.

The press release only mentions that Arnold's is exiting the passenger business. And it mentions the sale of four docks. I believe Arnold's currently has 5: Mackinaw City, Mackinac Island, St. Ignace #1, St. Ignace Favorite, and St. Ignace # 3 (the freight dock down by the Coast Guard station.)

So perhaps Arnold's is staying in the freight business. We took a truck to the Island this summer on the Corsair for work and it looked like a busy, potentially lucrative, operation. Lots of hay and beer headed to the island on our trip, along with the UPS truck on the way back. And 2 Sysco Food trucks were still unloading on the island when we left. Perhaps they can survive with one boat and freight.

As for the Straits Express, perhaps Arnold's thinks it can get more on the open market that Star was willing to offer.

[AdminJason]

I figure the Arnold ferry service was in dire straits when I only saw the automobile ferry running to the island. It's a shame as they had ferries that had some classic lines to them. I hope that an investment is made to keep some of the older ones in operation.

When was this?

Arnold was definitely in a deep hole a couple years ago when everything initially hit the fan, and I believe for a while the only boats running were the Huron and I think the Corsair.

That they spent so much time refurbishing the Straits Express this summer gave me hope that maybe they were turning the corner, but clearly that wasn't the case.

Interestingly, the deal with Star Line does <b>not</b> include the Straits Express or the Corsair; only the traditional ferries and the Mackinac Islander.

Any thoughts/ideas/rumors as to where the Corsair and Straits Express may go?

[Jared]

A few of Arnolds ferries will probably never see service again. Sinking them in St Martin's bay just outside of St. Ignace. So when there is a strong east or west winds in the straits, diving opportunities to the east of the St Ignace harbor can occur. Now who the heck cares about ownership? The state always wants the wrecks that we find and claim ownership which in most cases they DON'T have, but when one wants to introduce an economic asset to promote tourism, they want nothing to do with it.

I figure the Arnold ferry service was in dire straits when I only saw the automobile ferry running to the island. It's a shame as they had ferries that had some classic lines to them. I hope that an investment is made to keep some of the older ones in operation.

[Diver Dan]

Arnold already has a boat stripped down that would make a great dive site, but they have no plans to sink one, or to donate a vessel. That idea was just a suggestion someone made in a comment on the article.

Intentional sinking rules are a lot tougher than they used to be, and the State of Michigan is reluctant to approve another sinking. The proper cleanup of a vessel for sinking now costs a tremendous amount, and there is still an issue over ownership of the sunken vessel. The State still denies ownership of the Selvick, sunk in the Alger Preserve nearly 20 years ago. Once it was sunk, the Preserve group thought that ownership/liability was turned over to the State, but the State still claims that the Preserve is the owner.

[Jared]

I thought there was a mention of them scuttling one of the older ferries in the straits to promote diving tourism. I wish they would do that with an freighter? The Ryerson would make an awesome dive site!

[garbear]

Article this evening in freep.com

http://www.freep.com/story/money/busine ... /93260488/