'It wasn't just the purchase of a lemon, it was the purchase of a jumbo lemon', Sen. Johnson tells Daily News

Senate committee report slams agency that runs Governors Island for buying worn-out ferry

BY GLENN BLAIN

DAILY NEWS ALBANY BUREAU

Tuesday, August 18th 2009, 4:00 AM

Agency that runs Governors Island drew ire for sinking more than $900,000 on this ferry, then selling the useless boat on eBay for $23,600.

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ALBANY - All in all, it was a ferry stupid idea.

In a scathing report listing a litany of incompetence and "flawed" judgment, a Senate committee accused the agency that runs Governors Island of sinking $900,000 in public money into a useless ferry.

The Senate's Investigations and Government Operations Committee blasts the state Governors Island Preservation and Education Corp. for "flawed judgment" in buying the 200-foot M/V Islander in 2007 as a "backup" ferry.

The state paid $500,000 for the boat, sank $422,645 into it for legal fees, consultants and other things - and ended up selling the rusting hulk for $23,600 on eBay.

Net loss: $899,045.

"It wasn't just the purchase of a lemon, it was the purchase of a jumbo lemon," said the committee's chairman, Sen. Craig Johnson (D-L.I.).

- The panel said GIPEC, a subsidiary of the state's Empire State Development Corp., relied largely on the advice of a single consultant.

The consultant, Marine Safety Consultants, previously surveyed the ship for its former owner, the Woods Hole, Martha's Vineyard and Nantucket Steamship Authority. The committee called that a "potential conflict of interest."

- The report accused GIPEC of ignoring other warnings about the ship's condition. It said William Welch, of Harbor Ferry Services, which operates GIPEC's working ferry, surveyed the Islander prior to the bid and raised concerns about the vessel's condition, especially its steel hull.

- The committee blamed GIPEC's board of directors - headed at the time by then-Deputy Mayor Dan Doctoroff - for a "troublingly detached" role in the purchase. The board did not even ratify the deal until three months after it happened.

"It was almost a nonchalant attitude by the Governors Island staff," Johnson said. "They wasted almost a million dollars."

He recommended disciplinary action against Governors Island staff and possible legal action against its consultants.

A Governors Island spokeswoman declined to comment.

GIPEC bought the 59-year-old Islander from the Steamship Authority in a three-week public auction in the summer of 2007.

Governors Island President Leslie Koch told the Senate committee the agency sprang for the $500,000 purchase even though it did not have time to make an inspection.

Afterward, an engineering firm found the Islander to be in "generally poor and worn-out condition" and needed up to $7.2 million in repairs.

Agency officials tried to unload the ferry and ended up selling it on eBay to Donald Slovak, an upstate scrap metal collector.

Slovak has yet to claim the Islander because of a dispute with the state over insurance.