BY CHUCK VANDENBERG
FORT MADISON – Options of funding a dock on the west end of Riverview Park that would secure a Viking Mississippi River cruise in Fort Madison were varied at Tuesday’s City Council meeting.
The dock, which is estimated at a cost of $1.7 million, is part of the negotiations that are currently ongoing with the city and Viking Cruise Lines.
City Manager David Varley said Viking has agreed to pay $500,000 toward the cost of the project leaving the city to fund the additional $1.2 million. The cost of construction is estimated at $1.21 million, but a 30% contingency fund coupled with design and engineering costs of 7% push the total to $1.7 million.
Originally, Viking had agreed to pay a dock rental of $1 per passenger for each docking, but Mayor Brad Randolph said the cruise lines will either pay the rental or pay the $500K up front, but not both.
He also said the city won’t spend another dime on the project until they know for sure it’s a go. The city has already secured a feasibility study with SmithGroup out of Madison, Wis. for just under $25,000.
Varley said the numbers are pretty solid because SmithGroup is one of the top two companies in the country doing this kind of work and have built docks all over the world.
He said the agreement would not be exclusive, so anytime Viking wasn’t docked in FM, other entities would be able to use it. Viking is expected to start cruising in 2022. They would cruise July through October with initial cruises projected at two per week through Fort Madison.
Councilman Mark Lair asked if the funding would come from a bond that would require a vote.
Varley said a general obligation bond funding is not the easiest thing to do, but could be done and would require the vote.
Randolph said establishing a solid partnership with Viking is paramount going forward.
“The key for the city is to make sure we have a good partnership and that we don’t feel like we’re spending money where we could end up losing money if something happened down the road.”
He said options have included dollar-for-dollar matches as well as having Viking finance the whole deal and have the city pay them back with interest over 20 years.
“Under that deal our upfront liability would be minimal and if for some reason Viking’s cruises didn’t go as well as they liked in years three, four or five, they’re on the hook for the infrastructure costs. Whether they would do that deal or not, I don’t know.”
Randolph threw out some estimated numbers if Viking were to finance the whole dock project over 20 years. He said the city would be looking at very roughly $100,000 per year.
Councilman Bob Morawitz said he would want to see where the city would see a return on the investment.
“If we do the deal at all we’re going to end up spending $100,000 a year – or even it’s $50,000, where are we going to make $50,000 a year off this. What’s our return on our investment?” Morawitz asked.
Rusty Andrews said it was a valid question with an intricate answer.
“Its the same question we asked of the Amtrak Depot” Andrews said.
Randolph said it’s similar to most incentives the city gives and hopefully results in stimulation.
“We’re counting on a stimulation of the economy because the boat is here. If you’re asking me if that’s going to put $100,000 in the city’s pockets every year, I can’t guarantee you that,” Randolph said.
Varley said there are incentives included as part of the ticketing fare that are intended to keep people in the ports of call.
“It would have to be looked at as a communitywide benefit and that’s what the council will have to make a decision on,” Varley said.
Morawitz said he would like to see more research on the impact of cruises on city economies, even if that research comes from overseas.
The council agreed to keep moving forward with discussions and research and to bring the item back for further discussion.