Deal in motion to allow All American Marine, Fairhaven Shipyard to expand

The Port of Bellingham took steps this week toward facilitating the expansion of two Fairhaven marine businesses in a deal that would change 7.66 acres of Fairhaven industrial waterfront by July 2016.

Under terms in a memorandum of understanding between the organizations, the Port plans to help All American Marine and Fairhaven Shipyard expand on industrial property at the end of Harris Avenue in Fairhaven.

The main goals of the deal are to allow All American Marine to expand into a new warehouse that will be twice as big as its current facility and to replace a wooden pier that Fairhaven Shipyard currently uses for repairing public and private vessels with a new pier that will be able to handle heavier loads. The Port will also cleanup contaminated sediment in the process.

The project will require all parties involved to cooperate and dance around each other during construction.

Fairhaven Shipyard will move into a separate waterfront warehouse while the Port of Bellingham prepares its current site for construction of All American Marine’s new, larger warehouse. Once the new building is finished, All American Marine will move in and Fairhaven Shipyard will move into All American Marine’s old space. At the same time, pier replacement and an estimated $14 million in cleanup of contaminated sediments will take place, half of which will be paid for by Model Toxic Control Act grants.

“This was a very complicated transaction,” Port Executive Director Rob Fix said in a press release.

All American Marine CEO Mark Mullett said he’s been interested in expanding for about four years. His company has had opportunities to bid on contracts to build 400 passenger ferries, but those boats wouldn’t fit into the company’s 20,000-square-foot warehouse. The new warehouse will be 39,000 square feet and will allow them to build those bigger boats and eventually hire 25 to 30 more people.

“When a contract comes along for a 350 to 400 passenger ferry, we just have to shrug our shoulders and say maybe in the future,” Mullett said.

All American Marine specializes in aluminum catamarans that get used as ferries, cruise boats, and research vessels. Ferry districts and government entities are a top customer, as aluminum catamarans are fast and efficient as passenger-only ferries.

Mullett expects the market for passenger-only ferries to grow, as car ferries are less efficient and operate with tight margins.

“Right here in our own backyard, passenger ferries are terribly underutilized,” he said. “You go to other places like Hong Kong, Australia, New Zealand, Scandinavian countries, and there are massive numbers of passenger ferry boats.”

All American Marine is working on its second of two passenger boats for the King County Ferry District. The 105-foot-long, 250-passenger boat called the Doc Maynard will likely shuttle pedestrian passengers from the Colman Dock in downtown Seattle to West Seattle and Vashon Island.

A couple years ago, the company built a passenger ferry for Kitsap Transit. Kitsap Transit was interested in a passenger-only ferry boat because it could cut commute time from Bremerton to Seattle in half, Mullett said.

“We think there’s a huge possibility for a ferry going from Bellingham to Friday Harbor,” Mullett said. “Those are the kinds of the things that we see in the future and one of the driving influences of why we believe there’s a good market for our products.”

Even the 105-foot-long boats for the King County Ferry District barely fit in All American Marine’s current warehouse. There’s just a few feet of space on each side of the boat between its hull and the building’s walls. All American Marine had to buy narrower scissor lifts to work on the boats.

Neil Turney, CEO of Fairhaven Shipyard’s parent company Puglia Engineering, said in a press release that a new pier and improved site layout would allow Fairhaven Shipyard to expand it’s services and capabilities.

To fund the project, The Port of Bellingham plans to apply for $1 million in Whatcom County Economic Development Investment Program grants, $2 million in county Economic Development Investment loans, and state Community Economic Revitalization Board grants.

One of the county’s stated purposes for Economic Development Investment funds is to assist private sector business by making grants and low interest loans to Whatcom County public agencies.

“We think it’s a good match and a good use for what those funds are intended for,” said Mike Hogan, public affairs administrator for the Port.

If the Port doesn’t get the loan or grant money, a contingency in the memorandum of understanding allows it to walk away from the deal.

Under the planned deal, the Port of Bellingham would pay for site preparation and demolition of a building on the site of the future All American Marine warehouse. All American Marine would pay for tenant improvements to the new warehouse, which will be a pre-engineered building. All American Marine would repay the cost of the building overtime through a 25-year lease with the Port.

The deal is also contingent on Fairhaven Shipyard agreeing to vacate its current space.

“There are a lot of contingencies and there are a lot of unknowns in this project,” said Shirley McFearin, Port of Bellingham’s director of real estate, at a port commission meeting.

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