Critics Seek to Capsize Proposal to Merge Catalina Island’s Ferries

Just as the swarm of summer tourists is about to embark for Santa Catalina Island, the two ferryboat companies that serve the resort 26 miles off the coast of Long Beach are preparing to merge into a near monopoly, scaring some residents who are worried about schedule cuts and price hikes and causing consternation among employees who will lose their jobs.

The state Public Utilities Commission took testimony Thursday on the planned merger, hearing from islanders, union officials and even one businessman who says he offered to buy out--at a higher price--one of the transport firms and keep it independent and its 60 unionized crew members in place.

“We commuters will be at their mercy as we have been in the past,” said Marie Ursich, a longtime Catalina resident. She recently joined with 33 other residents to form the Catalina Island Assn. to fight the takeover of Catalina Cruises by Catalina Channel Express.

“Monopoly is not a good thing on the island,” she said, recalling the days before 1981 when Catalina Cruises was the only service to the mainland and would not let her carry an Easter lily on board because it was “freight.”

But others urged Administrative Law Judge Orville Wright to recommend the transfer as fast as possible as the countdown begins to the start of Catalina’s high tourist season, the mainstay of the island.

“I am acutely aware of those 100 golden days we have every year that start July 4th,” said city of Avalon Mayor Ralph J. Morrow Jr. “Golden,” he added, does not refer to sunshine but the stuff that makes businessmen smile.

“If you’re not organized and ready to go by the middle of June, you’re going to have a terrible year,” he said.

Undergoing the change of ownership during the summer, Avalon merchants and owners said, would be disastrous. Already, they said, Catalina Cruises has slowed marketing efforts for its slower, larger ferries in anticipation of its merger with Catalina Express, operating faster, smaller boats out of San Pedro and Long Beach.

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Catalina Cruises charges $23 to travel round trip from Long Beach. Catalina Express charges $34. At the beginning of the month, the commission granted a $1 increase for existing service and approved a request by Catalina Express to establish fares for vessels traveling slower than 18 knots, which it does not have in its fleet of six.

The deal awaiting approval by the commission, however, would sell the 700-passenger ferries operated by Catalina Cruises, and owned by Crowley Maritime Corp., to Catalina Express, which is owned by a longtime Catalina family. The price is $1 million.

As part of the package, all employees of Catalina Cruises would be laid off, although they can apply for jobs with Catalina Express. None of its employees are covered by a collective bargaining agreement.

“Something is fishy,” said Ted Sadler, a member of the Inlandboatmen’s Union of the Pacific, which is vigorously working to block the sale.

The union says that both parties to the deal have misrepresented the value of assets and operating losses over the years. It has asked Judge Wright to continue the hearing until the end of May to give it a chance to bring in an expert witness to review financial statements. Catalina Cruises says that for the last five years it has been losing at least $500,000 annually.

The union also questions why another offer from a Newport Beach businessman was not accepted.

Catalina Express’ plan to terminate experienced workers and replace them with part-timers for the summer season, the union says, will hardly allow for the smooth transition that the mayor and members of the Chamber of Commerce say is imperative for the tourist season.

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The head of the Chamber of Commerce, Wayne Griffin, said that it’s not important who runs the service but instead, that it will be there and reliable.

“There are some people for whom speed is more important than price and there are some people for whom price is more important than speed,” he said. “There is certainly room in the marketplace for both types of service.”

Still, the thought of having just one company running the boats worries Catalina resident Bill Sheridan.

“My dad taught me since I was a little boy that the great thing about the enterprise system is that you have a choice. If you don’t like the service you’re getting, you go across the street,” he said.

“I don’t think the PUC understands the depth of feeling in the city of Avalon about this action,” he said.