Ferry Operators Cancel Merger Deal

Operators of a ferry service to Santa Catalina Island have backed away from a deal to acquire the resort town’s other commercial seagoing transportation link to the mainland.

Catalina Express owner Doug Bombard said company officials decided to drop the multimillion-dollar deal last month after opponents persuaded a state regulatory commission to open a lengthy hearing on the merger.

Island residents argued against the merger, saying it would have created a virtual monopoly on ferry service to the mainland. They were joined by 60 unionized employees of Catalina Cruises, who feared layoffs if the Public Utilities Commission approved the deal.

Catalina Cruises operates three 700-passenger ferries and a smaller vessel, all of which would have gone to Catalina Express for $1 million cash plus the assumption of at least $5 million in liabilities.

Alan Zurawski, vice president and general manager of Catalina Cruises, said company executives still hope to sell the assets. He added that “the cash portion would be at least the same amount if not more” to the next bidder.

Bombard expressed disappointment that commissioners would not approve the deal before the end of the year. Originally, he said, the company was hoping to complete the negotiations by last spring.

But things could be looking up, he said, as Express prepares to begin ferry service to the island from Dana Point.