Such a deal! State plans to drop asking price for ferry that didn’t sell for $700,000

Calling all scrapyards, South American archipelagos and tech billionaires: Alaska still needs a buyer for a 300-foot, half-century-old ferry.

The state Department of Transportation has now tried and failed twice to offload the Motor Vessel Taku, with its most recent effort a sealed-bid sale with a $700,000 minimum that drew no offers before a May 31 deadline. That came after a previous effort with a $1.5 million minimum that also drew no bids, and an offer to transfer the ship to another state agency or municipality.

The department is now planning to put the Taku up for sale a third time at a lower, still-unspecified minimum, said John Falvey, the Alaska Marine Highway System's general manager.

"We're trying to get as much funding for the state as we can. So, we're trying to be very careful with how we price it," he said in a phone interview from Ketchikan, where the Taku is moored. "Hopefully it's not going to be something where we just give it away to get it off our hands — I'm hoping we can get something for it. But it's not going to be $700,000, that's for sure."

Falvey said his department got about two dozen inquiries about the Taku, but "no takers."

The first two asking prices raised eyebrows among industry insiders, who said it would be difficult to get much for the vessel on the relatively small market for secondhand passenger ferries.

"If they can find that level, great — everyone wants to maximize their asset value. But realistically, that's not where the market is right now for an old girl like this," said Martin Coombe, a ship broker with Washington-based Marcon International Inc.

It's possible the state could find a wealthy customer who wants to repurpose the Taku as a luxury yacht, Coombe said.

But it most likely will go to a more lightly regulated ferry system in South America or the South Pacific, where a potential buyer wouldn't have to spend as much money to comply with regulations. Or it will end up at a scrapyard.

"And none of those are going to pay very much money," he said.

The Taku — named for the glacier east of Juneau — was built in Seattle and went into service in 1963 as one of the first three vessels in the Alaska Marine Highway System's fleet, along with the Malaspina and Matanuska. It's designed for 370 passengers.

Those other two ferries were subsequently lengthened but the Taku wasn't, making it less efficient to run and a candidate for retirement, Falvey said.

The Taku worked primarily on the Southeast Alaska mainline route between Ketchikan and Skagway before being officially taken out of service in 2015, and it's now moored in Ketchikan at a cost of $181,000 a year.

After the two unsuccessful sales, the Taku seems poised to become the latest Alaska ferry with a colorful disposal story.

In 2003 — the last time the state sold a ferry — the Bartlett went for $389,500 on eBay after drawing dozens of online bids. The buyer: Salmon Man 1953, the user name for the late Lloyd Cannon, a seafood industry executive.

More recently, the Matanuska-Susitna Borough ended a five-year-long saga with the Motor Vessel Susitna, an $80 million, 200-foot U.S. Navy prototype that the federal government largely paid for.

The borough spent more than $12.5 million on maintenance and repairs on the ferry despite never using it for passenger service. It offered to give it away for free to government agencies and tried to sell it for years for as much as $6 million before it eventually went for $1.75 million to the Philippine Red Cross for disaster missions.

[Troubled Mat-Su ferry gets a new name in the Philippines, leaving its checkered past behind]

"When we started, we thought we could easily get 50 percent of what the building cost was because it was a brand-new vessel. And it turned out you're lucky to get 5 percent," said Marc Van Dongen, the Mat-Su port director.

The re-christened Motor Vessel Amazing Grace was commissioned in Manila last month by Philippines President Rodrigo Duterte, who gave a speech saying he hoped it would "inspire us to come together and reach out to anyone who may need aid and comfort," the Arabian Post reported.

Other Pacific Northwest ferry systems have been able to sell their old ferries. But the limited market makes it a challenge, said Deborah Marshall, a spokeswoman for British Columbia's ferry system.

Two British Columbia vessels — Queen of the Chilliwack and Queen of Prince Rupert — were sold to a nascent ferry business in Fiji, while another, the Motor Vessel Tenaka, went to a company that intends to use it for passenger and freight service off Vancouver Island. BC Ferries — a private company subsidized by the government — doesn't reveal purchase prices, Marshall said.

Washington, meanwhile sold the Evergreen State for $300,000 earlier this year to a company that will use it for passenger service in the Caribbean, while the Hiyu went for $150,000 to a man who plans to turn it into a floating cabaret in Seattle.

Coombe, the Washington ship broker, said Alaska state officials would likely have to do more to spread the word that the Taku is for sale, since it doesn't seem to have been widely advertised outside of Alaska. But Falvey, the ferry system's general manager, said the state will make one more effort at a sealed bid sale before considering other options like hiring a broker.

An August state-commissioned engineering report on the Taku included a long list of potential repairs, but Falvey said the ship can still be operated and could have stayed in service in Alaska.

Asked to compare the Taku to a used car, he said it's like "an old VW that is still functional, still serviceable and might need some tender love and care as far as some mechanical work — but nothing really major."