Plans scrapped for Oregon-based floating hotel in a former Alaska ferry

Plans to turn an old Alaska state ferry into a floating hotel in Portland, Oregon, have been abandoned, and the ship will instead be sold to a company in Dubai, a state official said Thursday.

"The Portland bidder dropped out," said Aurah Landau, spokeswoman for the Department of Transportation and Public Facilities. "They were having some permitting issues."

In September, the state announced that the M/V Taku had been sold to the Portland company for $300,000, after three companies bid on the ship.

After the Portland bidder withdrew in November, the state returned to the other two companies and gave them a second chance to bid.

Jabal Al Lawz Trading Est., based in Dubai, United Arab Emirates, emerged with the highest bid, at $171,000, Landau said.

Landau wasn't sure what the fate of the vessel would be once it was turned over to the new owner. "The state's focus has been very much on getting the best value," Landau said.

Rishi Aggarwal with Jabal Al Lawz Trading Est. said in an email that the company had been extremely lucky to buy the ferry.

"We are specialist handling vessels round the world going for demolition so we purchase anything that's floating," Aggarwal wrote.

Aggarwal wrote that the ship would be "running somewhere in the far east islands."

For more than 50 years, the Taku operated as part of the Alaska Marine Highway System.

But the 352-foot ship designed to carry 350 passengers was deemed too costly to maintain and exceeded the needs of the ferry system, DOT said. The vessel was taken out of service in June 2015 and remains at a mooring facility in Ketchikan.

Landau said the sale would be finalized by the end of December.