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VOL. 126 | NO. 98 | Thursday, May 19, 2011

Steamboats To Call Miss. River Home Once Again

By Bill Dries

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The overnight riverboat cruise business has certainly had its share of false starts in recent years. The trouble began in 2001, six years after The Delta Queen Steamboat Co. had the largest steamboat in the world built. The company went bankrupt and The American Queen went out of service.

“Anyone that has a city seal with a steamboat in it, ought to have the biggest and largest and grandest and most opulent steamboat ever built calling Memphis their
home port.”

– John Waggoner,
President and CEO, The Great American Steamboat Co.

It returned under different owners and went out of service again when they got out of the cruise business.

There is now no Mississippi riverboat cruise business to get out of.

“It creates a great opportunity for us,” said John Waggoner, president and CEO of The Great American Steamboat Co., the newly formed company with a One Commerce Square address that wants to make Memphis home port for the refurbished American Queen starting in the spring of 2012.

“This is the first time in 192 years there has not been an overnight cruise go down the Mississippi River. If we are completely full on the American Queen … we would still only service 42 percent of the market that was once served four years ago.”

Billed as the world’s largest steamboat, it came to the Memphis riverfront in the mid-1990s shortly after it was built for the Delta Queen Steamboat Co. at a cost of $60 million.

It is 418 feet long and 89 feet high. The boat has 222 staterooms for 436 passengers. It also has a theater on board and a calliope with 37 gold-plated brass pipes custom built for the American Queen.

“Anyone that has a city seal with a steamboat in it, ought to have the biggest and largest and grandest and most opulent steamboat ever built calling Memphis their home port,” Waggoner said.

GASC put down $500,000 in April to secure a contract on the American Queen, which has been owned by the U.S. Maritime Administration since 2008 when Majestic America Line got out of the riverboat cruise business.

Waggoner and his company were looking at North Mississippi.

“We went well down the path with the state of Mississippi,” he said. “They were very interested in the project. And yet one of the final concessions was to stop in Tunica and not in Memphis. That was the straw that broke the camel’s back. Memphis is such a big draw.”

To close on the deal, GASC needs $15.5 million. The money is to be raised by local investors being assembled by Morgan Keegan and the local investment group would then lease the boat to GASC.

Pittco Management is already “a substantial investor,” according to Pittco President John Pontius.

“We keep the vessel in local hands so that we have an opportunity to have a great deal of say about how it is utilized and how Memphis is represented,” Pontius told the Memphis City Council.

The city of Memphis will get an $89 landing fee per passenger each time the American Queen docks in Memphis for the next 10 years.

The revenue stream of $2.4 million a year with 64 stops, assuming a sold out 436 passengers each time, would pay off the $9 million loan the city will make for the refurbishment of the boat. The money being loaned is U.S. Department of Housing and Urban Development funds from the section 108 program, a pool of funding for economic development projects in general. The fees would also finance finishing Beale Street Landing.

“We think that between any remaining boarding fees and any local sales tax, we expect to have enough dollars either direct or indirect to pay for that boat dock,” said city Housing and Community Development Director Robert Lipscomb.

The City Council approved the arrangement at its Tuesday session.

For Memphis Mayor A C Wharton Jr., the deal completes a problem he inherited. The boat landing advanced without enough funding for the next phase as the city went through three mayors between July and October 2009. He originally said the city would scale it back, but later reconsidered because of how far along the project is after spending $30 million. The city is now $9 million short of completing the project.

“It meets a number of needs,” Wharton said this week of the GASC plan. “It’s a perfect fit. I won’t rest until we have full development of the riverfront and not just anything. There has to be a fit.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 21,272
MORTGAGES 0 0 16,194
FORECLOSURE NOTICES 0 3 1,490
BUILDING PERMITS 0 1 41,921
BANKRUPTCIES 0 6 6,585
BUSINESS LICENSES 0 0 3,097
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0