May 6, 1999
To:Economic Development Committee
From:Joe Halstead, Commissioner of Economic Development, Culture and Tourism
Subject:Toronto-Rochester Fast Ferry Initiative and Lake Ontario Fast Ferry Corporation
(LOFF) Project
Purpose:
To provide the Economic Development Committee with an overview of the work that has
been done to promote the establishment of a year round car/fast freight/passenger ferry service
between Toronto and Rochester, New York, the economic benefits that would be associated
with the ferry service and to introduce the Lake Ontario Fast Ferry Corporation's (LOFF)
project to the Committee for its endorsement.
Funding Sources, Financial Implications and Impact Statement:
No funds are required at this time. The City should consider road, signage, and landscaping
improvements at the public entrance of the proposed ferry terminal at the bottom of Cherry
Street. This would be included as a submission to the year 2000 capital budget.
Recommendations:
It is recommended that:
1.that City Council actively support the establishment of fast ferry service between Toronto
and Rochester in order to strengthen and develop new economic alliances between the
regions, improve the City's access to markets in New York and the eastern U.S. and increase
opportunities for international tourism.
2.that City Council endorse the Lake Ontario Fast Ferry Corporation's cross lake ferry
project and request City staff and the Toronto Port Authority to work closely with the
company with respect to its implementation.
Council Reference/Background/History:
In 1996, the City's Economic Development Division, the Toronto Economic Development
Corporation (TEDCO) and the City of Rochester undertook a preliminary financial and
economic analysis study on the feasibility of establishing car/fast freight/passenger ferry
service between the two cities using the consulting services of Transportation Economic and
Management Systems Inc. The ferry concept that was evaluated was based upon using high
speed ferry technologies similar to those being used to cross the English Channel and other
major international ferry routes. These ships are generally capable of carrying up to 200 cars
(or a combination of cars, busses and light freight trucks) and 800 passengers. They run
regularly scheduled routes on a year round basis. It should be noted, that this type of ferry
service is completely different from recent seasonal ferry operations that have been moving a
limited number of passengers between the City and Niagara Region during the summer
months.
The primary conclusions of the study are:
-that the demographic and attitudinal profile of people within the Ontario/New York travel
corridor can support an automobile/passenger ferry service between the Toronto and
Rochester areas as measured by current and induced demand.
-that a fast ferry capable of carrying both autos and passengers would be highly viable in
financial and economic terms.
-the rates of return achieved by an automobile/passenger ferry are sufficient to attract private
sector investment.
-passenger fares, passenger vehicle charges, duty free sales and fast freight tariffs combine
to produce revenues that exceed capital, operating and terminal costs to a level that is realistic
to expect the private sector to take equity and debt positions in a project.
For many years people have relied on various modes of transportation such as automobiles or
buses to travel between Ontario and New York state. For many years there have been no
quick, economical alternative means of travelling between these two regions. In fact, regular
airline service between Toronto and Rochester is unavailable for leisure and business
travellers and smaller field air charters exist but are uneconomical for the target audience.
Until the 1950's, Lake Ontario served regional, national and international traffic with
passenger ships and ferries. There are now a number of reasons to believe that a new age of
Lake Ontario passenger travel is about to arrive. These reasons identified in the feasibility
assessment include:
-expressways surrounding Lake Ontario have become congested, in particular, those that
serve the Golden Horseshoe between Toronto and Buffalo. The size of the travel market in the
Toronto/Rochester/Eastern U.S. travel corridor exceeds 7.6 million trips per year. This market
is forecast to grow to about 11.6 million trips by 2020, an annual growth rate of 1.9 percent. It
is expected that, in the absence of new expressway construction or the creation of additional
boarder crossing points, that the growth in annual trips will result in increased travel times and
delays at the boarder.
-air deregulation has significantly reduced air service across the lake such that today there is
no service between Toronto and Rochester.
-existing fast ferry catamaran technology, proven in operations around the world, provides
the capacity to safely move large numbers of passengers, automobiles and parcel freight
quickly across Lake Ontario at all times of the year. Fast ferries now achieve speeds of 40 to
50 knots allowing a lake crossing in just over two hours. In comparison the drive between
Toronto and Rochester takes over 4 hours.
-market analysis shows that an extensive Fast Ferry service would attract a significant
number of tourists and business travellers directly into the Toronto and Rochester areas via a
unique and convenient transportation mode.
Comments and/or Discussion and/or Justification:
Toronto is the dominant financial, commercial, manufacturing, transportation, social and
cultural centre of Ontario with over 75,000 businesses in the City. It has strong economic
links to North American sea board cities such as New York and Boston and with a population
base of 4.4 million in the Greater Toronto Area, it is the 6th largest metropolitan area in North
America. It is the home of North American professional sport teams, such as the Toronto Blue
Jays, the Toronto Maple Leafs and the Toronto Raptors. The attractions of the city drew 22
million visitors in 1998, with a significant number of the visitors coming from New York,
Michigan and Ohio.
The Rochester metropolitan area has a population of over 1.1 million people and has a
business base that reflects a number of high-tech and high growth sectors such as advanced
optics, health care, and plastics products. The city is home to Kodak, North America's
foremost producer of photographic goods, Xerox Corporation, IBM and Bausch & Lombe.
Rochester's businesses distribute products across all of the U.S. and Canada. The area ranks
as the highest export centre in the U.S. on a per capita basis, with total exports valued at over
$15 billion. Furthermore, many other sectors of Rochester's economy are integrated with U.S.
and Canadian production on both sides of Lake Ontario.
A regularly scheduled fast ferry service between the two areas represents an opportunity to
further link two of the most dynamic economies in the Great Lakes region. Ferry service has
been compared to establishing a new bridge between Canada and the U.S. while at the same
time reducing travel times. Ferry service would effectively establish a new boarder crossing at
the base of the City and would thereby increase our access to the business and tourism
markets in upper New York state and along the eastern United States. Overtime, ferry service
could become an important component of our business infrastructure playing a similar role to
that of the City's airports.
The estimated economic benefits to Toronto and Rochester from having a fast ferry service
across Lake Ontario are very significant. The key benefits are:
-increased inter-regional mobility, improved access to markets, and benefits to travellers in
terms of reduced travel times and costs.
-very significant resource savings and, in particular, reduced demand on the congested and
environmentally sensitive highways in the Niagara Peninsula. Studies have shown that ships
produce 33% less pollutants than diesel trains and 373% less than diesel trucks, when
compared on a basis of tonne-kilometre per litre of fuel consumed.
-the development of an increased level of industrial, social and cultural interaction between
the economies of Southern Ontario and northwest New York state and, in particular, between
Toronto and Rochester.
-increased tourism growth and the creation of opportunities to develop "two nation
vacation" packages where visitors could fly into Toronto and visit our attractions, the Finger
Lakes, Cooperstown and Niagara Falls.
-future waterfront development that could include a permanent ferry and cruise ship marine
terminal perhaps combined with duty free shopping, general retail, restaurants and tourism
attractions.
-the direct benefits related to the creation of this new service industry would include new
employment with about 250 direct, highly skilled full time jobs and the direct purchase of
supplies and services valued at over $40 million in annual spending.
The Cities of Toronto and Rochester have spent considerable time and energy with respect to
the development of the Fast Ferry concept during the last few years. It would be appropriate
for the new amalgamated City to reaffirm its support for the initiative. Economic
Development staff are recommending that City Council actively support the establishment of
fast ferry service between Toronto and Rochester in order to strengthen and develop new
economic alliances between the regions, improve the City's access to markets in New York
and the eastern U.S. and increase opportunities for international tourism.
Lake Ontario Fast Ferry Corporation (LOFF) Project: upon completion of the fast ferry
feasibility assessment the cities of Toronto and Rochester were contacted by a number of
companies interested in the implementation of the fast ferry concept. The Lake Ontario Fast
Ferry Corporation (LOFF) was incorporated in 1997 with a mission to establish year round
auto/fast freight/passenger ferry service between the two cities. LOFF undertook its own
market analysis and has confirmed the market potential identified in the earlier study. They
have now prepared a detailed business plan for the project, have chosen a ship design, and are
in the process of arranging financing for the project. The project as currently being proposed
would be a completely private sector venture. They hope to begin service in the summer of
2000. The following is a summary of the proposed service.
Ships:Two Austal 86 meter catamarans valued at about $80 million. Scheduled to be
built in Australia to St. Lawrence Seaway and Coast Guard standards.
Capacity:800 passenger and 175 autos (or a mix of autos/busses/small trucks).
Amenities:Restaurants, entertainment facilities, duty free shops, child care.
Crossing Time:2 hours, 10 minutes
Schedule: 12 trips per day, 6 in each direction.
Leaving Toronto at: 6:30, 9:30, 12:30, 3:30, 6:30, 10:30
Fares:Average one way fare.
Automobile:$60.00
Driver:$15.00
Passenger:$25.00
Staffing:276 employees
Terminals:Toronto, Port Authority RoRo dock, southern end of the eastern gap Rochester,
Dock facilities at the mouth of the Genesee River.
LOFF Project Status:The cities of Toronto and Rochester have been working closely with
the Lake Ontario Fast Ferry Corporation as they have developed the project over the last two
years. In order to present a viable project to potential investors, LOFF has had to ensure that
both municipalities will be able to make docking space available for the ferry service.
This has been particularly important with respect to docking at Rochester. The mouth of the
Genesee River is relatively undeveloped and currently does not provide a dock wall for the
ship. In order to deal with this issue, Rochester and Monroe County are proposing to
undertake a number of improvements along the lake shore. These include the development of
park space at the mouth of the river, the provision of new road access, the construction of a
dock wall suitable for ferry docking and making land available for ferry terminal construction
and new tourism facilities.
Rochester and Monroe County have determined that the introduction of ferry service will
create significant economic development opportunities related to business and tourism
development. They have now secured $35 million in funding from various local, state and
federal sources which will allow them to proceed with their proposed infrastructure
improvements. Currently, Rochester and the County are in the process of preparing detailed
engineering drawings for the works and expect to begin construction in the near future.
Toronto already has the necessary port infrastructure to accommodate a ferry. Discussions
with LOFF have focused on the appropriate place to dock the ship and future opportunities for
developing a combined ferry and cruise terminal facility. For the first few years of operation,
LOFF is proposing to use the RoRo dock at the Toronto Port Authority located at the southern
edge of the eastern gap (see attached map). Automobiles would enter the facility via Cherry
Street. LOFF has met with the Port Authority and has secured their support for leasing the
dock facilities and the construction of interim terminal facilities. The terminal facilities would
include an outdoor parking area for cars waiting to board the ship and a terminal structure of
about 20,000 square feet, housing administrative offices, ticket and reservation services,
customs, duty free and retail shopping and food services.
Economic Development and Planning Staff have discussed this proposal and have determined
that the land use regulations will allow a ferry operation. In conjunction with the Port
Authority, we have also determined that it would be beneficial to create a separate entrance to
the dock at the bottom of Cherry Street for the ferry operation. This would minimize conflict
with the Port's normal truck traffic from its terminals. Creation of a new entrance would
involve making a number of relatively minor infrastructure improvements to the road
allowance in order to provide a new driveway, curb cuts and paving.
There is also an opportunity to improve the physical appearance and amenities at the bottom
of Cherry Street and along the entrance to the park at Cherry Beach. Cherry Street would
become a new gateway to the City once the ferry was operating. It will be important to create
a good first impression as business travelers and tourists enter the City. Staff have begun the
process of determining what could be done to improve the immediate vicinity, and as the ferry
project progresses, the Economic Development, Culture and Tourism Department will
determine the need to prepare a submission for the 2000 capital budget for the purpose of
streetscape and park land improvements along with directional signage.
The next steps with respect to the implementation of the LOFF project are dependent on the
company finalizing its financing package. They have arrangements with the ship builder, a
number of suppliers and the Australian Export Development Agency with respect to investing
in the project or providing loan guarantees. Staff understand that the company is in the process
of securing the remaining necessary investment and is working with the Toronto office of the
Dutch ABN AMRO bank with respect to financing. The bank has indicated that it would be
useful with respect to finalizing the financing of the project to formally indicate the City's
support of the LOFF proposal. Accordingly, Economic Development staff is recommending
that City Council endorse the Lake Ontario Fast Ferry Corporation's cross lake ferry project
and request City staff and the Toronto Port Authority to work closely with the company with
respect to its implementation.
LOFF has reserved a time slot for the construction of its ships with a target for beginning
service during the summer of 2000. Construction will begin once the financing is secured. It
will take about a year to complete and deliver the ships. This time frame should be adequate
for the City, in conjunction with the Port Authority and LOFF, to undertake the steps
necessary to ensure that terminal facilities and area improvements are completed prior to the
beginning of ferry service. The start of ship construction will be used as an indication that the
project is proceeding toward full implementation and will serve as the trigger point for
concentrated City involvement.
Conclusion:
A regularly scheduled fast ferry service between Toronto and Rochester represents a
significant economic development opportunity to further link two of the most dynamic
economies in the Great Lakes region. Ferry service would effectively establish a new boarder
crossing at the base of the City and would thereby increase our access to the business and
tourism markets in upper New York state and along the eastern United States. Economic
Development staff are recommending that City Council actively support the establishment of
fast ferry service and endorse the Lake Ontario Fast Ferry Corporation's cross lake ferry
project and request City staff and the Toronto Port Authority to work closely with the
company with respect to its implementation.
Contact Name:
Kyle Benham
Senior Economic Development Officer
Economic Development Division
392-1004
Bruce Graham
Director, Business Development & Retention
392-3381
Brenda Librecz
Managing Director Economic Development
392-4700
Joe Halstead
Commissioner Economic Development, Culture and Tourism
