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NYC Ferry Starts Churning Through Taxpayer Dollars

De Blasio gave $23 million in aid to keep the ailing boat network afloat before leaving office last year, as expansion plans cruise ahead.

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An NYC Ferry travels down the East River near Roosevelt Island, April, 24, 2019.

Ben Fractenberg/THE CITY

A $2.75 ride on NYC Ferry is getting expensive for taxpayers.

Meeting records from the city Economic Development Corporation show its board approved up to $62 million in new spending last month to float the boat network’s operation — for the first time including city tax dollars.

Former Mayor Bill de Blasio’s budget office supplied a $23.2 million infusion before he left City Hall at the end of last year, according to EDC, aid that has not previously been reported.

Previously, EDC itself funded the ferry, which is run by the private company Hornblower Cruises. The corporation calculates the subsidy for the year ending June 30 at $8.59 per passenger per trip. 

EDC has already diverted proceeds from its Times Square real estate holdings to help pay for the costly maritime transit system, which de Blasio launched in 2017. The nonprofit EDC promotes jobs and development, and its facilities range from the Brooklyn Army Terminal to the Hunt Point wholesale food market.

The latest operating agreement between NYCEDC and San Francisco-based Hornblower Cruises was approved in a Dec. 14, 2021 executive committee meeting in connection with a five-month extension of the original 2016 operating agreement, which had been set to expire on April 30, 2023.

A similar amendment a year ago already added $64 million in ferry subsidies funded by EDC, plugging budget holes after ridership collapsed during pandemic shutdowns.

Service expanded this week to include year-round rides to Governors Island and last month extended service to Throgs Neck in The Bronx, on a route extension that also includes Ferry Point. A new route between Staten Island and Manhattan’s West Side launched last August, while a long-demanded stop in Coney Island is still in the works.

The new board authorization still allows EDC to plow its own money into propping up ferry service but also permits “City Tax Levy funds,” the board records show. 

EDC declined to comment. A spokesperson for Mayor Eric Adams did not respond to a request for comment.

‘Really Expensive’

The nonprofit Citizens Budget Commission monitors city spending on NYC Ferry. It has urged reining in costly route extensions and charging a higher fare on weekends and to non-commuters.

“It’s really expensive to operate, it requires pretty significant subsidies, and this doesn’t really fix that problem,” said Sean Campion, a senior research associate for the budget watchdog group who has studied the ferries and their subsidies. 

Of the possible addition of city funds to the pool, Campion said: “Instead of pursuing options to make it more financially sustainable like increasing fare or cutting service on lower ridership routes, this sort of shifts the problem.”

In a June 2020 blog post, Campion documented how the ferry was devouring dollars EDC generated from its real estate holdings. That money historically went into the city treasury.

The pre-COVID annual operating budget for the ferry service was $69.6 million, according to Campion. For the fiscal year that ended in June, it was $32.5 million, according to EDC.

A spokeswoman for Comptroller Brad Lander said he plans to review NYC Ferry service with budget experts in his office, but declined to comment for this story. His predecessor, Scott Stringer, was a vocal critic of city ferry spending, which included as much as $369 million to buy a fleet of boats from Hornblower.

A Wall Street-bound ferry arrives at the South Williamsburg terminal, Sept. 25, 2020.

Hiram Alejandro Durán/THE CITY

Reacting to THE CITY’s coverage of the boat purchase, Stringer at the time called for the city Department of Transportation — which runs the free Staten Island Ferry — to take charge of NYC Ferry. Stringer also tried and failed to stop the purchase.

The EDC board’s five-month extension of the current operating agreement — through Sept. 30, 2023 — buys more time for the Adams administration to negotiate a new contract to operate the ferry system’s seven lines.

“Since the launch of the ferry service, the city has chosen to increase the number and size of vessels operated, increase the frequency of service, and add new routes serving additional parts of the city,” EDC’s proposed resolution to boost spending says.

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