City’s steep dock fees will benefit Riverwalk

May 4, 2013 – The U.S. Department of Transportation will not be the only source of money to finish the Chicago Riverwalk. Two tour boat operators – who saw their dock fees on the Chicago River sharply spike this year – are helping indirectly.

On March 13, the city council approved ten-year license agreements with Mercury Skyline Yacht Charters, Inc. and Wendella Sightseeing Company, Inc. that will charge fixed amounts that increase by three percent each year – plus five percent of each company’s gross revenue.

The increases from last year are significant. Mercury will be paying more than seven times what it paid last year – from an estimated $169,000 to $1.2 million. Wendella got off easy with just a 167 percent increase, from about $300,000 per year to $800,000.

Wendella president Michael Borgstrom suspects someone new on the Chicago River bid on use of the city’s docks, which drove the price up.

Twice in the past 20 years, the city has requested proposals from his company, which has been operating on the Chicago River since 1935. Currently, Wendella and Mercury are the only companies that pay the city for use of its docks. Borgstrom finds it “disconcerting” that dock use could go to someone with “deeper pockets.”

“My argument is always, ‘why would you want someone from the outside here? If you want more money, just ask me. I’ll give you more money.’ And we did. But they still put it up for RFP.”

At one time, according to Borgstrom, Wendella paid $10,000 per year to City of Chicago.

(Left) Borgstrom in 2010 at a news conference with U.S. Representative Debbie Halvorson.

The current license agreement, he says, took about two months to work out with the Chicago Department of Transportation. “It was a long process. They had a minimum they were looking for and we basically met those minimums and they were satisfied with that.”

Owners of the two boat companies do not have to look far to see what their dock fees are buying. According to Borgstrom, the city has directed them to send their money to a trust that was set up to help pay for construction of the Chicago Riverwalk.

“We can see where the money is going, at least.”

It is an expensive business, requiring says Borgstrom, “a huge, huge capital investment.” A custom-built boat like the Lila costs nearly $3 million. To get boats ready over the winter for a season that unofficially started on March 16, the day the river was dyed green, cost $2 million. Whenever improvements are made to their docks, such as upgrades in April 2012 to the dock near Trump International Hotel & Tower, Wendella pays for it.

While the dock fees are steep, Borgstrom disputes a claim by the city in March that it will earn more than $42 million off Wendella and Mercury over the next ten years. He says the deals work out to be less than the $30.9 million the city claims Mercury will pay and the $11.5 million it figures Wendella will pay.

A spokesperson for Mercury declined to comment on the dock fees. Anita Pedersen, director of public relations for Mercury, also into its 78th year on the Chicago River, says “we are busy gearing up for another successful tourism season in Chicago and do not plan to comment on other issues.”

In March it was announced that the City of Chicago has been invited to apply for a $100 million loan from the U.S. Department of Transportation to extend the Riverwalk past State Street and all the way to Lake Street.