Bartlett Dunbar has big plans for the steel hull that sits in the shipyard at Promet Marine Service Corp. in Providence, and he’s looking for the state to give him a helping hand.
Dunbar, a prominent Newport businessman, is attempting to transform that hull into a 200-foot-long, three-masted tall ship based in Rhode Island that will carry crews of tuition-paying students to Bermuda and the Caribbean, or take people on day trips on Narragansett Bay.
The price tag for the project: about $6 million.
The ship already has a name, the Oliver Hazard Perry, and the nonprofit that Dunbar is leading says it has raised more than $1 million in donations and pledges to get the venture off the ground.
But a legislative move to make Oliver Hazard Perry Rhode Island Inc. eligible to receive a $1.7 million loan guarantee from the state has some raising objections similar to those voiced last year when the R.I. Economic Development Corporation approved a much bigger guarantee for Curt Schilling’s video game company, 38 Studios.
Some lawmakers and a local lender question whether it’s worth the gamble, with the state backing a loan for a ship that will leave Rhode Island waters frequently and will have a limited resale value if the nonprofit fails.
“This is a startup with so much risk, it’s not even funny,” said Henry A. “Bud” Violet, president of Ocean State Business Development Authority, a private, nonprofit alternative lender. “There isn’t a bank in the world that would do this transaction without a guarantee.”
Indeed, last year the project’s supporters came before the Industrial-Recreational Building Authority, an EDC-affiliated agency, carrying a loan agreement with BankNewport that said the bank would provide $1.7 million in financing, if the loan was guaranteed through IRBA’s insurance program that covers up to 75 percent of tourism-related, recreation projects.
But the nonprofit was turned away because IRBA’s statutes required eligible projects to be “land based.”
That’s what led Dunbar – who owns the popular waterfront retail center Bowen’s Wharf in Newport – to appeal to Aquidneck Island’s General Assembly delegation, which includes Senate President M. Teresa Paiva Weed.