Lake Superior island town reaches tentative $17M deal to buy Madeline Island Ferry Line assets

A Lake Superior Island town has reached a tentative $17 million deal to purchase the assets of the Madeline Island Ferry Line that connects residents to the mainland in northern Wisconsin.

The La Pointe Town Board voted unanimously to authorize the town’s harbor commission to move ahead with the purchase. The commission and ferry line reached a non-binding agreement to transfer ownership to Madeline Island residents, according to the town. The two parties hope to close on the sale by the end of the year.

The Madeline Island Ferry Line has five boats that make nearly 6,000 crossings each year to bring people to Madeline Island from the mainland in Bayfield. The island is a popular tourist destination that draws thousands of visitors during the summer, boosting La Pointe’s year-round population of 430 residents. Town officials estimated more than 100,000 people use the ferry line each year.

Michael Childers, president of the commission, said the agreement is an important step toward maintaining a sustainable and vibrant community on Madeline Island.

“The ferry line is our highway. We have to have the ferry line to get back and forth to the mainland, for the kids to go to school, and for the emergency service vehicles to take people to health care, and for all of our supplies, building materials (and) groceries,” Childers said. “The town was not looking favorably on the idea that someone else would come in and buy the line, and we’d lose the opportunity to control that highway.”

The Russell and Nelson families currently own the ferry line. One of the owners, Arnie Nelson, was not immediately available for comment. Robin Trinko Russell, the ferry line’s vice president of financial and shore operations, said in a statement that the service is key to the welfare of the island community and Bayfield on the mainland.

“It is gratifying that the Island community, through the newly created Harbor Commission, will continue to chart the path that best serves year-rounders, seasonal residents, local businesses, commuters and our many visitors,” Russell said.

Childers said the current owners will operate the ferry line on the commission’s behalf for the next year with the potential for extending that arrangement. La Pointe’s harbor commission plans to purchase the ferry line’s assets by securing revenue and general obligation bonds, which are a form of long-term borrowing used by state and local governments to finance projects.

The bonds would be paid off over time from the ferry line’s profits. Childers said the deal would also likely need to be supplemented by an increase in the town’s tax levy. Glenn Carlson, chair of the town board, said the line’s profits are expected to cover up to 85 percent of the purchase.

Carlson estimated the town’s taxpayers may need to pay roughly $300,000 each year over the next two decades. He said that works out to a roughly $100 increase for a $100,000 property. He said some portion of the debt repayment may be included in people’s taxes next year.

“Essentially, the townspeople — from an investment over a 20-year period of $6 million — will then own the ferry line in perpetuity,” Carlson said. “And once the bonds are paid off, the profits of the ferry line can then be used to increase service, increase the number of later (runs) or earlier (runs), (and) hopefully hold down fares.”

Cameron Adair and his family moved to Madeline Island two years ago from the Twin Cities, after the COVID-19 pandemic allowed millions more Americans to work from home. Adair said island residents are already taxed heavily, saying it feels as if Madeline Island is the “breadwinner” for Ashland County. The town of La Pointe contributes about 20 percent of the county’s overall tax levy. Even so, Adair said he feels any tax increase related to the ferry line’s purchase would support the community.

“I think it’s a worthwhile investment to the future of island residents and property owners,” Adair said.

Adair and his wife Jaclyn have two kids who are 6 and 8 years old. He said their lives largely revolve around the ferry and access to the mainland.

“Working families like us that are on a budget, you’re constantly planning each and every trip at least in our household,” Adair said. “If you have a doctor’s appointment, you’re like how many other things should we or do we want to accomplish on a trip to justify the expense.”

For most adults, a round-trip ferry ride costs $17. For those taking vehicles across, a round trip may cost as much as $46.50.

Town officials and residents say they’d like to see the ferry line operate later in the day for students on the island who attend the Bayfield School District. They noted some kids are currently unable to participate in extracurricular activities due to the current schedule. Adair said it would also be beneficial for tourists and visitors who come up late on a Friday to spend the weekend there.

He said the town’s purchase of the ferry gives residents a sense of security. Carlson agreed, adding the town’s revised comprehensive plan listed affordable and reliable access to and from the island as the top priority for residents.

“This gives them that kind of security that you know the ferry service is going to be as robust going forward as it has been, and maybe even more so,” Carlson said.

Town officials are also examining state and federal transportation programs that may provide funding for the service after it was unsuccessful in securing an $11 million federal grant earlier this year.

Carlson said the town plans to hold a special meeting to approve the purchase of the ferry line’s assets. A date for that meeting has not yet been set, but he expects it will be held some time in the next month.