‘On the waterfront’

A reader, no doubt an angry local boat owner, recently sent me an anonymous e-mail. The reader wrote, in part, to point out that MRC President Anthony Pellegrino, “who just happens to be a direct competitor of Island Cruise Lines, has a monopoly on the waterfront.”

The local government, he (or she) maintained, should explain “why a direct competitor is allowed to be installed into a position of judge, jury and executioner of the boat owners.” Although the anonymous e-mailer clearly indulges in a bit of hyperbole, he still raises a very valid point.

Why didn’t the local government award the Smiley Cove lease to a disinterested third party? Mr. Pellegrino, who runs a tourism-related boating business, clearly has a direct conflict of interest.

This is very much akin to allowing Continental Airlines to lease and run the Saipan International Airport. Imagine the outcry that would result if Continental Airlines then gained the right to charge its competitors (Northwest and Japan Airlines, for example) anything it wanted in the way of airport landing fees. Surely a federal anti-trust lawsuit would ensue, and tourism would suffer gravely.

Anthony Pellegrino, of course, would probably argue that this is all beside the point. After all, he claims to be losing heaps of money–and, indeed, to be on the verge of bankruptcy. I fail to see why.

The Marine Revitalization Corporation is a corporation, after all, which means it has limited liability. Pellegrino’s personal assets should be shielded by the MRC’s corporate status.

Besides, a seasoned and highly successful businessman like Mr. Pellegrino surely ought to know the merits of investment diversification by now. He should have known better than to put all of his golden eggs into one basket. He should have done his market feasibility studies. He should have prepared detailed business plans. He should have anticipated various economic and political contingencies.

Now he claims that the local government gave him the shaft–that he and the local government were “partners” all along. This is a pretty strange proposition, to be sure.

All along, I thought it was a straightforward waterfront lease. Imagine a private developer leasing public land, failing to make a profit, and then complaining that the local government “betrayed” its original “partnership agreement.”

Well, all I can say is: If the local government really “betrayed” Mr. Pellegrino, let him sue the local government to enforce the peculiar “partnership” contract. We cannot afford to keep stranding Managaha-bound tourists.