Tall ship sinking in red ink

The Oliver Hazard Perry launched in 2015, one of the largest full-sailed educational and training ships in the country, and the first built in a century.

The impressive size turned out to be a detriment.

The nonprofit that owns and operates the Newport-based ship announced recently that the vessel was suspending operations. One of its leaders attributed the marketing problems to the size and operating expense of the vessel.

The 200-foot tall ship, operated by the nonprofit Oliver Hazard Perry Rhode Island, required 17 crew members under U.S. Coast Guard rules.

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Each one-week excursion at sea cost $50,000, said Avery “Whip” Seaman, the nonprofit’s treasurer and a member of its executive board.

“This is a very large ship compared to its older competitors and more expensive to run,” he said. “We have to charge more for a bunk in the boat than some of our other competitors do. And that seemed to be an issue. We couldn’t really get the number we needed, so we started discounting.”

By comparison, other education-at-sea competitors could operate with fewer crew and at less cost.

By 2016, the Newport ship was operating in the red. Its most recent tax filing, for that year, indicates it ended 2016 with a loss of $961,415.

The prior year it had posted a profit of $3.4 million, according to its Form 990 filed with the IRS and posted on the nonprofit site GuideStar. Primarily due to a precipitous drop in contributions and grants, total revenue fell 77 percent in 2016, to $1.1 million.

The primary market – educational organizations and schools – had difficulty paying full price for the excursions at sea.

Seaman, who became treasurer of the organization about four months ago, said it was apparent when he came on board that the business was not sustainable.

Although described as a “pause” in operation in the announcement, most of the staff and crew were laid off.

Built after a seven-year process, the Oliver Hazard Perry engaged Bryant University to develop a marketing plan, Seaman said, adding, “We just weren’t able to execute it.”

Now, all options are being considered, including a sale or a rebooting for tourism or event purposes.

The vessel, valued at $12 million, has a mortgage of nearly $4 million, Seaman said.

The state put $5 million into building a dock for the tall ship at Fort Adams State Park in Newport. The R.I. Department of Environmental Management has told Seaman it hopes the vessel will stay, because it serves as an attraction.

But the ship can be sold, or moved, without state approval, Seaman said.

The nonprofit has asked Rhode Island’s congressional delegation to submit legislation that would allow the Oliver Hazard Perry to be “nationalized,” which would free it up to sail between international ports.

“Nothing is out of the realm of ideas at the moment,” Seaman said.

Mary MacDonald is a staff writer for the PBN. Contact her at Macdonald@PBN.com.