January 22, 2018 / 12:04 PM / in 5 months

Ferry service helps Alcatraz escape from government shutdown

NEW YORK (Reuters) - The lights are on at Alacatraz Island, the famous federal prison turned tourist destination in San Francisco Bay, even though the U.S. government has shut down. Private business is stepping up.

FILE PHOTO: The Alcatraz Island is seen in San Francisco Bay in San Francisco, California, U.S., October 5, 2017. REUTERS/Stephen Lam

Tour boat operator Hornblower Cruises & Events is subsidizing Golden Gate National Recreational Area, a park to which the Alcatraz Island belongs, to the tune of $48,000 for security personnel and utilities at Alcatraz over the next few days.

It is one example of the risks some businesses that rely on the federal government must take to keep operations going.

“We are essentially funding the park,” Terry MacRae, chairman and chief executive officer of Hornblower Inc, said in a phone interview on Sunday.

The park service did not respond immediately to a request for comment.

An acrimonious split over the issue of immigration between Democrats and U.S. President Donald Trump led the Democrats to refuse to support another short-term government funding extension last week.

Funding for federal agencies ran out at midnight on Friday and the shutdown will enter a third day on Monday after Senate negotiators failed to make a deal late on Sunday.

Although economists and investors alike are confident the shut down will barely dent the U.S. economy, business owners such as MacRae say the impact is all too real - and painful.

Hornblower, which also runs a ferry service to and from New York’s Statue of Liberty, another famous tourist destination that is a symbol of the American democracy, employs between 400 and 450 workers for its Alcatraz Cruises and Statue Cruises, MacRae said.

“It’s a struggle for us to maintain those jobs if we don’t have the park open,” he said.

The Statue of Liberty was closed at the weekend but will reopen on Monday, funded by the New York state government, although MacRae said some damage had already been done.

“Even when you throw the switch and tell people you are back up operating, they’ve already changed their plans. So the visitation will be reduced. And people have asked for refunds,” he said.

Opening hours at Alcatraz will be reduced and MacRae predicted that daily traffic would fall to between 5,000 and 5,500, from the usual 6,000 to 7,000.

In 2013, when the U.S. government was last shut down due to another stalemate, California-based Hornblower incurred losses of between $500,000 and $1 million and put between 30 and 50 of its employees on furlough, MacRae said.

This time, thanks to better cooperation between the company and National Park Service, the government body that oversees the park, losses should be capped at $500,000, assuming the San Francisco park resumes full operations in the next few days.

The ferry service will have to furlough workers if the shutdown continues for a week or more. It has insurance for such events but it doesn’t kick in unless a shutdown lasts 30 days.

“It’s silly that grown adults that we send to Washington to represent us can’t figure out how to get together and avoid this,” MacRae said. “If this isn’t resolved within a few days, this would escalate dramatically.”

Reporting by Koh Gui Qing; Editing by Peter Henderson and Paul Tait

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