Clipper sailing a new course

The Baltimore Sun

On some days, John Kircher counted $3,000 in sales.

But the expenses of running a 160-foot sailboat out of Baltimore's harbor - with the $9,500 monthly mortgage, the $18,000 weekly payroll, the $26,000 in insurance, the $600 liquor deliveries - became too costly over the years.

The first year in business, he said he lost about $220,000. Next, it was about $30,000 - a definite improvement, but still a loss. This year, he said, business was on track for a turnaround.

But Kircher, owner of Clipper City Tall Ship LLC, was already too far in debt. He missed three consecutive payments this year on his nearly $800,000 boat mortgage, and Regal Bank demanded its money.

The Clipper City, the 22-year-old vessel that for years was the setting of countless celebrations while sailing along the easy waters of the Patapsco River, has been placed in foreclosure and is due to be sold at public auction today.

"One big mistake was clearly borrowing too much," Kircher, 59, said in a phone interview last week. "There were probably alternatives to borrowing. I should have done that, instead of trying very aggressively to grow the business. My approach was to spend ... not to cheap out. ... I don't think it was naive. What I thought could be done in one year took three years, and I ran out of money."

Regal Bancorp Inc., based in Owings Mills, filed suit in federal court, and U.S. marshals seized the boat in May. The boat, its white paint a bit shabby and with spots of rust showing through, is docked at the Light Street Pavilion. The auction is set to begin at 10 a.m. at 803 Light St.

Kircher, of Fells Point, filed for Chapter 11 bankruptcy after the seizure, hoping to keep his business operating while trying to work through his financial difficulties. This year, he said, he was poised to turn a profit for the first time since he bought the boat in 2004. But his debt - more than $1 million - proved too heavy a burden.

"I'm more than sad," Kircher said. "You don't do this just for a job. It's just a huge loss. It goes way beyond economics, which is pretty devastating for my wife and me. We came so close and just didn't make it."

Already, a handful of people have expressed interest in buying the schooner.

J. Stephen Simms, a Baltimore-based maritime bankruptcy attorney who is representing the bank, said the company hopes to recoup its losses with the auction.

"Regal Bank is in the business of banking, not in the business of boat operating," Simms said. "For the sake of Baltimore and the tourist industry, and the heritage of clipper ships, Regal hopes that someone comes in and keeps the boat here and operates it with a profit. Anyone would. It's a beautiful boat. It does have the opportunity to make some money for someone who operates it well."

Simms said his firm works on about a dozen boat mortgage bankruptcies across the country every month - an indication of the difficulties of the passenger boat industry.

"It's difficult to run one of these boats at a profit," Simms said. "You really have to have a whole program of operational skills and marketing skills, good success with weather, a place where the boat is accessible, a whole package. Sometimes, all the package doesn't come together. But when it comes together, a person can be quite successful.

Commissioned in 1984, the boat - named to honor the Baltimore clippers that ran cargo during the War of 1812 - was completed a year later in Green Springs Cove, Fla., and cost $2.5 million. A Harford County restaurateur bought the schooner and operated it at the Inner Harbor for 18 years, Kircher said. In 2003, the year before Kircher bought the ship, the operation grossed about $400,000 - but lost more than $200,000.

Aboard the boat, people married, got reacquainted with old schoolmates at class reunions. Its last event was a birthday party for a 5-year-old girl.

"People would send me letters in the mail afterward," Kircher said. "'I just wanted to let you know how good it was.' It happened all the time. It was a very powerful business, a very wonderful attraction. Nobody had to go sailing on Clipper City, but virtually everyone who did really liked it."

Kircher's love of boating came from his father, who was elected commodore of the Yokohama Yacht Club in Japan and bought a 19-foot-sailboat. His father bought it, as "sort of a political move," said Kircher, who later inherited it. "To me, it was a wonderful toy," he said.

Kircher said he'd be willing to help guide the Clipper City's next owner. For now, he's looking for work.

"I'm a realist," Kircher said. "It's not mine anymore. It's gone. But to the extent that the business could be a success, I'd feel good about that, instead of the whole thing fading away and being just a Baltimore memory."

nicole.fuller@baltsun.com

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