GloucesterTimes.com, Gloucester, MA

March 6, 2013

Cape Pond Ice real estate on the block

By Richard Gaines
Staff Writer

---- — Gloucester’s fishing schooners used about 40,000 tons of ice a year in 1876, and when father and son Dick and Scott Memhard acquired Cape Pond Ice Co. more than a century later in 1983, the boats were still using about the same amount.

But now, with the industry in free fall, the company’s fish ice sales have fallen by 90 percent, to 4,000 tons a year. And with far worse times around the corner assured by federal regulators, the Memhards have put the business up for sale.

Scott Memhard cited the decision by NOAA against allowing the industry a second year of relief via interim catch levels as forcing his hand. The first year of interim limits held the reduction in Gulf of Maine cod to only 22 percent but without the same for the 2013 fishing year beginning May 1, landings will be compressed by 77 percent. And with $1 million in debt coming due, Memhard said he has little choice.

Memhard said the asking price is $2 million for the property — a three-story, steel-framed building of 35,000 square feet, on a 34,848-square-foot parcel at the inside corner of the Fort. With 180 feet of boat dockage at Harbor Cove, the site has long been a convenient stop for boats to ice up before heading out.

“The building has great bones, it was built above code in 1947,” he said Tuesday, noting that’s when Gloucester was the world’s pre-eminent fishing port, and had been for about 100 years. “It (the sale) has got to happen quickly; my challenge is to pay my bills.”

Those include $1 million to the U.S. Commerce Department, according to a synopsis of his dire circumstances outlined in a meeting with Sen. Elizabeth Warren and about two dozen representatives of the fishing industry two weeks ago.

Memhard foresaw the decline in the need for fish ice, which was his primary business, and diversified aggressively — aided greatly by the movie, “The Perfect Storm,” which introduced a global mass audience to “the coolest guys around” and offered the Memhards an opening to a lucrative T-shirt and gear market. “Bugsy” Moran, portrayed by the actor John Hawkes, wears a Cape Pond Ice T-shirt throughout the film depicting the ill-fated final trip of the Andrea Gail.

The company also began capitalizing on its reputation for producing the highest quality ice, as the Boston bar scene sought niche advantages. “Drink,” celebrity chef Barbara Lynch’s restaurant on Boston’s Fort Point Channel, let the world know the ice in its cocktails was made by Cape Pond Ice and helped give the enterprise cache.

But the fundamentals of running a fish ice business at a time that fishing was undergoing government driven consolidation — the stated policy of the Obama administration was to see a the removal of “sizable fraction of the fleet” — were stacked against Cape Pond’s holding on. If the decline in the demand for fish ice wasn’t bad enough, Scott Memhard said cost became an enormous competitive weight.

The cost of water in Gloucester is 730 percent more than the cost of water in New Bedford, the co-capital of what’s left of the fishing industry, a differential that traces to the recent capital expenses in replacing a century old system of pipes and valves.

”It’s been death by 1,000 cuts,” Memhard said. “We’ve lost most of our inshore fleet (the ‘mosquito’ fleet, he likes to call it) and each of the boats was good for half a ton of ice a day.” We used to run two block tanks, now we’re down to one.”

Memhard also said the non-fish ice, stand-alone business was solid — he has two satellite facilities in Lawrence and Peabody — and he hoped to keep it so that people could continue to buy Cape Pond Ice from liquor stores and freezers in variety stores and supermarkets.and continue to buy and wear the gear made world famous by its placement in “The Perfect Storm.”

”There’s got to be a bright light here,” he said. “The real estate is pulling us down.”

Memhard said he would be interested in becoming a tenant on his current Gloucester property, and said it could easily be converted into a part of the campus for Endicott College which has established a satellite campus to its main campus in Beverly Farms, or perhaps serve as an adjunct restaurant or event venue in the stable of locations being developed by Cruiseport Gloucester’s Sheree DeLorenzo and New Balance owner Jim Davis.

Indeed, the continuation of the fish ice service would ensure the new owner meets the state requirement for marine industrial use that is required of property in the designated port area of the harbor.

DeLorenzo and Davis already operate Cruiseport Gloucester on the Inner Harbor across the channel from the Jodrey State Fish Pier and are in permitting for a 101-room hotel on Commercial Street, not a quarter mile from Cape Pond Ice.

”We’ve reinvented the company two or three times,” Memhard said, underscoring a readiness to do it again — this time without the core mission of serving a fishing fleet that, on the surface, is melting away.

Richard Gaines can be reached at 978-283-7000, x3464, or at rgaines@gloucestertimes.com.