By Richard Gaines
James S. Davis, the silent partner and largest stockholder in Cruiseport Gloucester, is silent no longer.
The long-time owner of New Balance Shoe Co., Davis this week replaced Frank Elliott, the creator and secondary stockholder of the $5 million port facility at Rowe Square, with Elliott's one-time employee, Sheree De Lorenzo, as general manager.
In October, Davis filed legal papers to take Elliott's place as resident agent of the limited liability company named Seaport Gloucester. The vehicle used by Davis, a very wealthy person from his success in growing New Balance from a tiny Boston maker of athletic shoes into a global competitor, is another limited liability company, Rare Precious Metals.
Elliott apparently will remain active as the manager of the cruise side of a business that has come to be associated with weddings, parties and events in the 6,000 square foot ballroom. The going-away party for retiring Chamber of Commerce Director Mike Costello and 200 people was held at Cruiseport last night.
Elliott frequently has made the facility available for nonprofit groups without entertainment budgets.
Elliott also contracted to provide storage and office space for Suez Energy's Neptune subsidiary, which is assembling a liquified natural gas terminal about 10 miles off the Gloucester shore.
Legally, Rare Precious Metals, which lists brokering antique autos as its purpose, is the resident agent for Cruiseport, with Davis as the resident agent for Rare Precious Metals LLC.
Davis did not return a phone call, and Anthony Feeherry, his attorney for the changes at Cruiseport, declined comment, as did Elliott.
As a general rule, according to lawyers conversant with corporate law, it is not unusual for a limited liability company to serve as agent for another limited liability company. As the name implies the structure enables officers to limit their personal liability.
The secondary limited liability company equates to a secondary level of insulation for Davis' personal wealth. New Balance has been achieving annual sales of more than $1 billion a year.
The agent of a limited liability company functions as its manager, these lawyers told the Times.
If so, then Davis in two realms, the corporate and operational, has replaced Elliott, who in 2005 convinced the City Council to allow him to convert a derelict garage with harbor frontage into a cruise ship port, a project that was initially estimated to cost $2.5 million, about half the sum invested to date.
The creation of Cruiseport encouraged optimism that the somnolent waterfront might be coming back to life. The footprint, fortunately, was just outside the state Designated Port Area, which allowed the city to authorize the restaurant-function hall just off the docks, set between heavy marine industries.
Cruiseport also provides services to the three large herring boats.
At its best, Cruiseport has proved that marine industries can coexist with activities not typically associated with the working waterfront.
A second generation on the docks, Elliott, who operates a stevedoring service for the Massachusetts Port Authority in Boston and moves in circles of shipping and cruising interests, promised to use the facility to attract cruise companies to make Gloucester a port of call.
It was a promise he has kept. In recent years, Holland America and Seabourn Cruise Line, two industry leaders, have visited, but Holland America's big ships, carrying more than 1,000 passengers, haven't been back in two years, replaced by smaller coastal cruisers.
The ground-breaking, on Nov. 10, 2005, was celebrated for the access Elliott and Cruiseport promised Gloucester in the fast-growing in-shore, small port cruising market. Elliott was the center of attention amidst local business and government leaders. Absent was his then silent partner-investor.
Elliott declined then to identify Davis, who lives in Newton and has a summer home in Bay View.
Davis' involvement, and the extent of it, was first confirmed a year ago when Cruiseport Gloucester LLC acquired the liquor license used at Bill's at 313 Main St., and filed legal papers with the Licensing Board, which was required to vet and approve the transfer.
The petition revealed that Davis owned 50 percent of the shares of the cruiseport limited liability company.
Elliott owned 39.09 percent, his wife Sharen owned 5.91 percent for a subtotal of 45. Elliott's long-time Dutch friend and adviser, Tamme C. R. Tammes owned the remaining 5 percent.
The math suggests that Elliott and Davis are in an even-steven stalemate, but the recent machinations suggest that Davis holds the upper hand.
His attorney Feeherry, a partner in the prestigious Boston firm Goodwin Proctor, appeared with De Lorenzo, whose background is restaurant and club management, to seek the Licensing Board's blessing for replacing Elliott as general manager of the facility which includes a restaurant and bar.
A corporate litigation expert with a hand in numerous high-profile and precedent-setting cases, Feeherry needed to say little more than his name and that of his client, "Mr. Davis," and that Elliott "is no longer involved" to convince the Licensing Board, meeting in the basement of Sawyer Free Library, to give the switch in management to De Lorenzo its routine approval.
She had been at Danversport Yacht Club, which competes with Cruiseport for event contracts, before Elliott hired her last year.
Under Elliott's management, operations since the grand opening on Memorial Day weekend 2007 have been less than idyllic. Elliott brought in De Lorenzo just before the opening to manage the events side of Cruiseport and then canned Peter and Vicki Van Ness, the husband-and-wife team he hired to promote the facility and manage its construction.
The change had a wrenching effect so soon after the successful launch which featured a sit-down dinner for VIPs and announced shared proceeds with seArts and the Schooner Adventure.
Elliott's management also included the brief experiment of featuring Capt. Vito's Seafood before that arrangement soured and Vito Ciaramitaro and Elliott parted ways.
Contractors also complained about doing business with Elliott.
City Council held hearings earlier this year, spurred by suggestions that Elliott was ignoring the precise requirements of the special permit for Cruiseport; it was claimed he was operating the restaurant downstairs in space set aside for customs and Homeland Security offices.
Citing his and others' unsatisfactory business relations with Elliott, Peter Van Ness unsuccessfully urged the Licensing Board last November to withhold approval of the license transfer.
In part to satisfy City Council, Cruiseport this spring began an expansion to create storage space for the LNG people and more restaurant space.
Work on the project, estimated in the building permits to cost less than $700,000, has been suspended.
De Lorenzo declined to answer questions.
Richard Gaines may be contacted at rgaines@gloucestertimes.com.
