Insurance costs ground balloon at Port Discovery

Operator hopes state will allow attraction to reduce its coverage

May 11, 2002|By Scott Calvert | Scott Calvert,SUN STAFF

By now, the HiFlyer tourist balloon already should have given thousands of customers a lofty view of downtown. Instead, city officials are still working with the state to get it off the ground.

"We'd like to get the balloon back up in operation," said Deputy Mayor Laurie B. Schwartz. "We're working through the issues."

After a difficult first year that included bad weather, post-Sept. 11 fallout and other woes, the balloon operator faces a bigger hurdle: exorbitant insurance costs.

Premium costs have more than doubled since last year, from $150,000 to $366,000, part of an industrywide trend. That is unaffordable, said Lee Raskin, who spent years developing the attraction next to the Port Discovery children's museum. He had hoped to resume the rides in early April.

Raskin hopes to reduce the insurance coverage - and, therefore, the premium - but that requires government approval.

While the balloon is privately run, it sits on city-owned land at Baltimore and President streets. The site is over the Maryland Transit Administration's Shot Tower subway station and next to a station entrance.

Under a lease between the city and Port Discovery, MTA was allowed to demand that the balloon operator - Sky High of Maryland LLC - carry $30 million in insurance. That amount of coverage now costs $366,000.

The state agency must sign off on a reduction in coverage, which it has not yet done.

"Everybody is waiting on the MTA," said Rick Jarry, the city's risk management officer. "We can probably get to an agreement. Just getting everybody there takes a little time and effort."

Asked if a lower coverage level would be acceptable, MTA spokesman Frank Fulton said, "If they propose something other than what we agreed on, we have to discuss that."

Raskin has suggested coverage of $7 million, which is in line with similar balloon operations in other cities.

The premium would cost a more manageable $200,000 a year, he said. To make state transit officials more comfortable, he is willing to reduce the maximum passenger load from 30 to 20.

Raskin boasts of a perfect safety record. Last year, 19,000 riders floated above the city, tethered to a cable.

"Last year we didn't as much administer a Band-Aid to any of our passengers," he said.

Under state law, the balloon is considered an amusement and must be insured for only $350,000. But Jarry said that would be far too low. He said the proper figure - possibly $7 million - should be high enough to cover any claims stemming from a malfunction.

The balloon's debut was delayed in July by the train wreck and fire in the Howard Street Tunnel.

After Sept. 11, the balloon was grounded for about 10 days. Crowds were down significantly when rides resumed.

Port Discovery, which sells ride tickets and does joint marketing with Sky High, considers the balloon an aerial billboard. The museum's name is emblazoned on the side.

"We're hopeful it draws people," said Alan M. Leberknight, Port Discovery's president. "From the museum's standpoint, we would love to see more people drawn downtown and while they're there, say, `Gee, let's go to the children's museum.' "

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