Attorneys for both Mackinac Island and the ferry companies in the region say a recent bill granting the island authority over ferry services will not affect an ongoing legal battle regarding a contract between the two parties.
However, both stated that any new contract would be affected by the bill if it is signed into law.
Recently, state lawmakers passed Senate Bill 304, which would give the island city authority to regulate all aspects of ferry services, including ticket rates and parking fees. The bill awaits Gov. Gretchen Whitmer’s signature. Because the bill would amend the island’s city charter, it could only take effect if the island’s voters approve it.
An attorney for the ferry companies said the ongoing federal court case is only about the 2012 franchise agreement with the island.
“What the federal court is looking at is what our contract says during its current term, and I think even the city would agree that whatever that determination is controls through June 30, 2027,” said Mark Magyar, attorney for Shepler’s Inc. and Arnold Transit Co., which are owned by the Florida-based Hoffman Marine.
“After that agreement, which is the only thing the federal courts are really charged right now to look at, has expired … then this new bill would take effect.”
In March, a federal appeals court upheld the island’s authority over ferry ticket rates and other services, such as luggage handling, while the case with the ferry companies continued. The appellate court, however, upheld a lower court’s injunction saying the island has no authority over parking services in Mackinaw City and St. Ignace.
The bill would change that.
“(US District Judge Robert Jonker) has made it clear that he believes that there should be a move toward negotiation of a new franchise agreement, which would go into effect after the current contract expires in June 2027,” Erin Evashevski, attorney for Mackinac Island, said in an email to Bridge Michigan.
“In that manner, Bill 304 impacts the case because it provides clear clarification that the scope of the City's regulatory authority over ferry services includes parking rates.”
Hoffman has threatened to cease ferry operations if a new contract with the city isn’t agreed upon.
Meanwhile, the island's potential authority over parking rates has raised concerns on the mainland.
“We should have a say in what the parking prices are here in Mackinaw City because the parking is here in Mackinaw City,” said Dean Martin, village manager of Mackinaw City. “If there's gonna be discussions of ferry rates, that should involve us because the ferries are here in Mackinaw City … those ferry prices impact the businesses here.”
The franchise agreement between Hoffman and the island states that the city can regulate ferry fares when there is no ferry competition. With Hoffman being the sole owner of the region's ferry services since 2024, the city opposed the company’s $2 fare hike.
The company raised rates anyway — currently, Shelper’s charges $39 for a roundtrip ticket for an adult, while Arnold charges $37 — and sued the city.
Jonker has ruled twice that the city has offered insufficient evidence to prove the company violated antitrust laws.
“There are no current antitrust claims proceeding in any court,” Magyar said. “They have lost on that twice because, as the courts have found, we are not making a barrier to entry. We have non-exclusive licenses. If this were such a big, profitable endeavor, any company that wants to come with their ferry could apply for a license.”
Evashevski said the city can still appeal that ruling, but the court must first settle whether Hoffman breached its contract with the city.
She said the city is not looking to stop the companies from turning a profit, but is looking to create a service that benefits all parties and visitors traveling to the mostly state-owned island.
“They should be able to make money in this endeavor,” she said. “It's just a matter of making sure that the rates are fair, that the island is accessible, and that the rate is fair on return.”
The case's discovery phase ends on June 30. If an extension or agreement isn’t filed, the two parties will submit a motion to the judge for a ruling.
