November 14th, 2013 | by AARON MESH News | Posted In: City Hall, Transportation, Business

Alta Bike Share's Canadian Partner is "Imminently Insolvent"

news3_(bikeshare_timbers)_3941BRANDED: City transportation and Alta Bike Share officials have pitched sponsorship to dozens of companies, including Nike, Burgerville, New Seasons and the Portland Timbers—to whom they showed this mock-up of a sponsored bicycle. - IMAGE: Portland Bike Share

Wondering why Portland Bike Share still hasn't announced a launch date? Blame Canada.

As local vendor Alta Bike Share struggles to find private sponsors to launch the city's bike-sharing program next year, the Portland Bureau of Transportation is mulling a plan to loan as much as $4.6 million in operating costs to Alta.

But a report out of Vancouver, B.C. says that city is rethinking its $6 million grant to Alta to start its bike-share system—because the company's Canadian equipment supplier, Bixi, is "imminently insolvent."

Bixi is a subsidiary of the City of Montreal. The company supplies the bicycles and racks that Alta, a Portland company, manages in eight cities.

Vancouver newspaper The Province says the city council is balking because of memos from officials in Montreal and Toronto. The memos, which have been widely reported, show both cities—which both fronted the money for bike-share programs—are worried Bixi is on the verge of collapse.

The memo says Toronto taxpayers are on the hook for $3.7 million owed on a $4.5-million startup loan, which council guaranteed. According to the document, Toronto is considering raising $5 million to cover taxpayers and take over Bixi’s assets, by forgoing construction of 11 public toilets in a city works contract.

“Bixi has advised the city of their financial difficulties and is insolvent or imminently insolvent due (to) the fact that revenues generated by the system have not been sufficient to cover costs,” the Oct. 15 memo states. The memo explains that PBSC is in danger, according to Montreal’s auditor general.

“I discovered enough convincing evidence to cast serious doubts on the capacity of PBSC and Bixi Toronto to continue their operations,” Auditor General Jacques Bergeron informed Montreal city council, in a letter dated Sept. 11.

PBOT officials have repeatedly stated the search for private sponsors for Portland Bike Share is going well, but haven't announced any of them, or offered a Portland launch date. Documents suggest health insurer Kaiser Permanente could supply much of the sponsorship money to launch the system.

Alta Bike Share vice president Mia Birk could not immediately be reached for comment. She told The Atlantic last month that Bixi's travails would not affect Alta.

UPDATE, 2:20 pm: Birk tells WW via email that Alta Bike Share won't change equipment suppliers.

"As before," she writes, "things are going well and we are on track for a 2014 launch. We have no plans to change suppliers from the team we originally proposed to the City."  

 
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