By ELISE GIORDANO
The long-awaited new tidelands lease between the municipality and the White Pass and Yukon Route railroad passed its first reading on June 4, with only Assemblyman Gary Hanson voting against it.
The ordinance authorizes the municipality to lease the tidelands directly beneath the Ore Dock and Broadway Dock to WP&YR’s Alaska Division, Pacific and Arctic Railway and Navigation Company, or PARN, through December 31, 2050.
A special election would be held to ratify the ordinance and lease.
Currently, WP&YR leases most of the west half of the waterfront. Under the new lease, the area would be reduced to 334,862-square feet, allowing the city to access the land for the Gateway Project.
The 35-year lease would cost White Pass a quarter million dollars each year, increasing by $25,000 every five years, to $400,000 per year in the final five years. The company currently pays $127,000 a year.
White Pass also agreed to pay $2 million toward the mitigation of the ore basin as part of the Gateway Project, and also agreed to share in the construction of a floating dock to allow for docking of larger ships.
The lease protects the municipality from any action or liability in the event of any environmental spill or contamination.
WP&YR will continue receiving revenue from cruise ship operations on the south end of the Ore Dock and floating dock, and the municipality would receive all industrial and non-cruise revenue.
The current lease ends in 2023, but would be terminated upon the ratification of the new lease. White Pass would continue to collect revenue from seven subleases for the next seven years.
White Pass will maintain general liability insurance for the benefit of the municipality in the amount of at least $5 million.
At the expiration of the lease, all improvements to the leased area will be owned by the municipality without payment to White Pass.
Assemblyman Hanson attempted to clarify some of the language within the ordinance with an amendment, but Assemblyman Steve Burnham Jr. suggested they wait to make amendments until after the public is given the chance to voice their opinions.
Assemblyman Dan Henry agreed, and added that Borough Attorney Bob Blasco should be consulted before any amendments are made.
Though the ordinance states only the key points of the lease, borough assembly members agreed to make the entire lease public, and since the meeting, a link to the proposed lease has been posted to the municipality’s website.
Second reading and public reading of the lease has been scheduled for a special meeting on July 6.
When the public does vote on the ordinance, the lease will not be attached as per code.
Those wishing to view the lease in its entirety should visit skagway.org.
The proposed lease has taken more than two years to negotiate behind closed doors. Specific details, other than what was passed in an earlier Memorandum of Understanding between the parties last year, were not revealed until the June 4 meeting.