Larger cruise ships are coming to Alaska in 2018, the waterfront lease held by White Pass & Yukon Route Railway is up in 2023, the sublease with Alaska Industrial Development and Export Authority (AIDEA) is also up then, and the sediment in the Ore Dock basin has legacy contamination.
These and other topics were the focus of a three-hour long teleconference on Dec. 19 with port consultants from Moffatt & Nichol.
The Port Steering Committee, Mayor Mark Scheafer, Assembly Members and Borough Manager Scott Hahn discussed plans to move forward on the first phase of the port improvements and remediation of the waterfront.
With the dismal defeat of the White Pass lease renewal by voters in Oct. 2015, the assembly this fall hired Moffatt & Nichol for a comprehensive look at the relationship between the municipality and White Pass. The port consultants will also look at what the municipality should do to accommodate plus-sized cruise ships that are headed this way.
Monday’s meeting comes just after the announcement that State of Alaska approved a one-year extension on a $6.5 million dock improvements grant. Assembly members unanimously passed a letter asking for an extension on the grant during the Thursday, Dec. 15 regular meeting. The extension came through the next afternoon. The grant extension has been approved through June 30, 2018.
“We did get a one year extension on that grant, but I don’t think we should slow down,” said Assemblyman Tim Cochran, who is also the vice-chair of the Port Commission.
“I’ll speak from a personal standpoint,” Assemblyman Steve Burnham, Jr. said. “We [want to] have a functioning port, that has been cleaned up as far as contamination goes, so that we can continue using the port as we currently do, in an expanded fashion and that we have included the community in that decision-making process. As far as the community goes, I would refer to the public and stakeholders on the waterfront and any potential stakeholders. Hopefully our plan would encompass those things.”
Port Commission member John Tronrud echoed Burnham by saying that short-term goals would include cleaning up the waterfront and long-term goals would be expanding the docks to accommodate larger ships and more visitors.
“We want to know, as we engage the stakeholders, and we address the elephant in the room, is ‘What is a fair and reasonable return on investment? What’s good for the community? And how can we all get along?’” Tronrud said.
Tim Bourcy, chair of the commission, has been involved in waterfront improvement projects since 2007. “During that time, we’ve had some successes, and also some failure in the achievement of understanding developing our port,” he said.
“I think one of the failures to putting out the lease extension [to the voters] was that nobody really understood the value of what was being put out there,” Bourcy said.     “The value of the uplands themself was part of what the municipality was going to inherit. And there was really no value put on it as to what that value was going to be. In addition to that, the lease fees, for what the municipality was going to gain in the long-term, over time, and whether or not that was appropriate in regards to the marketplace. I think that the public did not have a clear understanding of that. I would say that the municipality didn’t have a clear understanding of that. I think it’s essential that we have a basic idea of what that is. Without that, we cannot find an equitable way forward not only for the municipality but also for the stakeholders.”
Bourcy also said that if at some point the municipality takes over running the waterfront, the operating costs should also be known.
The main focus for the Gateway Project, Bourcy said, had been the Ore Basin and the Ore Dock. The Ore Dock is the docking area for Alaska Marine Lines (AML), it’s the fueling area for Petro Marine, it is the docking facility for ore ships serviced by an AIDEA contractor, and it is a cruise ship berth.
As part of the analysis, the Moffatt & Nichol will look at Skagway property values as currently appraised, and also take a look at property values in similar ports of call.
“The facility itself is less than acceptable condition at this point,” Bourcy said. “The legacy contamination issues have been identified and the municipality has expressed its desire to have that area cleaned up, prior to 2023.”
As things stand now, the AIDEA lease has been tabled, as has reopening extended lease negotiations with White Pass.
“Obviously there are issues within the port that need to be dealt with in regards to some of the legacy contamination issues, but additionally, not only the uplands area. Perhaps maybe redesigning or reconfiguring the uplands, to me would be more efficient not only for the handling and transshipment of materials, but also for the handling and transport of what is the primary use of the port which is of course cruise passengers.” Bourcy said.
The larger cruise ships, or “Type E” vessels, are 1,150 in length and require a 40-foot basin.
Funding for port improvements will come from several different sources. Brought up in the meeting were the $6.5 million from the State grant, $1.5 million from a dredging grant that expires in 2018, $5 million municipal bond funding, a $800,000 harbor grant, and the $65 million in state bonding available to AIDEA to improve its facility. Also, White Pass has committed an undisclosed amount of money toward harbor cleanup once it is decided how best to proceed.
Meetings in 2017 are scheduled for Jan. 18, March 1, April 2, and June 15.