There has been a lot of talk lately concerning the Skagway waterfront, specifically on the borough’s renewed engagement with the White Pass & Yukon Route Railroad regarding the current tidelands lease, Ore Basin cleanup/remediation and a new tidelands lease.
White Pass is approaching the end of a 55-year tideland lease, which began in 1968 and will expire on March 19, 2023. The Municipality has been in talks with White Pass off and on regarding the Tideland Lease for the last ten years.
The cruise industry is expanding, and plans to deploy the next generation of cruise ships to Alaska over the next several years. They want new and improved port facilities to accommodate these new vessels. This is not a new development. Some of these vessels have already been built, more are currently under construction and still more are on the order books.
White Pass has agreed to partner with the Municipality to construct a new floating dock and cleanup the contamination in the Ore Terminal Basin. However, in exchange for doing so they want a new lease of municipal tidelands. No action will be taken until such new lease is approved.
Cruise Line Agencies of Alaska and Temsco Helicopters (both owned by parent corporation Southeast Stevedoring) have asked the Municipality of Skagway to reach an agreement with White Pass in order to accomplish the desired construction and necessary cleanup.
Cruise Line International Association, a consortium of cruise lines, has also requested the Municipality reach an agreement with the railroad in order to move forward with port improvements and contamination removal.
Here’s the thing: Why does the Municipality need White Pass involved with its waterfront? It is municipal property. White Pass is not a port, they are not in the freight business and they are not (as they would like you to believe) a Cruise Terminal Operator. White Pass is a tour company. They are a shore excursion. They are the biggest shore excursion in the state, but a shore excursion nonetheless.
White Pass has contracted out the port operations aspect of its business for many, many years. Cruise Line Agencies of Alaska, a Ketchikan company and subsidiary of Southeast Stevedoring, handles all port operations in Skagway, and not just cruise ships either. Ore ships and fuel barges are served by the same company, whether it’s under the name of North Pacific Maritime, Alaska Maritime or any other name.
Southeast Stevedoring has a historic and ongoing business relationship with White Pass. Maybe that is why both CLAA and Temsco requested in writing that the Municipality reach an agreement with White Pass.
So why should the Municipality lease its waterfront to a tour company? If we are going to do that, shouldn’t we at least lease it out to a local tour company?
The current owners of White Pass have stated in writing their intent to sell the railroad. White Pass is on the market.
It is rumored that at least one major cruise line is very interested in purchasing the railroad.
The problems with a cruise line buying the White Pass are many, however one sticks out predominately. A lease ensures control of docking.
We have more than one cruise line visiting Skagway. These cruise lines are all competitors.
If one cruise line controls the port of Skagway, it is not good for the other lines or for the businesses of our community. We all suffer.
This issue will affect our community for the next 50 years, if not longer.
So, what to do? The Municipality of Skagway has engaged the services of Moffatt & Nichol, who have completed several tasks including short-term dock improvement planning, property value assessment and potential port governance models.
The assembly did the right thing in hiring professionals with the proper expertise for our waterfront needs.
We will need to hire additional engineering and legal professionals before we can accomplish what is necessary with our waterfront.
I encourage the Municipality and the voters of Skagway to let the current lease with White Pass expire. I am not in favor of a new lease with the railroad. They have become a middleman in port operations.
There is no need for a middleman in this day and age. The Municipality can put port operations out to bid. The day-to-day operations will remain as they are today. The cruise ships will continue to dock, the trains will still load their passengers and most likely Cruise Line Agencies will still handle port operations.
The revenue and income from the two docks would go to the Municipality as well as the cost of insurance and maintenance.
That is why it is important that the current lessee improve the conditions of disrepair and clean up the Ore Basin prior to lease expiration.
Whatever the case, the Municipality will have to hire legal counsel specializing in port leases and environmental cleanup, because although everyone wants to play nice, it ain’t gonna happen.
So remember, hire and expire.
Tom Cochran • Skagway