By DAN FOX
Skagway’s municipal staff has been instructed by the Borough Assembly to review and give feedback on the draft memorandum of understanding (MOU) with the White Pass & Yukon Route Railroad.
This direction came at the end of a lengthy discussion at the Sept. 21 assembly meeting that covered the MOU, a potential tidelands lease and the municipality’s waterfront.
The draft MOU contains a list of proposed amendments to the current 1968 tidelands lease with White Pass, suggested collaboration on remediation in the Ore Terminal Basin, plans to build a floating component at the Ore Dock to accommodate larger classes of cruise ships and details concerning a new tidelands lease with the railroad.
Previously, the assembly had approved new language additions to the MOU provided by Borough Attorney Bob Blasco. The negotiating team – comprised of assembly members Orion Hanson and Tim Cochran – recently met with White Pass to discuss Blasco’s language, and returned to the assembly with suggested changes to the MOU. On Sept. 21, Hanson said they had also met with representatives from Royal Caribbean Cruise Lines and Norwegian Cruise Lines.
“My take on this was that the ships, these representatives are very eager to come to Skagway, they appreciate our town, it’s a great destination,” Hanson said. “But they’re planning for 2019, and if we do not have the docks to accommodate them, they will be going elsewhere.
“That wasn’t said with such an iron fist, but it was certainly said with a very soft fist.”
During the meat of the assembly’s Sept. 21 discussion on the MOU, Assembly Member Monica Carlson expressed some frustration on the ongoing talks.
“I’m really frustrated, and I told you that at the last meeting,” Carlson said. “I wanted to make this document the best it can be for the people of Skagway, so if they vote for it they get the best deal.” Carlson said she doesn’t understand why the municipality can’t buy the docks when the 1968 lease expires. Mayor Mark Schaefer again encouraged the assembly to get something before the voters, and said the assembly will never agree on every point in the MOU.
“Because we told the public that we’re going to give them something to vote on, and we know we need to do it in a timely fashion, I sure hope we can get something to them,” Schaefer said.
The assembly made a number of tweaks to the MOU, then voted to accept some wording changes/additions to the document and send it to municipal staff and the borough attorney for input.
The vote came in 3-3, and Schaefer broke the tie in favor of the motion.
Members of the public took their turn at the microphone during public comments at the Sept. 21 meeting, with a range of statements focusing on the White Pass MOU and potential tidelands lease agreement.
After commending the assembly on its work so far, Jim Sager said the assembly members have listened to their constituents and “real progress is finally being made.”
“However, I had a few conversations with some Skagway voters today,” Sager said. “The content of those conversations scared me a bit. With all the recent work that has been done to bring forward the lease with White Pass, the recent compromises, revisions and tweaking have resulted in the conversion of a few that had previously opposed the lease under different terms.
“I found through conversation today that there was a great deal of information that has not been conveyed to all the voting public.”
Sager called the means that Skagway currently uses to distribute information “inadequate,” and urged the municipality to take immediate action to provide accurate information on the MOU to voters.
Resident Carl Mulvihill seconded Sager’s comments, adding that he’s been troubled by some of the animosity he’s heard around town directed towards the assembly members.
“I’ve heard many derogatory comments directed against the assembly, and I feel this is very disrespectful to the people who have been elected to those positions who spend a lot of hours on our behalf,” Mulvihill said.
David Brena called the negotiation with White Pass a zero-sum-game.
“Everybody likes the White Pass, I worked for them many, many years, from the time I was 14 years old, but I’m not in favor of giving them a gift, and I’m certainly not in favor of negotiating with somebody that holds something like the cleanup of the harbor over our heads if we don’t give them a lease,” Brena said.
Some key details included in the current draft MOU:
Lease term – 15 years, starting in 2023
New floating component – White Pass and the municipality would split the cost of a new floating component at the Ore Dock to accommodate larger classes of cruise ships.
The component would follow the 3B design proposed by Moffatt & Nichol, costing approximately $15 million.
The floating dock and ramp will meet highway heavy-load criteria needed for a roll-on/roll-off design, necessary for transporting wheeled cargo like semi-trailer trucks. .
Remediation – Cleanup in the Ore Terminal Basin would be funded by a $2,750,000 contribution from White Pass and a $1,500,000 contribution from the municipality. Skagway’s contribution will be capped at $1,500,000. Even if a new lease with White Pass is ratified by voters, the execution of the remediation and cleanup is a condition precedent to the municipality entering into a new lease agreement with White Pass.
Payments – Annual payments for the current lease (which is in effect until 2023) would be changed to $250,000. A new lease would have payments starting at $250,000 per year, increasing 3.5 percent annually to a final payment of $418,837.21 in 2038.
Indemnification – The lease amendment would incorporate tenant and environmental “defend and indemnify” obligations from White Pass.
White Pass will agree to maintain a minimum of $5,000,000 in general liability insurance, with the municipality named as an additional insured, and at least $10,000,000 in pollution and environmental insurance coverage, with the municipality named as an additional insured.
The Docks – At the end of the lease term in 2038, the municipality will receive all tideland assets, including the Ore and Broadway docks. A capital improvement reimbursement plan is included in the MOU for the municipality to pay back partial costs (or total costs, depending on the year in which improvements are completed) of capital improvements done to the docks during the lease term.
Capital improvements must be mutually agreed upon by White Pass and the municipality.
[EDITOR’S NOTE: These are only a few bullet points from the memorandum of understanding. A link to the full document can be found by Clicking Here.]