Recent correspondence has indicated the Alaska Industrial Development and Export Authority (AIDEA) may not seek to renew its tenure at the Ore Terminal when its lease expires in 2023.

Mayor Monica Carlson, who met with AIDEA representatives while away for the Alaska Municipal League conference, first voiced her concern on the issue during a recent Nov. 21 Borough Assembly meeting, where assembly members were discussing a draft memorandum of understanding (MOU) between Skagway and the White Pass & Yukon Route Railroad over a tidelands lease amendment and potential new lease.

Carlson said at the meeting that this revelation had become a “big concern” of hers – so much so that following the assembly’s approval of sending the MOU to White Pass, Carlson temporarily halted that process with a veto.

In her veto email to the municipal clerk, Carlson said that the information regarding AIDEA’s lease has not been addressed in the MOU, and has financial and potential immediate impacts to the citizens of Skagway.

Dr. James Hemsath, AIDEA’s director for project development and asset management, said that since 2010, AIDEA has been trying to work with the municipality and come up with a new lease.

In a letter to the mayor, Hemsath said the meeting with Carlson was the first time in almost two years that anyone from Skagway had reached out to AIDEA.

Hemsath also said at present, he is unsure if the AIDEA Board of Directors will approve extending its lease.
“They are fatigued by the constant accusations that we are [in] collusion with DEC [Alaska Department of Environmental Conservation] and or other parties for one; but I believe the real problem would be the lack of a business case to support having an ore terminal in Skagway,” Hemsath wrote.

In a phone interview, Hemsath said the board has come to the conclusion that the Skagway community no longer wishes AIDEA to be involved with the Ore Terminal.

“Our lease expires in 2023, at which point all the facilities and any contracts that would be in place – of which there are none – would be transferred to the municipality to own and to operate,” Hemsath said.

A renewed lease had been on the assembly’s table in 2014 and 2015, but was removed from the agenda in summer 2015, Hemsath said.

Opinions from the community have been mixed on AIDEA’s position. Business owner Jeff Brady addressed the assembly on Nov. 30, where he encouraged the municipality to keep AIDEA as a port partner and work with AIDEA in promoting the “Skagway advantage,” adding that the “vision of a working, year-round port should never be abandoned.”

Borough Manager Scott Hahn said he believes AIDEA hasn’t served Skagway well, and that he believes there is ongoing contamination occurring on the leased land.

“I’ve had this AIDEA group, who is a pseudo government, pseudo private corporation, do everything they can to obfuscate and avoid acknowledging any of the contamination issues that we have witnessed over the last years, and so I can’t say that is a good partner to me,” Hahn said. “I’m not speaking for the city, I’m just speaking for me – I don’t find that very comforting.”

Hahn said he believes the municipality also needs to create a “regulatory backbone” to step in and do its own investigation and enforcement, and that he thinks Skagway should have a future as a multi-modal port to serve more industries.

Dave Hunz, president of Ore Terminal operator Mineral Services, Inc., said the terminal operator is following all ADEC rules for operations at the site.

“There’s no ongoing contamination at all,” Hunz said.

Hunz said there is still a lot of interest and mining development in Alaska and the Yukon. It can take time for a mine to come around and start shipping ore, Hunz said.

“AIDEA is here to help us, and all you have to do is reach out and ask them for [their] help,” Hunz said.

Former Mayor Tom Cochran said it would be a mixed bag if AIDEA walked away, with aspects of that scenario being good and bad.

Cochran, a proponent of letting the current tidelands lease with White Pass expire, said the municipality should let the subleases expire so the city could take them over.

“I think it actually works in the city’s favor in a way, because I would just as soon see the city get that whole waterfront,” Cochran said. “It gives you a clean slate down there, to kind of start from scratch.”

Cochran added that while AIDEA said no one from Skagway reached out to them for almost two years, it’s a “two-way street.”

“They haven’t contacted us either,” Cochran said.

Former Mayor Tim Bourcy said AIDEA’s current stance is not surprising, “considering the posturing that the municipality has taken in the past few years with AIDEA.”

“In the past administration, they basically walked away from a lease, and they have not really had any substantive conversations with AIDEA since,” Bourcy said.

Bourcy said he is a proponent of diversified economy for the town, and added that the shipment of materials helps pay to maintain the Klondike Highway year-round.

“And I don’t think it would be right to ignore the multitude of opportunities that exist in the north for transshipment materials, whether it be gas or copper,” Bourcy said.

When asked if AIDEA would stay on in Skagway should the situation change, Hemsath said both “yes,” and “no.”

“Our board has their own fiduciary responsibilities, and if we can’t demonstrate there’s actual mines that would move product and sign leases with us, well there’s no real reason for us to continue to own that,” Hemsath said.

Hemsath said there needs to be a business case behind the decisions AIDEA makes.

“It isn’t that we would say ‘yes’ or ‘no,’ it’s all situational,” Hemsath said.