By DAN FOX
EDITOR

After a long process of creating, reviewing and approving a memorandum of understanding (MOU) governing a potential new tidelands lease agreement and amendments to the current lease between Skagway and the White Pass & Yukon Route Railroad, the railroad’s attorney had taken a first crack at producing a lease based off the MOU.

However, following the negotiating team’s receipt of that draft lease, Skagway’s Borough Assembly voted to have the mayor send a letter to White Pass  announcing the assembly’s determination not to proceed further with drafting a tidelands lease.

“The municipality expected to receive a draft amendment to the 1968 lease and a draft 15-year lease beginning in 2023, consistent with the signed MOU,” Mayor Monica Carlson said in her letter. “The negotiating team was surprised to receive a draft lease beginning now until 2023, replacing the 1968 lease, and with deviations from the MOU.

“The Assembly decided that after so many years of negotiating with White Pass, without success, further time and resources spent negotiating this draft lease may not result in the most beneficial long-term arrangement for the community.”

White Pass President John Finlayson said the railroad strongly believes that a relationship between it and the borough should be a cooperative one.

“To that end, we feel it was worth the effort and still feel it’s worth the effort to continue to try to do the right thing,” Finlayson said. “Right thing isn’t always easy, but in our minds because it’s the right thing we were looking forward to continuing to work at it.”

Finlayson said the instructions given to White Pass’ lawyer was the lease was to mirror the MOU.

“And we have yet to have any dialogue about where they [the assembly] thought there was a discrepancy,” Finlayson said. “We weren’t trying to manipulate the lease in any way, shape or form. In fact, we wanted it to be an exact replica of the MOU.”

The letter is “a little ambiguous” as to how the railroad and borough should proceed Finlayson said, and he added that he is curious to see the assembly’s plan moving forward.

“It takes two to dance, and if you don’t have a willing partner then there’s not much you can do,” Finlayson said.

The assembly voted to send that letter to White Pass after coming out of a lengthy closed-door executive session meeting on March 15. Three days earlier, Carlson and the assembly were themselves the recipients of a letter sent by Norwegian Cruise Line Holdings LTD. (NCL), which expressed concern that “an arrangement that provides any cruise line company a controlling influence in the Port of Skagway, as was recently proposed, creates the possibility of jeopardizing our historic partnership, and possibly that of other brands.” The Holland America Group had recently sent correspondence to the assembly announcing interest in a partnership with Skagway in its port

“With the greatest respect, we would ask you consider the potential negative impact that any such arrangement with one cruise line or group of lines may bring,” the NCL letter states. “In our experience, the preferred option would be to not include any specific cruise line company in the management and operation of the port, but rather to establish an independent management structure that accommodates all cruise brands on an equal basis.”

In a response sent from Carlson to NCL on April 6, the mayor said “we appreciate and understand your concerns about possible negative impacts to our port if it were to fall under the controlling interests of a single cruise line.”

“It is our goal to welcome all cruise lines to our Municipality in a fair and equitable way,” Carlson wrote.

In addition to the executive session on March 15, the assembly has recently held a number of closed-door meetings over matters dealing with the borough’s waterfront. Most recently an executive session was held on April 5, where the assembly privately discussed the potential hiring of a port director, specialized legal counsel, development of a request for proposals for port waterfront management and other topics. After re-opening the meeting back up to the public on April 5, the assembly voted to continue that executive session discussion at a special meeting on April 12.