By Larry Persily
The municipality wants to be “extra cautious” in responding to a letter from White Pass & Yukon Route attorneys that asserts the borough must negotiate to renew the company’s long-term waterfront lease when it expires in 2023.
The borough had been looking at seeking competitive proposals for development and use of the port acreage.
Mayor Andrew Cremata said he wants to be careful and “doesn’t want to jump the gun and make it more adversarial.” The borough assembly Dec. 23 approved hiring an Anchorage law firm to assist the municipality in understanding the issues raised by WP&YR.
Though he had talked in November of holding a town hall meeting to discuss the future of Skagway’s port, those plans are now “a little bit up in the air,” Cremata said Dec. 30.
“We’re just looking for a legal opinion on how to proceed,” the mayor said, estimating the legal bill at less than $5,000. The mayor, borough manager and borough attorney already have reviewed the letter. “We thought it would be prudent to put new eyes on it,” Cremata said.
The borough has brought on the law firm of Brena, Bell & Walker to review the issue. Former Gov. Bill Walker is a member of the firm.
“There still may a point when we want to do a work session” of the assembly and public, Cremata said. But first he wants to look at the law firm’s recommendations, which he expects to receive later this month.
WP&YR asserted in its Nov. 8 letter that the borough should stop any consideration of leasing the waterfront property to anyone other than the company at the expiration of the 55-year lease in 2023.
Under the contract signed in 1968, the letter said, the borough has to negotiate to renew the lease, and failure to undertake good-faith renewal negotiations with WP&YR could expose the borough to financial liability.
The lease, according to the attorney, provides that WP&YR has the right to request a new lease and, assuming the borough and the company can reach terms on a deal, no bids from other potential renters are required.
WP&YR’s attorney said the lease gives the company the “right and the opportunity” to request renewal of the lease “primarily because of the significant improvements WP&YR has made to the tidelands since 1968.”
Skagway voters cast their ballots 2-to-1 against renewing the lease with WP&YR in a 2015 referendum.
“Since it (the Nov. 8 WP&YR letter) came from an attorney, we’re trying to be extra cautious,” the mayor said.
Multinational cruise line operator Carnival Corp. purchased WP&YR in 2018. Ketchikan-based Survey Point Holdings is a partner with Carnival subsidiary Holland America Princess Alaska Tours in managing WP&YR.