By Leigh Armstrong

The borough assembly has again postponed a decision on whether to accept a significantly higher appraised valuation of the municipally owned tidelands at the Railroad dock, giving White Pass & Yukon Route another chance to respond before the next meeting.

At stake is a potential sixfold increase in the company’s annual lease payment to the borough.

If WPYR chooses not to respond before the June 20 meeting, the borough assembly will vote whether to accept the appraisal by Denver-based Integra, Assemblymember Orion Hanson said. 

“This isn’t indefinite. This is basically saying that if (WPYR) doesn’t accept this, this table will vote,” Hanson said. 

The property currently is appraised at $2.2 million, with an annual lease fee of $127,000. The municipality last year ordered a new appraisal for the five-rate adjustment under the 1968 lease. Skagway’s longtime appraiser, Sitka-based Horan & Co., set the value at $2.2 million. Integra appraised the value at $14.7 million, which would result in an annual lease of $882,000.

The assembly this winter rejected the Horan appraisal but has not accepted the Integra valuation.

The assembly voted July 6 to table the discussion until June 20 in a 4-2 vote, with Assemblymembers Dave Brena and Jay Burnham opposed. 

The borough assembly voted down the Integra appraisal in February, but in March decided to take another look. 

In a March 8 letter to WPYR, the assembly offered the option of choosing a third appraiser from a list. In WPYR’s response on March 15, the company suggested the municipality adopt the Horan appraisal. 

The municipality again is offering WPYR the chance to choose a third-party appraiser to assess the accuracy of the Integra valuation. The municipality offered up names of three appraisers in Anchorage, with WPYR and the municipality each allowed to strike one name from the list — the remaining one of the three would get the job.

“I think Horan valued it in terms of the unimproved value of the tidelands in 1968, which was basically tidelands,” interim borough manager Tom Healy said. “Integra valued it at being improvement value, that is the land that was created.”

With the vast difference in the appraisals, having a third party look at the Integra appraisal makes sense, he said. Healy recommended that the third appraiser should be instructed to clarify the discrepancy between the first two valuations. 

The assembly immediately turned down the idea of negotiations between WPYR and the borough, contending it would violate municipal code. 

“We cannot negotiate the difference between the Horan and the Integra (appraisals). We can’t suggest the city manager go over to White Pass offices and discuss meeting in the middle. It’s precluded by code,” Assemblymember Dan Henry said. 

Assemblymember Steve Burnham said there are procedures in the lease if WPYR doesn’t agree with the appraisal, and negotiations could stem from that process.