By Aly De Angelus

Slightly more than 1 million cruise ship passengers a year arrive in Skagway, and the borough’s Miami-based port development consultant has recommended the community plan to accommodate 2 million annual visitors by 2037.

A new pier for cruise ships, expansions and other port improvements could cost $96 million 2021-2026, the report said. Skagway will need a new pier to provide an additional two large berths to accommodate the expected increase in cruise ship traffic, the Bermello Ajamil & Associates report said.

“Rather than focusing on a number like 2 million, which I am sure everyone in this community feels is absolutely irresponsible in every way, we (need to) look at the fact that we better control our port in 2023 and we better make sure it’s not in the hands of one cruise ship company or we are going to be in a situation where we don’t have a say for how many people are here in 15 years,” Skagway Mayor Andrew Cremata said. “It’s critical that we have that kind of control.”

The White Pass & Yukon Route Railroad has leased the port since 1968, with the lease due to expire in March 2023. The borough has expressed interest in not renewing the lease and either operating the port itself or contracting with a different operator. Carnival Corp., which owns Holland America Line, Princess Cruises and Carnival Cruise Line, is part of the consortium that bought WP&YR in 2018.

WP&YR, however, maintains that its 55-year lease with the borough requires the municipality to bargain in good faith with the company for a new lease before going out for other operators. Lawyers for the borough and WP&YR have been arguing their respective sides in letters the past several months.

The borough’s consultant presented its report at a Feb. 4 meeting in Skagway on future port expansion and management options.

Bermello outlined four options with varying degrees of risk and control. Two would have the municipality own and operate the port, with a new pier under one option — posing the biggest financial risk to Skagway but the most control.

Two other options would have the municipality hire an operator for the port. The consultants advised against those options because of less control and less upside revenue potential for the municipality.

The strategic plan from Bermello Ajamil & Partners is expected to come before the borough assembly at its meeting March 19.

The borough had asked the consultants to propose a long-term vision for the waterfront to serve the needs of Skagway and the Yukon, provide recreational access to the water’s edge for cruise and state ferry travelers, and inspire growth in waterfront businesses including cargo, fuel, the small boat harbor, Yukon mining operations and ore shipments, and other commercial activities.

“It would be in the best interest of the community to control the waterfront asset moving forward to a greater degree and reap the financial rewards and risk to the major waterfront asset,” the consultant’s report said. “Skagway should own and operate its waterfront into the long term.”

Future development could include a new pier for cruise ships and a new cargo berth for roll-on, roll-off ships with upland facilities, the report said.

The consultants suggested implementing adding $3 to $4 per person to the existing $5-per-passenger cruise ship tax to help fund port development. If Skagway decides to go with that option, Cremata said the assembly will need to decide if it if wants to add the tax in 2022 or wait until the municipality takes control of the port in 2023.

In addition to the WP&YR lease and issue of port control, the borough and the railroad also are engaged in the company’s plans to clean up contamination under the ore dock, left over from past loading operations. WP&YR has proposed a dredging plan to the state to clean up the basin, though the borough has asked for a more extensive cleanup and sampling.

The consultants also proposed clearly defined trails for visitors and overlook access by the ore dock in the hope of splitting pedestrian traffic more evenly between the community’s four berths.

The report also suggested extending the small boat harbor with a 700-foot-long dock and adding tourism-related activities on the waterfront.

Port Commission Chair Paul Reichert said Skagway is coming to a pivotal point where the town must decide if it wants to continue growing the economy, specifically considering social and environmental impacts.

Growth has been “the mantra for several decades.” Reichert said. “If we send the ships up, we are going to accommodate them. It’s something to keep in mind as we balance those glamorous revenue numbers.”

The port commission is designing a job description for a new port development position. Reichert said they could call it a port planner, “someone who spends a minimum of 40 hours a week thinking about and planning for the port.” Cremata said at the Feb. 20 port commission meeting that he hopes to make a hire by the end of this year.

The Bermello report also suggests moving TEMSCO’s helicopter operations away from the waterfront when the company’s lease expires in 2023 and moving the business to the airport.

TEMSCO’s Skagway base manager Kelly Healy spoke at the March 5 borough assembly meeting and wrote a letter to the municipality, explaining such a move would put the helicopters “in direct conflict with runway traffic, and would not be a feasible or safe way to approach the volume of landings performed.”