By Melinda Munson
The Municipality of Skagway received just one bid for the Ore Dock Redevelopment Project. Borough Manager Brad Ryan attributed the lack of competition and the higher than expected price tag to timing.
“It’s the nature of how we’re coming out of COVID, and still kind of suffering from that. And being in Alaska, Alaska is struggling,” he said.
Pacific Pile and Marine quoted approximately $75 million “to install a cruise ship float, fuel header, sea walk and other upland utilities,” according to a memo from Ryan. The proposal is significantly higher than the engineer’s estimate and the $65 million bond Skagway voters approved in October 2022.
In response, the assembly met in a special meeting July 18 and approved a modified project plan, referred to as Scope B, which continues to allow the placement of two deep water dolphins. For roughly $4 million, the dolphins make it possible for a very large vessel to berth on the new Ore Dock without encroaching on a ship at Broadway Dock. The sea walk and other upgrades will have to wait, for now.
Ryan estimated that holding off on the deep water dolphins until a later date might end up costing $10 million.
Ryan said the goal with the modified plan is to “get the float in, get it operational.” There will be no new fuel header and docks north of the current ore loader will remain. Water will be available for fire protection but not for ships to replenish their supply.
“We’re not getting utilities dug in,” Ryan stated. He pointed to the cost of contamination clean-up as a major factor in the decision.
“I do just want to make it clear for the community that none of this is a design change. It’s just a phasing, possible phasing delay…” said Assemblymember Deb Potter.
Scope B is estimated to cost $41,196,876 with an additional expense of $5,288,490 for project management and permit compliance, totaling $46,485,366. There is $45 million remaining in the revenue bond. The vote was unanimous.
“I agree that option B makes the most sense,” said Assemblymember Sam Bass. “It is concerning that we’re only gonna have a 3% contingency on such a large capital project with so many moving parts. And that’s worrisome.”
Commercial Passenger Vessel Excise Tax (CPV) and higher than expected sales tax returns were all discussed as possible ways to offset the increased expense.
The Marine Service Platform (MSP), expected to be paid for by the Yukon government, is not a part of the bid discussed by the assembly. The MSP came in at $7 million higher than anticipated and will have to be re-negotiated.
At the July 20 assembly meeting, the body approved a project management contract with KPFF Consulting Engineers, the same company that designed the redevelopment project.
“…$5,288,490 is a lot of money,” said Assemblymember Hanson. For this to be done in this tight window with all the moving parts, the tight environmental compliance permitting … We have to pull this off. This is absolutely imperative.”
Construction on the project will commence in October with long, cold, seven-day work weeks which will include an on-call attorney and a marine mammal watch vessel. If all goes well, a new Ore Dock will be ready to welcome cruise passengers in Spring 2024.
Community members Tim Cochran and John Tronrud spoke at citizens present during the special meeting, advocating for completing the redevelopment project in phases.
Cochran noted the port spent $11 million last year and $12 million so far this year.
“We really have to watch our spending and have some serious oversight,” he said.