In a 4-2 vote, the Skagway Borough Assembly Monday approved an ordinance authorizing the municipality to lease tidelands property to White Pass and Yukon Route Railroad through 2050. But the assembly doesn’t have the final say. The fate of the multi-million dollar lease is now in the hands of Skagway voters.
The 35-year lease between Skagway and White Pass will give the municipality access to expand the town’s port, as part of the Gateway Project. Right now, the city doesn’t have access to the entire port because the railroad leases and controls much of the tidelands.
The lease between the company that owns White Pass and the municipality has taken years to negotiate. It reduces the amount of property White Pass controls and increases the company’s payments to the city. It also splits the cost of a floating dock, which would accommodate larger cruise ships.
At Monday’s meeting, two members of the public spoke against the lease.
“If I had to guess, only a few voters have read the draft lease and fewer still the existing lease. For some fraction of the voters – hopefully a very small fraction – the first time they will see this ordinance is when they step into the voting booth,” said resident Roger Griffin.
Griffin said White Pass would control the flow of tourist traffic and take customers away from other businesses. Assembly member Dan Henry, one of the municipality’s negotiators on the lease, responded to that later in the meeting.
“If that is your viewpoint, if that is the school of thought you subscribe to, you would have to accuse them already of controlling the flow. And they don’t control the flow,” Henry said. “They take whatever passengers have gotten tickets and they put them on the train and take them out town.”
Gayla Hites also spoke against the lease. She said, in the 1980’s when Skagway was struggling, it was a group of citizens – not the railroad — who took on the responsibility of revitalizing the economy.
“The municipality needs to have an effect on their own future,” Hites said. “Because we didn’t have that effect in 1983. We didn’t have our waterfront belong to someone else, it still does. This community needs to think long and hard about being able to effect its own future moving forward.”
Griffin questioned another part of the lease. In the document, White Pass commits to pay $2 million toward the cost of cleaning up the port. The port was contaminated decades ago, and the state says White Pass is one of several parties responsible for the contamination. Some people have said $2 million is not enough of a contribution toward the cleanup.
“White Pass has committed $2 million for dredging for the remediation,” Assemblyman Tim Cochran said. “That does not put them off the hook for any other contamination that might be found that’s down there. It’s cradle to the grave…Everyone is held accountable.”
Another point of contention during the meeting was a recommendation from the port commission to do a cost benefit analysis of the lease. The borough assembly has decided not to take action on that suggestion.
Assembly member Gary Hanson has been a vocal opponent of the lease. Hanson was on the original negotiating team, but dropped out because he disagreed with the negotiation’s direction.
“People of Skagway are smart shoppers. They’re gonna go, ‘that’s too much money, that’s too much to give up for what we’re getting.’ And that’s what they’re telling you, the folks who spoke up here tonight. And I’m hoping that the voters of Skagway will tell you that too.”
Hanson also suggested assembly members Spencer Morgan and Steve Burnham, who work for White Pass, recuse themselves from the vote. Skagway’s borough attorney has said just working for White Pass doesn’t meet the state’s definition of a conflict of interest.
“The railroad didn’t ask me to apply for that job and they didn’t ask me to run for assembly,” Burnham said. “And this vote on this ordinance right now sends this to the people that will ratify whatever decision we make as an assembly. And the people also voted to put me here, White Pass did not.”
The assembly voted to amend the ordinance with a clarification pertaining to capital improvements. The amendment aligned the ordinance with language in the lease.
All the assembly members voted on the ordinance. Hanson and Morgan voted against it. The assembly’s vote now sends the ordinance to the Skagway public. That’s because local law mandates a public vote on any lease that brings in over $5 million to the municipality. The lease with White Pass is expected to bring in $11 million over its 35 years.
The special election is scheduled for August 25th. To help inform people about the leases’ details, the municipality is scheduling two town hall-style meetings. The first is set for July 17th.