Skagway ore dock. (Courtesy AIDEA)
Skagway residents can now see the 68-page draft lease between the city and White Pass Yukon Route Railroad.
The assembly voted last week to release the document that has taken years to negotiate. Some details of the agreement were released 18 months ago. The basic outline was also released at the meeting in an ordinance. That ordinance will have to go before voters in a special election before the lease becomes official. The election will likely take place sometime in August.
The ordinance also has to pass the assembly. It’s introduction was approved by the group Thursday in a 5 to 1 vote. Gary Hanson voted against it.
The new lease would void the current one in effect until 2023. The new arrangement would reduce the amount of property at the port that White Pass controls. It would allow the city access to more of it for the Gateway Port Expansion Project.
The lease would last 35 years. It would apply to the land directly below the ore dock. White Pass payments to the city would start at a quarter million dollars a year and increase $25,000 every five years up to $400,000. The company currently pays $127,000 a year for its port lease.
White Pass currently sub-leases some of the property to seven other companies. Under the new lease, those contracts would eventually revert to the city, with White Pass still receiving the revenue from the leases for the next seven years.
The company and city also agree to share the costs of building a new floating dock. That dock would accommodate a new, larger class of cruise ships. White Pass will continue receiving revenues from cruise ship operations on the south end of the ore dock and floating dock. The city would get any revenue from industrial or non-cruise use.
Finally, in perhaps the most contentious part of the agreement, White Pass agrees to pay $2 million toward the remediation of the ore basin. Clean-up of the port from previous ore contamination is the main goal of the Gateway Project’s first phase. But the cost for that clean-up is uncertain and by some estimates expected to cost several million. Some critics of the new lease say $2 million isn’t enough of a contribution by White Pass for that part of the project.
The assembly plans to hold public meetings on the lease but those have yet to be set. The assembly will discuss the lease ordinance at its July 6th meeting.
