White Pass and Yukon Route Railroad controls much of the tidelands the municipality needs to access for port improvements. (Greta Mart)
Voters will have the final say on a proposal that could dictate the future of Skagway’s waterfront for the next 20 years.
At a meeting Wednesday, the Skagway Assembly worked through a draft waterfront agreement with White Pass and Yukon Route Railroad. The two parties on are on track to negotiate an extension of the railroad’s tidelands lease.
When White Pass presented its new lease proposal in June, one of the big questions was whether it would go to a public vote. Skagway code says leases worth $5 million or more must be ratified by voters.
That requirement delayed port progress two years ago, when voters threw out a 35-year lease extension.
Residents have encouraged the assembly to put this proposal to a public vote as well, especially since the mayor and half of the assembly members are employed by White Pass.
“Any new lease should pass the muster of the people,” said Steve Burnham Jr.
Orion Hanson said he worried that history could repeat itself. What would happen if voters rejected this lease extension too? Skagway might lose a share of the cruise market. That’s because without the lease, White Pass might not cooperate on a floating addition to the ore dock to accommodate larger ships.
“That said, I want to live here a long time and I don’t want to walk down the street and have everybody despise me,” Hanson said. “I also think this town can have wisdom to make good decisions. I think what we’re gonna propose now, in the coming weeks, will pass.”
The assembly unanimously voted to send any new lease with White Pass to a public vote.
The deadline to get a question on the October election ballot is Aug. 17. The assembly could also call for a special election at a later date.
The lease proposal on the table is similar to the old one in many ways. It extends White Pass’s control over the ore and Broadway dock tidelands past 2023, while relinquishing uplands and subleases to the town. The municipality and White Pass would share the cost of ore dock renovation and contamination clean-up.
White Pass proposed a new 20-year lease that would take effect after the current one ends in 2023. The assembly agreed to counter with a shorter term, but there was disagreement about whether it should be 10 or 15 years.
“I think 10 years is enough for them to [realize] their investment [in the ore dock renovation,] said Jay Burnham. “They’re making millions on the dock.”
“Actually I’m pretty sure they’re gonna go, ‘10 years ain’t long enough,” Steve Burnham said.
The motion on the table was to counter the railroad’s 20-year offer with 15 years. The assembly was split 3-3. (Steve Burnham, Hanson and Tim Cochran voted yes and Jay Burnham, Monica Carlson and Spencer Morgan voted no.)
Mayor Mark Schaefer broke the tie in favor of the 15-year proposal. That means the deal would end in 2038.
The assembly was in agreement on other items, including raising White Pass’ annual rent payments to $250,000 until 2023. After that, rent would increase by 3.5 percent each year.
The assembly also agreed the municipality should take over as the cruise terminal operator starting in 2023.
There are still some major details to work out, like how much revenue the town should get from cruise operations at the renovated ore dock and cost-sharing for environmental clean-up. And of course, all of this could change in negotiations with the railroad.
Port commissioner Tim Bourcy said with some changes, a 15-year extension might be worth it.
“I think in some ways you might have to consider that it might be a natural progression that would allow us to take over sections of the port as we grow and develop,” said Bourcy. “Without having the financial disruptions that might come to the port associated with not having a lease or not having a new floating dock.”
Borough manager Scott Hahn said even though there is a pressing deadline to deal with the cruise ship floating dock, the assembly should be thinking about the big picture. He said if the town eventually wants a different business model for the port, it needs to keep that in mind during these discussions.
