Dyea campground host cabin in Dyea, Alaska. Photo by Mike Swasey.

A state judge has put the use of Skagway’s municipal campground host cabin in Dyea on hold pending a legal challenge by nearby lodge owners. The cabin can’t be used until a permitting issue for the 320 square foot structure is resolved.

The municipality of Skagway constructed the cabin inside the Dyea Flats Municipal Campground last fall using CARES Act funding. The municipality also offered that cabin, a little over nine miles from the historic downtown, up for nightly rentals last winter for $50/night. The nightly rentals were later canceled because of the threat of a lawsuit. The assembly then passed a resolution to make the cabin available free of charge between mid-October and mid-April.

Fred and Kathy Hosford of The Chilkoot Trail Outpost say that the cabin would directly compete with their nearby lodging business, and was built without proper permitting.

The judge, Daniel Schally, issued a preliminary injunction last week ordering that all use of the cabin stop immediately.

According to court documents, the municipality of Skagway failed to prove that proper permitting had been acquired, and also failed to show how municipal code should offer an exemption to the usual permitting process.

The Hosford’s Anchorage-based attorney Stacey Stone sees this as a win.

“We’re very pleased with the court’s decision that was issued with regard to the preliminary injunction. We believe that it’s a basic constitutional matter of fundamental fairness that the government follow its own rules, and not just require its citizenry to follow its rules,” said Stone.

But, the judge did not rule in favor of the Hosford’s claims that the cabin presents an undue financial burden upon their business. That means that if the municipality resolves the permitting issues, the cabin would once again be usable.

According to municipal code, before beginning construction on any project, a building permit is required. Also because of the cabin’s location on the Dyea Flats, a conditional use permit would be necessary. 

Additionally, according to the state fire marshal’s office, a fire marshall review is necessary if the building is to be used as an office, or if it is to be rented out on a nightly basis, regardless of the cost of the rental.

The planning and zoning commission meets next on October 15. That’s where the municipality can make the case to obtain the building and conditional use permits. The fire marshall’s review would be conducted through the state office in Anchorage.

The Hosford’s attorney Stacey Stone says if the case is ultimately successful, the couple could be entitled to some money.

“There are statutes in Alaska that provide for prevailing parties to recoup their attorney’s fees,” said Stone.

Or if the permitting is not achievable, the cabin might need to be removed.

Skagway’s borough manager Brad Ryan and the Juneau-based attorney for the municipality Robert Blasco both declined to comment.

The next phase of the lawsuit will be the discovery phase in which both sides will be asked to produce documents that could be used as evidence in the case.