The Skagway Assembly has passed what they hope is a final draft of a memorandum of understanding with White Pass and Yukon Route Railroad over the future of Skagway’s waterfront.
But after last-minute amendments, White Pass will still need to give it a final review.
After months of drafting and negotiation, the Skagway Assembly has agreed to an MOU with the railroad — almost.
At the first meeting of the new year, the MOU passed with a 5-1 vote, but the Assembly made changes to the draft that White Pass agreed to: re-inserting Skagway’s right of first refusal to buy the Railroad if it’s put up for sale.
Assembly member Steve Burnham, Jr. thinks it’s worth preserving that option for voters.
“It would be a worthwhile venture should we at least just look into it. It’s pretty clear they support us getting as much control as we can on our waterfront. It’s a decision that a future assembly is going to make. But it’s another option,” Burnham said.
The amendment was not unanimous. Orion Hanson was one of two members to object, citing expense and previous conversations with White Pass.
“They’re not comfortable giving that option. It was pretty much a flat no. We went there, we negotiated, we tried. If this is where the line in the sand is drawn — about an option to do something we could probably never afford to do — then man, we have wasted a good year,” Hanson said.
Assembly members estimated buying the railroad would cost around $200 million. Yearly revenue for company’s port, retail, and railroad operations were about $43 million last year. Skagway’s budget this year is about $2.8 million.
The road to finishing the MOU has been rocky. After approval by the assembly, it was vetoed by the Mayor, before the assembly overturned the veto and sent the draft to White Pass for review. White Pass made a few changes — including removing the right of first refusal that the Assembly now wants to keep in.
If passed, the new MOU will lay the foundation for an agreement between the city and the company for Skagway’s waterfront. White Pass’ current lease is set to expire in 2023. An effort to extend the lease failed at the ballot box in 2015.
In 2016, the city found out the legacy ore dock requires renovation to accommodate a new generation of giant cruise ships headed for Skagway as soon as this summer. But the Railroad company controls that property. It wants a guarantee that its investment will last past 2023 before funding renovations.
The MOU is intended as a compromise: it lays out legal and financial responsibilities for the city and White Pass to remodel the dock and dredge up old contaminants. It provides White Pass assurance that the city will send a new 15-year-lease to the ballot, though voters will still have to approve the new terms.
And not all assembly members feel like that’s a guarantee. Dave Brena was the sole vote against passing the draft MOU.
“The similarities between the 2015 lease and this lease proposal are in my opinion, not very different. The MOU is shorter, but it’s still pretty long — it’s 15 years long. The revenue offered by White Pass within the same term is within 50,000 of the prior lease proposal,” Brena said.
But that vote is still a long ways off. For now, Mayor Monica Carlson says, it’s time to send the MOU to White Pass for review again — it still needs their stamp of approval before an official lease can be drafted and put on the ballot.