Skagway’s city hall and museum. (Greta Mart)
The Municipality of Skagway is still working to figure out how much White Pass and Yukon Route Railroad should pay to lease its waterfront land. Every 5 years the lease rate is adjusted based on the appraised value of the property. However, two appraisals solicited by the municipality last year calculated dramatically different values for the waterfront.
Now the municipality is considering whether to solicit a third appraisal.
Horan and Company’s most recent appraisal of Skagway’s waterfront listed its value at $2.2 million. But a review of the appraisal by Integra Realty Resources found that Horan and Co. undervalued the land. Integra carried out its own appraisal, which listed the waterfront’s value at $14.7 million.
At a meeting Thursday, Vice Mayor Tim Cochran said that the assembly had reached a stalemate.
“We’re at an impasse with the appraisals. The Horan appraisal was never adopted and the Integra was not adopted. Where do we go forward?” Cochran said.
While the Horan appraisal would increase White Pass’ rent to $132,000 a year, the Integra appraisal would increase the lease rate to $882,000. They are currently paying about $127,000.
Horan and Co. appraised the waterfront based on the value of the land as it existed in 1968. Integra included the value added by improvements made to the property since the lease began.
White Pass defended the original Horan appraisal, saying that it uses methods consistent with the past 50 years of lease rate adjustments. But some assembly members think that the lease rate is far too low.
In a letter to White Pass, the Municipality of Skagway suggested that a third appraisal is carried out by a mutually agreed upon appraiser to resolve the disagreement.
In his response back, White Pass President Bob Berto repeated his request that the assembly adopts the original Horan appraisal instead.
According to Assemblyman Steve Burnham, the municipality can only adopt an appraisal carried out within the last six months. Both the Horan and Integra appraisals were completed over six months ago.
Assemblymen Dave Brena and Jay Burnham suggested that the municipality order an updated appraisal from Integra for the assembly to reconsider.
The assembly voted to postpone a decision on whether or not to update the Integra appraisal until the next assembly meeting.
