A Disney cruise ship tied up at Skagway’s ore dock. (Emily Files)
The conversation about the future of Skagway’s waterfront is taking a new turn. The city is exploring an economic partnership with a cruise company and suspending negotiations with White Pass and Yukon Route Railroad.
Assemblyman Orion Hanson was on the team negotiating with the railroad. He voted against suspending lease talks.
“The MOU we had with White Pass was a fair deal and a good deal,” says Hanson. “By ending all negotiations I think we have really hamstrung ourselves from being able to move forward with building a dock – I don’t see that happening here in the next two years, three years – or it’s going to be very difficult to get that accomplished without White Pass’s cooperation.”
What changed in the last few months? The Holland America Group entered the conversation.
In February, the company sent the city a letter, proposing an economic partnership. Holland America is suggesting forming a joint venture with Skagway to lease and manage two of the city’s docks and their tidelands.
The offer suggests Skagway lease the waterfront properties to the joint venture for 15 years, starting in 2023.
That’s the year that the city’s waterfront lease with the railroad ends. In January, the assembly finalized a non-binding agreement with the company. Among other things, it made way for port improvements and a new lease. Port renovations are needed to accommodate larger cruise ships headed to Alaska.
Holland America says it’s prepared to fund a partnership with up to $20 million right away. The offer says revenue would be shared between the company and Skagway.
In light of this new proposal, the assembly voted 4-2 at its last regular meeting to send a letter to the railroad, suspending negotiations and the current MOU.
Assemblyman Steve Burnham Jr., who voted in favor of the action, says the Holland America deal would likely be more appealing to voters.
Still, Burnham says the city can’t just accept an offer like the one from Holland America. Borough code says Skagway would have to put out an official request for proposals.
Assemblyman Dave Brena also voted to suspend talks with White Pass. He wrote a two page statement about the decision. In it, he writes “although it is only a letter of interest, the terms, suggested payments, and conditions broadly represent an offer in excess of $40 million dollars more than the White Pass MOU.” Brena describes two choices moving forward. He says the municipality could manage and operate the waterfront itself. Or, he says, the city could put out a request for proposals.
Mayor Monica Carlson says no matter what the railroad won’t be removed from the conversation.
“We do need to work with White Pass,” says Carlson. “And White Pass will probably need to work with us to ensure that a dock is in place by 2020. They do have five more years on their lease. So we need to be partners moving forward in the next five years.”
White Pass representative Tyler Rose says the company doesn’t have a clear response yet – they haven’t received official notice from the city. No matter what, he says the railroad will remain an important player on the waterfront.
“We’re absolutely part of the port,” says Rose. “We have the existing lease for the next five years. We own the other two docks on the other side. White Pass will be part of the port regardless moving forward, short term and long term. In what capacity and in what amount is really the question.”
The city will be able to accommodate bigger cruise ships sailing to Skagway this summer. White Pass made changes to another dock to ensure that. Still, bigger changes need for that to remain true in subsequent years.
Carlson says the assembly will likely discuss next steps at the next regular assembly meeting, April 5.
Editor’s note: This story was updated to include comments from Assemblyman Dave Brena.
