A Disney cruise ship tied up at Skagway’s ore dock. (Emily Files)
During municipal elections on October 4, 2022, Skagway residents will vote on a proposition that would allow the municipality to access up to $65 million for port improvements. Municipal leaders hosted a town-hall meeting to explain their plan to pay for the loan on Thursday night. But as KHNS’ Mike Swasey reports, a group of residents hosted their own gathering on Tuesday night asking the community to vote no.
When Skagway voters make the decision about Proposition One in October, it will ultimately determine whether to improve the waterfront sooner or later. If the proposition passes, the municipality plans to immediately access up to $6 million to expand the berth at the Ore Dock to allow Post-Panamax size cruise ships to dock there as part of an effort to allow for four ships to visit on any given day next year.
If the proposition fails, municipal officials say that plan would be put on hold. They would then have to figure out a way to pay for the $12 million floating dock they already ordered for their long-term improvement project, plus they would be on the hook for $2,400 a day in storage fees for that dock beginning August 23, 2023.
Proposition One calls for the adoption of a Revenue Bond that could produce as much as $65 million for any port improvements. But, as Borough Manager Brad Ryan said in the town hall meeting on Thursday night, the bond isn’t tied to any specific project.
“This bond isn’t specific to the dock we designed. It can change. In fact, the bond bank recommended we don’t make it too specific because there will be nuances and changes,” said Ryan.
If adopted, the municipality would have access to the funds, but would not have to start making payments until they are actually used. For example, let’s say the municipality used $1 million to upgrade a dock for next year and that’s the only improvement they made using Revenue Bond funds. They would then need to start repayment only on that $1 million.
Repayment would be made from revenue generated by the port, not by taxpayers. Cruise ships would be the most significant contributors as they pay a fee every time they dock in Skagway, plus they pay a separate fee per passenger.
The municipality released its financial plan after its town hall meeting and used earnings estimates based solely on cruise ship-generated revenue expectations. Those estimates say next year roughly $13.5 million dollars will be generated by cruise ships on the Ore and Broadway docks increasing by about a half million dollars each subsequent year. They also estimate that if they use the entirety of the $65 million revenue bond, the repayment each year would be about $4 million. That would leave a net gain of several million dollars each year.
Additionally, revenue will be generated by Ore Terminal users, fuel and freight operators, and any companies leasing waterfront property.
The municipality has been working with design firm KPFF for over a year on a long-term plan to upgrade the Ore Dock into a multi-purpose facility. Their design, which is now 30% complete and scheduled to be at 60% by the end of the year, would allow for a large Post-Panamax size cruise ship with 4,000 passengers to dock at the same time as an ore, fuel, or freight barge. That plan is subject to change and isn’t on the ballot in October.
But there’s a group of residents in Skagway led by a former President of White Pass and Yukon Route, Paul Taylor, that are asking voters to cast a no vote on Proposition One. Taylor told KHNS that he doesn’t agree with the KPFF design plans. He says he has a concept that allows for more cruise ships to dock at the Ore Peninsula, though freight and fuel barges would not be able to dock while all of the cruise ships are in port.
“Our vision of the port development in the Ore Terminal basin calls for three ships in that basin,” said Taylor.
Taylor has a conceptual drawing and initial cost estimates based on his previous experience on Skagway’s waterfront. His group’s estimate for potential earnings using the KPFF long-term design are far lower than the municipality’s. Taylor also discussed a short-term plan to save the 2023 season that closely resembles the plan agreed to by White Pass and the Municipality, but would cost three times as much. His concept calls for deep water dolphins to be used to extend the Ore Dock southward. A spokesperson from Royal Caribbean Cruise Lines told KHNS via email that “permitting for a new greenfield project is expected to take a minimum of 18-24 months and up to 36 months.” Though another representative said improvements like deep water dolphins added to an existing structure could potentially be expedited to resolve in closer to 12 months.
Taylor told KHNS that his plan would also need to be paid for with Revenue Bonds, his concept would likely cost at least $100 million, and he has no timeline for when it could be completed.
The vote on October 4 is about funding for improvements to the Ore Peninsula which both parties agree are necessary.
