Popular tourist train company White Pass and Yukon Route Railroad warned Skagway to renew its waterfront lease or be prepared to pay compensation.
A letter from White Pass and Yukon Route Railroad’s attorney to the municipality says Skagway should halt its work to solicit others to manage the area that’s been controlled by the railroad since the 1960s.
This fall Skagway’s assembly declared its intent to take over the municipal port after 2023 and solicit proposals for the area that includes three deep-water docks that berth hundreds of cruise ships each summer.
Skagway voters rejected White Pass railroad’s bid to renew the lease in a 2015 referendum.
White Pass attorneys argue the railroad invested substantially in dock infrastructure. They cautioned the municipality could be on the hook for paying for these improvements, but didn’t cite a legal basis for the claim.
The letter says Skagway must give the railroad the option to renew the lease before the municipality pursues other partners. Under the current lease, the railroad pays $127,000 a year.
Since 2018, the railroad has been owned by a holding company that includes Ketchikan-based Survey Point and outside investors including Carnival Corporation.
Neither the municipality nor the railroad’s attorney would comment. The municipality has yet to respond to the Nov. 8 letter.