A Disney cruise ship tied up at Skagway’s ore dock. (Emily Files)
In the last month, waterfront lease talks in Skagway have taken a new direction. The assembly suspended current lease negotiations with White Pass and Yukon Route Railroad after receiving a new proposal from a cruise company. Skagway is receiving some pushback from White Pass and another cruise line.
White Pass President John Finlayson responded to halted waterfront lease negotiations with the city at the most recent assembly meeting.
“We’re very disappointed to receive that letter. Especially since it was a city that reached out to us to request that we come forward with an offer,” said Finlayson. “We had an MOU which the city voted on in favor, 5-1. We feel that although the relationship between White Pass and the city over the past 50 years hasn’t been perfect and has had its bumps in the road, it’s also helped the city’s economy to get to an unprecedented place.”
In January, the assembly passed a non-binding memorandum of understanding with the railroad. That set the stage for a new waterfront lease with the company.
But, a month later, the Holland America Group sent Skagway a letter, proposing an economic partnership. Holland America is suggesting forming a joint venture with the city to lease and manage two of the municipality’s docks and their tidelands.
The company says it’s prepared to fund the partnership with up to $20 million right away, and revenue would be shared between the joint venture partners.
White Pass’s current lease is up in 2023.
With this new offer on the table, the assembly decided to suspend the current MOU and lease talks in order to explore other possibilities.
Assemblyman Dave Brena voted in favor of suspending talks with White Pass back in March. In a statement, he wrote “although it is only a letter of interest, the terms, suggested payments, and conditions broadly represent an offer in excess of $40 million more than the White Pass MOU.”
Finlayson warned of altering the current relationship between the two groups.
“It’s always a risk to change a relationship like that,” said Finlayson. “I’m hopeful that the assembly and the mayor understand what those risks are and are prepared for the future if it involves a relationship that doesn’t involve White Pass.”
He said White Pass still wants to work with the city.
Skagway’s assembly and mayor have also received pushback on the proposed partnership with Holland America from another cruise company.
In a letter from March, the President and CEO of Norwegian Cruise Line Holdings says the company is concerned about an arrangement that would provide “any cruise line company a controlling influence in the Port of Skagway.”
Norwegian Cruise Line includes the 4,000 passenger Norwegian Bliss, sailing to Skagway for the first time this summer.
A new generation of megaships like that one are one of the main reasons these talks are happening now. Skagway needs to renovate its port to accommodate larger boats headed up Lynn Canal in coming years.
The municipality is still just exploring its options.
A special executive session on waterfront issues is scheduled for Thursday, April 12 in assembly chambers.
