Ketchikan Assembly delays decision on taxing shipyard

The Ketchikan Shipyard, operated by Alaska Ship & Drydock, is one of the more visible parts of Southeast’s “blue economy.” (Ed Schoenfeld/CoastAlaska News)

A proposal to charge the Ketchikan Shipyard property tax or an equivalent payment in lieu of taxes was postponed Monday by the Ketchikan Gateway Borough Assembly.

The proposal was submitted by Harlan Heaton, who spoke during public comment on Monday.

Vigor Industrial makes a lot of money from its various shipyards, and should pay property tax in the community, Heaton said.

Heaton said he pays property tax on commercial property that doesn’t yet make any money.

“I’m being told, with no uncertain terms that ‘You will pay that tax or we will come out and break your legs.’ They have no problem doing that,” he said. “It’s a common term: ‘Where is the hammer? Where is the hammer that we make the citizens behave?’ The hammer is, they come out and take my property.”

The Ketchikan Shipyard is owned by Alaska Industrial Development and Export Authority, and is managed by Vigor Industrial.

It’s exempt from property taxes because it’s owned by the state.

But, the State Assessor has determined that exemption is optional, and therefore has included the shipyard in the borough’s taxable property value, which affects how much the borough is required to provide for public schools.

Whether the property tax exemption is mandatory or optional is pending a court ruling. Because of that pending decision, Assembly Member Judith McQuerry made the motion to postpone until mid-May. That motion passed unanimously.

Also Monday, the Assembly spent a lot of time on a proposed ordinance that would have established regulations for natural resource extraction. Quite a few developers and logging industry representatives pointed out problems with some of the proposed regulations.

Planning Director Chris French told the Assembly that his office has requested the Assembly send the ordinance back to the Planning Commission for review.

Assembly member Mike Painter made a motion to indefinitely postpone the item, which means it won’t return for consideration unless an Assembly member specifically requests it.

Painter said there already are numerous regulations, state and federal, that cover resource extraction. He also suggested that such an ordinance would affect a pending federal land trade with Alaska Mental Health Trust Authority.

McQuerry, though, disagreed.

She argued that the people who spoke against the ordinance said they were willing to work with the borough to improve the language.

“I think that it would be a good idea to let everybody have a chance to work together on this rather than kill it outright,” she said. “And, Mr. Painter, I’m not sure if we refer it back to planning and zoning that that really will affect the land swap.”

McQuerry was in the minority.

The motion to postpone indefinitely passed 4-2 with McQuerry and Assembly member Felix Wong voting no.

The land trade would swap Alaska Mental Health Trust land, including Deer Mountain, for U.S. Forest Service land on Prince of Wales Island and in the Shelter Cove area.

Mental Health intends to use the land for timber harvest.

Editor’s note: KTOO’s building sits on land leased from the Alaska Mental Health Trust Authority. KTOO has also applied for and received occasional grants for special reporting projects from the authority.

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