Skagway leaders move toward 15-year waterfront lease, but some hurdles remain

A Disney cruise ship tied up at Skagway’s ore dock. (Photo by Emily Files/KHNS)
A Disney cruise ship tied up at Skagway’s ore dock. (Photo by Emily Files/KHNS)

Skagway leaders are moving ahead with a new 15-year tidelands lease proposal and they’re hoping to get it to voters this October.

The Assembly put some tough questions to the White Pass and Yukon Route Railroad president at a public meeting Thursday.

The executive told them the railroad is willing to compromise on some things, but it needs a 15-year lease guarantee.

The urgency driving this conversation comes from Skagway’s need for a new floating dock.

The dock would allow the cruise ship-reliant town to keep up with bigger boats arriving in 2019.

White Pass Railroad leases most of the port. In order to cooperate on the floating dock, it wants a 15-year new lease that would pick up after the current one ends in 2023.

“The only agenda we have it toward a mutually beneficial conclusion,” said White Pass President John Finlayson, who was at the Thursday meeting.

Orion Hanson asked Finlayson if he would be willing to tie contamination cleanup in the ore basin to the current lease. Meaning, the cleanup would happen in the next five years. Finlayson said yes.

He also said OK to the city capping its financial contribution to the cleanup at $1.5 million.

But when Jay Burnham asked whether White Pass would look at just the floating dock, without the new lease, Finlayson said no.

“Could we talk about just that floating component?” Burnham asked.

“Jay, look, we’ve had this conversation before,” Finlayson said. “We put forward what we think is a benefit to White Pass. We also think it’s a benefit to the city.”

That seemed to get through the Assembly. They made some changes to the proposal, but none to the 15-year term.

Previously, the Assembly voted for the city to take over as cruise terminal operator during the new lease.

Hanson moved to reverse that decision.

“It is a non-starter for White Pass,” Hanson said. “So this is a concession.”

On the motion for White Pass to continue as cruise terminal operator, the Assembly was split: Hanson, Tim Cochran and Steve Burnham Jr. voted yes. Jay Burnham, Spencer Morgan and Monica Carlson voted no.

Mayor Mark Schaefer broke the tie in favor of the motion.

Throughout weeks of discussion on this new lease, the Assembly has agonized over whether it’s a good deal for Skagway.

Hanson brought up one part that he thinks is a major benefit: after the 15-year lease, the city will be able to take over the Broadway and ore docks without having to pay millions of dollars.

“What we really get here is a path to where we own our assets and our waterfront,” Hanson said.

In the new lease proposal, there is a schedule for how much the city would have to reimburse White Pass for capital improvements to the property. It starts at 10 percent in 2029, up to 100 percent if the improvements happened in the last year of the lease.

The Assembly also voted to add language giving the city authority to regularly inspect the leased area and to deny a proposed sale or transfer of the lease.

The group also agreed to wording requiring White Pass to obtain a surety bond to hold the company accountable for contamination cleanup.

The city negotiating team will take these changes to White Pass. Then, the Assembly will continue the discussion at a special meeting Aug. 9.

It’s still not a given that the Assembly will agree on the 15-year lease. Jay Burnham and Monica Carlson have been especially skeptical.

“I keep hearing everybody saying ‘it’s a nonstarter for White Pass, it’s a nonstarter for White Pass,’” Carlson said. “Well, excuse my French, but what’s a nonstarter for the city? We need to take a little more gumption and effort and get what we want.”

So, there’s the question of Assembly approval. Then there’s the question of whether they’ll be fast enough to put the lease question on this October’s election ballot.

The deadline is Aug. 17, though the clerk said she could maybe stretch that a little bit.

And perhaps the biggest question is whether the lease will pass a public vote.

Steve Burnham Jr. said he was having flashbacks to 2015, when voters rejected a 35-year tidelands lease.

“Are we getting the message out? Or are we going to be perceived as ramming it down their throat?” Burnham asked.

But Hanson pointed out that this time around, most of the lease discussions are happening in public, instead of behind closed doors. He said if people are not paying attention, they should be.

KHNS - Haines

KHNS is our partner station in Haines. KTOO collaborates with partners across the state to cover important news and to share stories with our audiences.

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