Skagway Assembly frustrated by disagreements with White Pass on potential lease

Tourists in Skagway take pictures with a White Pass and Yukon Route Railroad train car. (Photo by Emily Files/KHNS)

Tourists in Skagway take pictures with a White Pass and Yukon Route Railroad train car. (Photo by Emily Files/KHNS)

Some Skagway leaders are growing frustrated with what they see as an unproductive back-and-forth with White Pass and Yukon Route Railroad.

What started as a hopeful process aimed at a new tidelands lease has now turned into something close to a stalemate.

At the latest Skagway Assembly meeting, members were unsure how to move forward.

The talk at Thursday’s meeting cast doubt on whether the city and railroad will be able to reach a tentative agreement at all.

“I’m kinda at a loss at this point,” outgoing Assembly member Spencer Morgan said. “What I see White Pass doing and what I see on paper coming back is really taking out a lot of the protections the municipality has asked for.”

In late September, the Assembly made changes to a working memorandum of understanding. The memorandum would make way for a new 15-year tidelands lease with White Pass. But then White Pass sent back its edits to the document, and the changes the railroad proposed were disheartening for the assembly.

White Pass crossed out a line about working with the city as joint cruise terminal operators.

The company added in a paragraph about easements that the Assembly wanted to outline in a separate contract. It also reinstated wording saying the city cannot unreasonably withhold a sale or transfer of the lease.

Those are just a few of the changes that bothered Assembly members.

“What White Pass responded with this time, it’s definitely regressing,” Assembly member Orion Hanson said. “I think we probably should just get what we’re very comfortable with …and the way that we want to see it done, and if White Pass doesn’t like that, then I guess there’s not an MOU.”

The major motivation behind all of this is a new floating dock.

Cruise industry leaders told Skagway it would fall behind if it doesn’t install a new dock for bigger ships by 2019.

But Skagway can’t just go ahead and build it.

White Pass controls the tidelands in question for another five years. The railroad said if it gets a new lease, then it will cooperate on the floating dock.

The city has been working on a request for proposals to start design work on the floating component. But manager Scott Hahn said the city shouldn’t advertise the proposals request until they know whether they even have access to the area.

“You don’t want to spend any more of your money on engineering that doesn’t yield results,” Hahn said. “I’m really concerned about going out to bid before having a fairly good idea of we can get in there.”

Hahn referred to the recent election results, and said they could move Skagway further away from a White Pass agreement.

Monica Carlson and David Brena, two lease opponents, were elected mayor and assembly member. Dan Henry won the Assembly second seat. He supported a previous lease proposal.

The Assembly decided to prepare the request for proposals so it’s ready to go to bid if the access situation becomes more clear.

Here’s another layer of the port conundrum: White Pass could be sold.

A June news release said the railroad’s parent company, ClubLink, is conducting a review of White Pass which may include selling the business.

White Pass operates primarily as an excursion for cruise visitors. And there’s been speculation about whether a cruise line might buy the railroad.

White Pass and ClubLink officials did not return requests for comment on this question.

Hahn addressed the concern at Thursday’s meeting.

“I do see situations, however extreme, if a cruise ship company bought the railroad company, and decided to play around with the schedules, to say, “Well, it’s just not profitable to have them operating on Thursdays and Mondays so we’re gonna shut those days down,”” Hahn said.

In light of the concern about a potential cruise line monopoly on the docks, the assembly is amending municipal code to try to ensure a fair marketplace.

The Assembly referred the code changes to the port commission.

As for the tidelands memorandum on which so many questions hinge, the Assembly did not decide on a next step.

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