Skagway Assembly continues work on MOU with White Pass and Yukon Route Railroad

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

The Skagway Assembly met for the second time this week to review a document that could provide a way forward on port improvements.

The group made some notable edits to a memorandum of understanding with White Pass and Yukon Route Railroad.

The agreement would make way for important waterfront improvements and a new 15-year tidelands lease with the private company.

Assemblyman Orion Hanson is one of the Assembly members who’s been negotiating with the railroad since discussions re-started earlier this year.

He suggested amending the memorandum to make White Pass responsible for the full cost of a new floating dock, instead of splitting it with the municipality.

“I’m looking for a solution to where we’re pushing forth the issue,” Hanson said. “Also this greatly speeds up the ability to get this dock done. Because White Pass can build this cheaper than we can. And they can probably get it permitted if not faster, than at least as fast without the red tape that we incur as a city.”

Hanson suggested the municipality contribute the $7.5 million that would have been spent on the floating dock to the roll-on, roll-off portion of the structure or other improvements to the ore dock basin.

The floating dock is needed to accommodate larger cruise ships in coming years.

The Assembly approved the amendment in a 5-1 vote.

White Pass official Tyler Rose said this is an option the company is entertaining right now.

But he said there needs to be more discussion.

Rose said White Pass is planning separate improvements for the railroad dock, to make room for bigger vessels in 2019.

He’s hopeful the Assembly will adopt the MOU and send it to the negotiating committee.

The Assembly accepted several changes recommended by the borough’s attorney that provide incentives for the railroad to complete cleanup and remediation of the ore basin.

The Assembly adopted a change that says a new lease will not happen if that cleanup doesn’t conclude by the end of the current agreement in 2023.

In the current draft of the MOU, the ore basin has to be removed from the Alaska Department of Environmental Conservation’s list of contaminated sites.

The changes to the MOU would also make way for liquidated damages if the cleanup isn’t completed, or in the event of future contamination.

Assemblyman Jay Burnham moved to make another amendment, looking ahead to the future of the other side of the port – the railroad dock.

“Seeing as how we’re kind of moving toward purchasing all – or acquiring – the tidelands, that’s a prime chunk of tidelands that we should look at acquiring in one way or another,” Burnham said.

Burnham suggested adding a section to the MOU that would give the municipality the right of first refusal to either purchase or acquire the railroad dock and tidelands under it, if White Pass is sold.

Hanson pushed back.

“I think that becomes a real imposition to the spirit of this MOU at that point because we are forcing them to sell something to us in the event that they make a business decision as part of an asset that then breaks up what they’ve been doing for over 120 years.”

The addition passed after Mayor Monica Carlson broke a tie vote in favor of the action.

Carlson favors the municipality controlling the port. Reading a statement at the start of the meeting, Carlson told the assembly there are other ways forward besides a new lease.

“White Pass is not our only option going forward,” Carlson said. “Going forward, we don’t know who will own White Pass and who we are negotiating with tonight. We can continue tonight or we can stop it now, tell White Pass we will work in partnership with them until 2023, at which time we will have control of our future. The port is the golden key that unlocks the future for Skagway.”

The Assembly voted to send the amended draft MOU back to the borough attorney to review. They’ll take it up again at the next regular Assembly meeting.

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