The Skagway Assembly took a step forward at a meeting Tuesday in waterfront negotiations with White Pass and Yukon Route Railroad.
The group unanimously approved a draft memorandum of understanding with the private company.
But, the next day, the mayor put on the brakes.
“I’d like to make a motion that we accept the MOU as has been amended this evening, to present to White Pass for their consideration,” Assemblyman Dan Henry said.
The motion passed unanimously, moving forward a draft of an agreement the municipality and railroad have been working on for several months.
The memorandum of understanding would make way for important port improvements and a new, 15-year, tidelands lease with White Pass.
Mayor Monica Carlson vetoed that motion in an email to the borough clerk the next morning.
Carlson did not respond to a request for comment by the time this story was reported, but in her email, she said this:
“The new information regarding the AIDEA Lease has not been addressed in the MOU. This information has financial and potential immediate impacts to the Citizens of Skagway. It is OUR responsibility that due diligence be complete. It is not prudent to proceed into further negotiations without additional legal counsel.”
By AIDEA, Carlson is referring to the Alaska Industrial Development and Export Authority.
AIDEA purchased the Skagway Ore Terminal nearly three decades ago. They sublease property from the city, through White Pass. There is uncertainty around the future of AIDEA’s involvement on the waterfront.
Cleanup of the ore basin is an important part of lease negotiations.
At the Assembly meeting, Carlson said she’d met with AIDEA representatives recently.
She said the company isn’t planning to extend its lease past 2023. Carlson said the uncertainty is concerning.
“I don’t know if it belongs in this MOU or if it should be something different, but who will be responsible for the ore terminal and the cleanup,” Carlson said. “And are we ready to assume this responsibility or should we include language that the ore terminal and grounds be remediated, torn down, or what are discussions going to be about that.”
From AIDEA’s perspective, the future of its lease is unclear.
But Jim Hemsath, with AIDEA, said part of that comes from the organization feeling the city has pushed it away by not acting on a draft lease it presented a few years ago.
A description of the Skagway Ore Terminal project on AIDEA’s website says the lease expires in 2023 and it will not be renewed.
Hemsath said things could change in the future.
Carlson’s concerns about AIDEA, and what it could mean for the city if it didn’t renew its lease, led to the veto. At the assembly meeting, Steve Burnham Jr. pointed out the non-binding nature of the MOU.
“The lease also needs to be passed by the assembly,” Burnham said. “An MOU is not a binding agreement.”
“Right, but it’s in the MOU, so we might have to remove that section out of the MOU before it goes to a lease, as well,” said Carlson. “Because that is something that is something that is in the MOU that we will take over that lease, the way I’m looking at it.”
For right now, the memorandum with White Pass is on hold.
Assemblyman Tim Cochran, who has been on the negotiating team with the railroad, said he was “a little shocked” by Carlson’s veto, given the unanimous vote of the Assembly.
He’s hopeful the process will keep moving forward.
White Pass official Tyler Rose said he’s “a bit disheartened” by the mayor’s action.
He was hopeful the document would be moved forward at the beginning of the Assembly meeting.
David Brena voted in favor of moving the MOU forward despite his belief that it’s not the right move for the municipality. He believes the city should control the waterfront. The veto “is prudent and a necessary step prior to finalizing the MOU,” he said in an email to KHNS,
Based on Skagway municipal code, the veto could be overridden by a two-thirds vote of the Assembly.
What will happen next is unclear.