‘We’re back to square one’: Sitka seeks private capital for public haulout after denial of federal grant

Sitka’s industrial park, where the new haulout would be built. (Photo courtesy of Gary Paxton Industrial Park)

Plans to build a new marine haulout facility in Sitka have ground to a halt. The multi-million dollar federal grant anticipated for the project did not come through, forcing the City of Sitka to cast its net for private sector funding.

A lot was riding on the $6.5 million BUILD grant from the U.S. Department of Transportation, which Sitka applied for back in May. It would have covered 80-percent of the estimated costs for a new haulout.

“The City & Borough was unsuccessful, so there is no big pot of money coming our way to help out,” Garry White told the park’s board of directors at its September 17.

Garry White is the director of Sitka’s industrial park, where the new haulout is to be built. The park’s board has been taking a hard look at the project since last fall, when Sitka’s lone private boatyard announced it would be closing its haulout as early as next year. But everything balanced on the infusion of these now-absent federal funds.

“So here we are, we’re back to square one, but I think we have a better idea from all of the work we did last fall, of what the community wants to see in a haulout,” White said.

What the community wants is something that serves the majority of Sitka’s large commercial and recreational fleet: A travelift of around 100 or 150 tons, an environmentally approved washdown area and access to uplands where Sitka’s marine trades can be housed — and those uplands must remain in public ownership.

With millions in federal support, it would be a lot simpler to connect these dots. If it must come together privately, however, Sitka municipal administrator John Leach says it becomes a Catch-22.

“All these lots are available for lease and for development, but none of the potential upland developers want to make any investment until there’s a haulout facility,” said Leach. “The people that would potentially build a haulout facility want access to the rest of the lands because they know that’s the only way they’ll make money in a haulout facility. And then when we offer the lands for a full haulout facility, we hear loud and clear that they don’t want the city to give up control of those lands to the investors, and then the investor leaves. So we end up in this continual back-and-forth.”

Leach was referring to a 2014 proposal from Silver Bay Seafoods to build a marine services center at the park. The offer broke down under public opposition to selling the processor almost all of the available land in the park.

But other private projects at the park have worked. Northline Seafoods in 2018 built a gravel ramp to haul out barges — and has since given it to Sitka. The barge ramp could be adapted to haul boats, with a hydraulic trailer rather than the more conventional travelift. White suggested that there was an opportunity for someone to start small, without the strings that come with government funding.

“If someone wants to come and put a trailer on that ramp today, I don’t doubt that the community would allow them to do that,” said White. “If someone wants to build a marine haulout in front of the old bottling plant on their own property, I don’t think we would say no about that. That’s just me. But I think the issue is that if it’s city money then we have to have some sort of assurances that it’s going to work.”

White said that one thing that had to work — regardless of who built or operated a haulout — was the washdown area. Complying with Environmental Protection Agency rules would fall to the city. There was consensus on the board that this element of the project — estimated to cost around $1 million — would best be constructed and maintained by the city.

White wasn’t averse to the idea of having the board issue a completely new requests for proposal that made clear there would be no municipal financial involvement other than the washdown area. Because of the time involved in issuing an RFP, the board agreed to have White issue an RFI — or a request for information — which is a speedier way to hear ideas from potential developers.

And speed remains critical. “Right now, no one has any options,” said White. “We know that we want to get boats on the beach, we want to take care of our local fleet, and we want our tradespeople to keep working.”

KCAW - Sitka

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