A new preliminary cost estimate to install the controversial gondola project at Eaglecrest Ski Area is $27 million, which is more than three times higher than originally expected and far more than the city has to pay for the project.
Eaglecrest board member Jim Calvin broke the news of the installation cost estimate for the project at a joint board meeting with the Juneau Assembly on Wednesday night, where the board gave a financial overview of the city-owned ski area.
“That price is $27 million — so that’s a pretty big gulp factor,” he said. “We expected $10-15 million; $27 (million) is quite a pill to swallow.”
That number is a preliminary estimate, and it’s just for the installation of the gondola. A final estimate will be shared with the Assembly on April 1. The Eaglecrest board got the contractor estimate just a day before the board met with the Assembly.
Over the years, Eaglecrest has faced criticism for its growing reliance on city funding to build and maintain infrastructure and pay its staff. Calvin said deferred repairs and maintenance for its aging infrastructure have built up over decades of use. The ski area’s plan to become self-sustainable is heavily reliant on the success of the gondola.
“We are attempting to join the rest of the mountain recreation world in getting to a position where our summer revenues support winter operations,” he said. “It’s a long path that’s a hard path to get there, but that’s what the gondola is about.”
When the city purchased the gondola in 2022, the project was estimated to cost under $10 million. But that number has skyrocketed over the past four years due to the need for additional parts, high construction costs and tariffs on imports.
And now, with the new $27 million installation price tag, the ski area’s board and city face the task of deciding whether to move forward with the project — or scrap it altogether. Both come with their own set of hurdles.
One option is to ask investors for more money. Goldbelt Incorporated, a local Alaska Native corporation, invested $10 million in the gondola in 2022 in exchange for a revenue-sharing agreement. At the meeting on Wednesday, most Assembly members, like Maureen Hall, supported the idea of asking for more money.
“I’m in favor of starting local and reaching out to Goldbelt and starting the conversation,” she said.
The Assembly was less excited about another option brought to the table, which was asking larger national investors to step in.
“I don’t have a lot of faith in any of these options,” Assembly member Christine Woll said. “Not that I don’t want them investigated, but just because of the size of that number, it’s hard to imagine a scenario where we can get on a sustainability track.”
Another option is to abandon the project altogether. But Calvin said $11 million has already been sunk into the project.
“That would leave Eaglecrest with little chance of becoming self-supporting in the near future, and we’d have no way to repay the fund balance,” he said.
As it stands, the revenue-sharing agreement with Goldbelt stipulates that the gondola must be up and running by May of 2028. However, Calvin said the project following that timeline is unlikely given the current financial uncertainty.
At the meeting, the board and Assembly agreed to move forward with initiating conversations with Goldbelt about seeking a larger investment, along with looking for other ways to pay for the project.
In a message to KTOO on Thursday, Goldbelt President and CEO McHugh Pierre said he did not have a comment about the corporation’s stance at this time.
The Assembly and Eaglecrest board will meet again to decide on the path forward at a meeting scheduled for April 1.
