Currently, the biggest cruise ships can only use the railroad dock, where a berth was closed for part of last season due to a rockslide. That issue has been resolved.
Concerning the ore dock, under a newly announced agreement with Canada's Yukon government, the territory will pay for $17.8m in upgrades in exchange for 35 years of preferential access, giving the Yukon a vital link to get its ore to market.
Skagway takes control of its waterfront
The deal comes as Skagway assumes control of the ore dock on March 19 from the White Pass and Yukon Route Railway, which has leased the facility since 1968.
'With the municipality preparing to take over full control of its waterfront for the first time in 55 years, Skagway will be able to provide more and better facilities for the biggest ships in the growing cruise industry, and at the same time offer the shortest route to and from the Arctic for ocean freight and commodities,' said Steve Hites, who operates the Skagway Street Car Co.
'Mayor Cremata and the municipal assembly have made history by navigating through all of the obstacles, and giving us control of our own waterfront. Now the job becomes the creation of the best multi-use port in Alaska,' he added.
$65m bond for a modern multipurpose dock
Last fall Skagway voters approved a $65m bond to replace the aging ore dock with a modern multipurpose dock.
It will feature a 550-foot floating pier, already under construction in Washington state and set to be installed after the 2023 cruise season ends, ready for the 2024 season.
This will enable the dock to handle ore and cruise ships at the same time, so there will be no impact on cruise calls despite the Yukon preferential berthing agreement, Mayor Andrew Cremata told Seatrade Cruise News.
Two post-Panamax ships simultaneously
'We have infrastructure that we can upgrade to benefit the cruise industry,' he said, and $83m to work with, between the Yukon money and the bond.
Together with the railroad dock, this gives Skagway two post-Panamax cruise berths for the first time, enabling four cruise ships and one cargo vessel per day.
With the White Pass lease ending, Cremata said Skagway didn't put out a request for proposals for the ore dock 'because we didn't need to.' Citizens wanted more control over their waterfront and the ability to attract more than one industry — hence, the multipurpose dock. Cruising's pandemic shutdown was a reality check about relying on one business.
The town was getting just $127,000 a year from White Pass. By taking control of the ore dock, Skagway expects to bring in $17m to $20m within the first year, most from the cruise head tax and wharfage, Cremata said.
$15m to clean up legacy contamination
Skagway is also paying $15m to clean up legacy contamination from lead zinc at the ore dock. In return, White Pass agreed not to dismantle key components of the facility that would have jeopardized the 2023 season and gave the town early access to the dock — the lease ends Sunday, but Skagway has had access to the facility for four or five months.
Cremata said cruise lines are being offered a priority berthing agreement at the ore dock but so far nobody has jumped in.
With the change in control, the mayor would like the town to take on cruise bookings there directly or hire a new cruise agency to modernize the system. Berthing bookings are currently handled by Cruise Line Agencies of Alaska, which works across all ports.
$4m to mitigate rockslide threat at railroad dock
Last season, many bigger cruise ships were turned away from the railroad dock due to a rockslide impacting safety. The facility is owned by White Pass, whose rail and port operations in Skagway were acquired by Carnival Corp. & plc in 2018.
Skagway just spent $4m to mitigate the rockslide threat because the railroad dock is 'essential to our economy,' Cremata said. He doesn't anticipate any safety issues this season.
In 2023, if cruise ships operate at 99% occupancy, that would mean 1.2m passengers, according to the mayor — though he's projecting a slightly more modest 1.1m because ships are now calling in late October, which is often windy, so likely there will be some missed calls.
'It will still be our largest season ever,' he said.
in 2024, with the new floating pier in place at the ore dock giving Skagway the ability to handle two post-Panamax cruise ships at a time, Cremata projects 1.2m to 1.3m passengers.
The Yukon deal has been approved by the borough assembly and is expected to be finalized in the coming months.
Hites of the Skagway Street Car Co. said: 'It’s really all about the future, and the tremendous opportunities that development in the Arctic will create over the next 100 years. The shortest distance between the Beaufort Sea and the Pacific Ocean is through Skagway. Resource development in the north will look to the most advantageous route, and the deepwater Port of Skagway, Alaska commands that geographic imperative.'
This ore dock is not the last play on the waterfront.
Future development at Broadway dock?
In future, it may be possible to move the ferry from Broadway dock, giving the opportunity for a double-sided dock. As Skagway seeks to develop more infrastructure, a public-private deal could be possible, according to Cremata, and that probably would go out as an RFP.
Meanwhile, with the ore dock getting cleaned up and modernized, 'I'm looking forward to seeing a beautiful, inviting, modern port,' he said.
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