The Ketchikan City Council spent three hours Tuesday night talking about port development options. The city likely will issue a Request for Proposals for a private-public partnership, but the council didn’t make a firm decision about what kind.
The council as a whole seemed to be leaning toward a concession contract. That would place the burden of improvements and maintenance of the city-owned downtown cruise dock in the hands of a private company. In exchange, the city would receive a lease payment and some cruise ship fees.
The downside to a concession agreement is giving up some control over the port. Council Member Lew Williams III said that’s why he is more amenable to a preferential berthing agreement.
“The concession to me takes so much control from the city,” he said. “The length of it scares me, and the cost will probably scare me, too.”
Luis Ajamil of consulting firm Bermello, Ajamil and Partners told the council that a typical concession agreement lasts around 20-30 years. But, he said, the agreement can include ways to end it early if need be.
Ajamil also told the council that the city would not have to come up with any funding in a concession agreement; the vendor would finance improvements.
“The goal is: You’re not putting any more money into the facility,” he said.
Ajamil said that preferential berth agreements, on the other hand, typically require the port owner to finance improvements in exchange for a berthing agreement with a specific cruise line.
There was concern about a concession agreement limiting local residents’ access to the port. Ajamil said all of those concerns could be addressed in the RFP, and during negotiations of a potential agreement.
The council also discussed a separate proposal from Survey Point Holdings, which owns Berth 4, and leases that berth to the city. That company has submitted a plan to improve other downtown berths at a cost of about $20 million – paid for by the city.
Bermello, Ajamil and Partners is reviewing that plan and will submit an analysis later. But, City Manager Karl Amylon told the council on Tuesday that the Survey Point Holdings’ plan doesn’t include uplands improvements or other needed infrastructure projects related to the cruise industry.
He said adding those costs would bring it up to about $60 million, which would have to be paid for through bonds.
“Do you think the residents of Ketchikan are going to give you approval to float a $60 million bond at a time when the state is in — I’ll leave it to your own conclusions to define what position the state is in right now,” he said.
Amylon argued that the city has nothing to lose by putting out an RFP and learning what opportunities are out there. He said the city will not be obligated to accept a proposal.
This process started because of larger cruise ships coming into the Alaska market. The city’s downtown dock currently can take only one of the larger ships at a time.
It appears an RFP of some kind is going to happen. But whether the council prefers a concession agreement or preferential berthing is still up in the air. A vote on that is scheduled for the council’s regular meeting on Aug. 15.
