With no federal or state funding available to support the project, plans for a new marine haulout in Sitka have come to a standstill. The Sitka Assembly this week (10-13-20) went back to the drawing board to look for new ideas to develop a haulout, which is considered vital to Sitka’s maritime industries.
City staff and the Gary Paxton Industrial Park board have been working to get a haulout project off the ground, ever since Halibut Point Marine announced it would be closing its haulout in 2021. The city’s first Request for Proposal — or RFP — received only two bids to build the haulout, and ultimately both were rejected.
The assembly had been pinning its hopes on an $8 million dollar federal BUILD grant to fund the project, but received word in September that they weren’t receiving the money.
So what now? City administrator John Leach was direct when he told the assembly what he thought was possible.
“To put it bluntly we don’t have enough money to build a haulout right now,” he said. “We need a slip, we need a washdown pad at a minimum. And we need to be hauling boats as quickly as possible.”
He said the assembly could choose to go one of three directions. It could move forward with private sector development: Sell the land, hand over the keys, and say “build us a haulout.” Or the assembly could issue a new RFP with plans to lease city-owned land to a developer, and may even loan some public funds to help the developer get a haulout off the ground. Or the city could build, own and operate the haulout itself.
“We’re looking for ways to move forward with this taskforce and working group that we’ve got kind of on standby,” he said. “But I don’t want to put that working group moving toward something until I know where to send them.”
Thor Christianson said both the “pure private” and “pure public” options weren’t ideal- he preferred the partial-private option.
“Even if we get the money, we’re not going to be able to run it at a profit as a city. The fact is that private industry can build things cheaper than we can,” he said. “So I think the real question is ‘Okay, what would a public-private look like?’ How much, if there’s a spectrum between almost fully public and they just run it, or almost completely private, and my personal preference would be more towards the private side.”
And another challenge to consider when trying to attract a private developer to take the bait on a haulout partnership? City administrator John Leach said hauling out boats isn’t profitable.
“You don’t make money pulling boats. We penciled this out and if we were to run our own haulout based on our initial studies, it would require about a $600,000 per year subsidy from the general fund just to pull boats,” he said.
“Knowing that we don’t make any money pulling boats, that’s the same for the private industry, there has to be some kind of investment and we need to be very strategic on how you put caps on what they can and can’t do, because we want to also not scare them away,” he continued. “So if we find a good proposal we really need to dial in that RFP.”
No one disagreed that a public-private partnership was the preferred option and the assembly directed staff to draft a new RFP.
John Leach said that he would have proposals back for the assembly’s consideration within sixty days. The city’s goal is to have something available for the fishing fleet by next April.
In other business, the assembly approved a new city seal designed by local artist Aaron Traz Hill, and approved several committee and commission appointments. It reappointed Max Rule for the Investment Committee, appointed Chris Ystad to a term on the Gary Paxton Industrial Park, and appointed Catherine Riley to a term on the Planning Commission. It also approved a re-appropriation of an Alaska Legislative Grant for phase 1 of the Green Lake project on a 6-1 vote with member Valorie Nelson opposed. It unanimously appropriated COVID-19 relief funds toward harbor restroom improvements, and amended a section of city code for permanent motor vehicle registration on a 4-3 vote with members Valorie Nelson, Richard Wein and Gary Paxton opposed.