The city is purchasing back a property it sold to a seafood processing company last year for more than double its original sale price. While some balked at the buyback plan, assembly members say repurchasing the property is the right decision, and a necessary investment for the city’s future marine haulout.

In 2022, the city sold the lot and building at the Gary Paxton Industrial Park to a local seafood processing barge company last year for just over $550,000. Northline Seafoods had been leasing the land from the city, and the option to purchase it for the 2014 appraised value was in the terms of its 2017 lease agreement – provided the processor met a few requirements, like employing at least four people at the park. The lease was transferred when Northline dissolved and became Sayak Logistics in 2021, with all the same terms and rights. 

When the city sold the land, it retained first right of refusal on the property should Sayak Logistics decide to sell. Owner Ben Blakey notified the city of his intent to sell the property in August. The building was appraised at $1.3 million dollars in September. 

With the question of whether to repurchase the building for more than double what the city sold it for last year before the assembly at its meeting on October 10, Kent Barkau said the way the lease was handled in 2021 raised concerns. 

“I do have to question the history of that decision to maintain that right to purchase in the reassignment of that lease, and particularly understanding that there was no assembly debate at the time,” Barkau said. “Wonder you know, what kind of lessons we we could take home from [that]?” 

But most assembly members didn’t agree. Thor Christianson said that the company had the right to transfer their lease and exercise its terms, and there wasn’t much the city could do about that. And over time, the city had benefited financially from the lease. 

“In a perfect world, it’d be nice to have that land still in our back pocket,” he said. “On the other hand, we received approximately $900,000 in revenue from that, between leases and sales, and at the same time, there’s been a number of improvements to that land and, of course, land is worth more now.”

And assembly member Chris Ystad said it was important to remember that the city was given the building originally, when the pulp mill dissolved in the 90s. 

“It was a bit of a shell at the time, the city put in some money to finish out the project. And like Thor was mentioning, lots of improvements were thrown at this building to increase its value from that 2014 to 2017,” Ystad said. “Offices, bathrooms, a big boiler that just so happens to be able to work with this washdown pad.”

Plans for the upcoming marine haulout at the Gary Paxton Industrial Park included constructing a nearby building with a boiler, bathrooms and office spaces. Now that this building was available again, it would save them time to buy it back rather than construct a new one. And Mayor Steven Eisenbeisz said the assembly should consider they may not be the only interested party. 

“If we don’t buy this building, someone else will,” Eisenbeisz said. “I don’t know if there’s a line, but I’m sure that [if] there’s a line of people behind us ready to buy this building, and then we lose control over a key entity within our haulout.” 

Ultimately the assembly unanimously decided to direct the city administrator to move forward with repurchasing the building for $1.3 million. The price would be covered by a $350,000 internal loan from the Southeast Economic Development Fund, $240,000 from the GPIP contingency fund, and $700,000 from the raw (bulk) water fund.