Sitka Assembly members grappled with how to use a recently-awarded multimillion-dollar state grant at their meeting Tuesday night (7-28-26), and ultimately landed on Lincoln Street upgrades.
The Alaska Department of Commerce awarded Sitka $4.5 million in mid-July. The money comes from $37.5 million in unspent cruise ship passenger tax funds. Sitka is one of 16 communities to receive a portion, along with Juneau, Ketchikan, and Hoonah.
The state gave the city just 30 days to pick a single project for the money, with limitations. Head tax dollars can only be used “for projects to repair, maintain and upgrade port facilities and harbor infrastructure, enhance passenger safety and provide services to vessels and passengers,” under state law.
On Tuesday, the assembly discussed the possibilities for the funding, including the rehabilitation of the seawall at the city’s cold storage facility on Katlian Street, the installation of an electric bus charging station under the O’Connell Bridge, and even a passenger ferry that would taxi tourists from the cruise ship dock to downtown.
After some lengthy discussion, Mayor Steven Eisenbeisz was frustrated.
“I came into this discussion excited for four and a half [million dollars], and I’m leaving here kind of discouraged, honestly,” he said. “I don’t want to do this, but I want to tell John [Leach] to just give it back. You know, turn this letter into a paper airplane and send it back with Bert [Stedman].”
Ultimately, Eisenbeisz suggested that the assembly ask Municipal Administrator John Leach to move forward with submitting the downtown Lincoln Street project. Plans to renovate the city’s downtown thoroughfare have been in the works for years. He said for several reasons, he thinks it would be the best fit for the grant.
“We’ve been told time and time again that Lincoln Street is one of the tension points with visitation,” Eisenbeisz said. “Whether it is bathrooms in places where people don’t want them, or if it’s streets that are open or closed when people don’t want them, it brings a lot of contention to our visitor industry. It’s been this body’s goal to get that taken care of, so that we can ease congestion downtown and allow visitors to flow more freely and allow locals their space that they need as well.”
Leach said the most recent estimate to complete the Lincoln Street upgrades is $15.5 million, but that he wouldn’t be surprised if it turns out to be more than that. The city has already earmarked about $6.5 million for the renovation.
“We still have a funding shortfall of about $9 million to get that project completed,” Leach said.
The assembly decided to move forward with the Lincoln Street request, but said the city can still decide not to accept the money.
The city has to submit its plan to the state by mid-August. If the proposal is approved and the city accepts the money, it will have five years to spend it.
