The Sitka Assembly on Tuesday (10-13-26) approved a contract extension with investors looking to ship bulk water out of Sitka. This is the second contract extension for Arctic Blue Waters Alaska Inc. since the city agreed to sell them the right to purchase water from Blue Lake in 2021.
Under the agreement, the international bulk water shipping company was given several years to engineer and build a pipeline to collect water from the lake, but the company has failed to meet its deadlines to submit plans.
Gary Paxton Industrial Park Director Garry White told assembly members Tuesday they had three choices:
“You could go with the GPIP board’s direct or recommendation of having them pay $25,000 to extend their contract for one year. You could take Arctic Blue’s new proposal to do an extension for no dollars down, or you could allow the 45-day letter to run its course, and then terminate the contract,” White said.
Arctic Blue Director Fred Paley told the assembly they are asking for the extension due to increased shipping costs and unrest in the Middle East — which has an interest in obtaining Sitka’s bulk water.
“Why we’re asking for that is we’re hoping that there’s a settlement of the Middle East war with Israel, the United States, and Iran, and that things settle down in the Middle East, and Strait of Hormuz gets opened up, as well as the other areas that bunker oil is being shipped from to bring down prices,” he said.
Paley said even if the geopolitical situation stabilizes in the Middle East, it’s unlikely engineering and construction plans could be completed within the one-year extension.
Assembly Member Katie Riley said she understands there are benefits to keeping the water under contract and creating a pathway for future development. She suggested a “good faith” contribution from the company for the costs incurred by the city to manage the contract, and adding a more realistic deadline.
“If they’re serious about selling our water, fantastic,” she said. “It says here that they have invested approximately $10 million over a 30-year period in attempts to do so. So I don’t think asking them for 10 grand to continue extending this out for two years is too much.”
Assembly members ultimately voted unanimously in favor of an extension until October of 2028 for a $10,000 fee — giving Arctic Blue two more years to complete design and construction plans.
