A&PP’s Glaab was frustrated with the lease process at GPIP. “I could have land in Seattle in two weeks,” he said. (KCAW image)

After more than a year of waiting on waterfront land to become available, a company will move ahead with plans to build a floating seafood processor in Sitka.

The Sitka assembly on Tuesday night granted a one-year lease to Alaska & Pacific Packing for a prime waterfront lot and building.

Downloadable audio.

The land and building, known as Block 4, Lot 4, was previously leased by the small-ship cruise line The Boat Company.

Ordinarily, someone appearing at the park offering to pay $50,000 to lease a vacant property to build seafood processing equipment would be a slam dunk.

But there are other details that played into the assembly’s decision.

A&PP already has one existing lease for property at the park, Block 4, Lot 8, which it signed last November. Among the conditions of that lease were that A&PP put up a building and employ two full-time people at the site.

That hasn’t happened. Instead, A&PP head Pat Glaab told the assembly he redesigned the processing facility in town at Sitka Salmon Shares — at a site formerly owned by Big Blue.

“We actually did the testing that we wanted to do with fish through that plant — the 10,000 pound-per-day freezer — in that lease. So we did that last year, now we want to build the floating processor to take to Bristol Bay.”

Glaab told the assembly that he had concluded a deal for a 150-foot barge that very morning, and anticipated construction starting on January 15.

Glaab is a commercial seiner, but also the designer who built the state-of-the-art processing line at Silver Bay Seafoods in Sitka, and at some of the company’s other plants.

In 2014 Glaab and Silver Bay Seafoods — now rivals — submitted competing offers for leasing the remaining waterfront land at Sitka’s industrial park. Silver Bay wanted the waterfront access for a marine services center to be run in partnership with another local business, Halibut Point Marine. So Glaab and A&PP agreed to lease an upland lot — Lot 8 — and put a building on it within two years.

Silver Bay subsequently withdrew its offer, creating the opportunity for Glaab to lease Lot 4, which he wanted all along.

The assembly was disposed toward giving Glaab the second lease, but member Steven Eisenbeisz still wanted to see some processing and employment.

He and Glaab had this exchange.

Eisenbeisz – Are milestones going to be hit, or are we just tying up land for the next year?
Glaab – So we did one year. So they both come up one year from now, and you can pull ‘em both back if you’re not happy with what you see. That’s the idea. In fairness, it took 14 months to even know if I could get on the land. By that time I had 4 months to build a plant. We started into it and realized we couldn’t do it.

Glaab managed to reassure Eisenbeisz that progress would occur. Assembly member Tristan Guevin gave Glaab and A&PP words of encouragement.

“I think the whole point of this was to generate economic activity in the community and it seems like you’re doing a great job with that. To see design and fabrication happening out there, and in town supporting other local businesses and Salmon Shares. I think that’s the kind of economic activity we want. Thank you for all your efforts and creating this kind of benefit for our community.”

The assembly voted unanimously to approve the 1-year lease with Alaska & Pacific Packing.

Selling off the park is within the GPIP board’s mission: “Unlike other property owned by the
municipality, the former Alaska Pulp Corporation mill site was acquired not for governmental
purposes from the state or federal government, but for economic development and disposal.” (GPIP photo)

The Sitka Assembly on Tuesday (5-12-15) voted to approve a longterm lease at the city’s former pulp mill site with Pat Glaab of Alaska & Pacific Packing, or APP – despite a protest from the site’s neighbor, processor Silver Bay Seafoods.

Glaab wants to use about an acre at the Gary Paxton Industrial Park to design and build fish processing equipment. The 25-year lease includes 20,000 square feet of tidelands, for the construction of a floating pier to work on boats. Glaab has the option to buy the land outright once he meets certain benchmarks, including two full-time employees.

The proposal faced resistance from the park’s current major tenant, Silver Bay Seafoods. Glaab designed much of Silver Bay’s processing equipment when the plant was built 8 years ago.

But Silver Bay president Troy Denkinger asked the assembly to put lease restrictions on the site. Specifically, he asked for limits that would prevent APP from going beyond building equipment to actually processing fish — and competing with Silver Bay.

“APP could be building a fish processing facility, which would have devastating impacts on Silver Bay, Sitka Sound, SPC, and their fishermen,” Denkinger said. “The local fish pie is only so big, and is currently fully utilized. If a new fish plant were to be built in town, it would only take jobs and revenue from local processors and fishermen.”

Those concerns echoed some of the worries that existing processors voiced when Silver Bay first set up shop at the park.

Glaab noted that the industrial park board heard all the same arguments and recommended the assembly approve the lease.

“I petitioned the Gary Paxton board fourteen months ago for a piece of land to set up a business to do all the things I’ve been doing for the last thirty years, which is marine industry support,” Glaab said. “[That] includes many things: building fish processing equipment, but also building fish processing plants, as well as many other things.”

Assembly members seemed unconvinced by Silver Bay’s arguments. Deputy Mayor Matt Hunter pointed out that the lot is less than an acre and isn’t on the waterfront.

“I have a hard time believing that a 32,000 square foot lot is going to result in a fish processing plant that’s going to come close to rivalling Silver Bay Seafoods,” he said,

The lease was approved by a vote of 6 to 1.  Tristan Guevin voted against the deal, as he did with previous sales at the Industrial Park. He argued that the land should remain in public hands, with long-term leases, but no sales.

You can find more coverage of the Sitka Assembly here. 

Selling off the park is within the GPIP board’s mission: “Unlike other property owned by the
municipality, the former Alaska Pulp Corporation mill site was acquired not for governmental
purposes from the state or federal government, but for economic development and disposal.” (GPIP photo)

Should Sitka sell off its remaining land at the Gary Paxton Industrial Park, or keep the land in public hands?

That’s the question currently bedeviling the GPIP board. On Thursday night, board members brought the issue to the Sitka Assembly for guidance.

Downloadable audio

The city has two offers for the Gary Paxton Industrial Park. (You can find them here and here.)

Pat Glaab, of Alaska & Pacific Packing, has proposed leasing about an acre and a half of waterfront property, including an empty building, to house his business designing and manufacturing equipment for the seafood industry.

“I would design and build freezers, I would build the equipment that actually helps to butcher the fish,” Glaab told KCAW. “The conveyors that move the fish along, the holding tanks that hold them, the transportation to get them into a van, the packaging machines that package them: all that stuff needs to be built and needs to be specific to what the seafood industry needs.”

Glaab has been designing fish processing equipment for decades — he designed much of Silver Bay Seafood’s Sitka processing plant.

Silver Bay Seafoods, meanwhile, wants to buy nearly all the remaining land at the park, including the waterfront plot that Glaab is seeking.

The company proposes building a seafood byproducts and salmon oil plant, cold storage — and, perhaps most tantalizing for the city, a marine services center.

“My goal is to create a marine services center that becomes a destination for boat repair throughout Alaska,” said Silver Bay President, Troy Denkinger. “Silver Bay’s role in this would be to put the infrastructure in, to create the actual infrastructure that brings the boats here, and then to promote the growth of the businesses — not us owning the businesses, but promoting the growth of local businesses, or businesses that might come to town to provide these services.”

Under the vision sketched out by Denkinger and CEO Rich Riggs, Silver Bay would serve as a sort of umbrella and facilitator, bringing in everyone from welders to painters to engineers to work on boats.

The boat yard would be operated in partnership with Halibut Point Marine Services, and would include a large boat haul-out.

To that end, Silver Bay has proposed that the city modify its plans for a dock at the GPIP. The city has received $7.5 million dollars in state money to build a public multipurpose dock, but planning has been put on hold while the city considers the two new proposals.

Silver Bay wants the city to revise its plan, to include marine haul out piers. Silver Bay would then buy a 250-ton marine travel lift to operate at the site.

Nearly everyone at Thursday night’s meeting supported the idea of a marine services center. It’s been one of the city’s longtime dreams for the park.

“The thought of this facility, marine service center, being brought in here, is of course to me, a windfall,” said Sitka resident Kelly Warren, who owns two tenders. “I had three boats previously. I’ve sold one, in large part due to the fact that we just can’t maintain them up here. They can’t be hauled in Sitka.”

But members of the public, the GPIP board and the Assembly all expressed worries about handing over so much of the park to one private owner.

The board has already voted to recommend selling Silver Bay several of the lots it asked for; what remains is the waterfront area, including the area where the two proposals overlap.

Glaab, of Alaska & Pacific Packing, said he’s troubled by the prospect of the proposed boat yard in private hands.

“If an individual owns it, doesn’t matter who that individual is, if they decide next week they want to raise chickens out here, am I out of luck?” he said. “Is everybody sitting here saying, ‘We want a boat yard,’ but we don’t own it? One individual owns it. And I think that’s problematic from the service industry’s point of view, and from mine.”

GPIP board member Dan Jones suggested the city not sell the waterfront land, but rather negotiate long-term leases.

“I would really like to see both of these proposals work in the park,’ Jones said. “But I want to make sure that a hundred years from now, the park still works for the public.”

Assembly Member Matt Hunter spelled out the city’s dilemma.

“We don’t have the money to construct the facilities that our fishing fleet needs,” Hunter said. “We have a private business that’s coming forward saying they’re willing to do it. We have another private business coming forward saying that they’re willing to do it. And I just want to make sure that whatever we end up doing, we get the value for the community…We also need to guarantee that public access, and make as much room as possible for the diversity of business. So, I’m looking to the board for some recommendation here.”

The GPIP board will try to hammer out those recommendations at its next meeting, which has not yet been scheduled.

The board of Sitka’s Gary Paxton Industrial Park on Wednesday (12-17-14) approved the sale of a significant portion of park waterfront to Silver Bay Seafoods.

Plans for a joint venture in a marine services center remain on hold for the time being.

Downloadable audio.

In just eight years, Silver Bay has already acquired a substantial portion of the park, including the plant and dock at lower left, and nearby bunkhouses.

Read Silver Bay Seafood’s complete purchase proposal.
Read Alaska Pacific & Packing’s complete lease proposal.

The deal won’t be final until the Sitka assembly has its say — and ironing out the details alone may take several more meetings — but the prospect of transforming the former home of Sitka’s pulp mill into a huge seafood plant and marine services center clearly has the public’s attention.

“Jobs, jobs, jobs. Jobs have always been Number 1 since the pulp mill shut down. And that’s what this site was to be developed for,” said Nancy Davis, one of the original board members of the Gary Paxton Industrial Park.

“The board’s protection of the waterfront, which was so important when we began, was to prevent the lease or sale to someone who would just let it sit and have nothing happen. Example: The Boat Company.”

The small cruise line’s plans to stage its ships here went south with the economy in 2008. But so did the plans of True Alaska Bottling. The city sold TAB its plant in 2006. Water bottling never panned out, and Silver Bay attempted to buy the 3-acre site in foreclosure, but other investors have held on to the vacant building ever since.

Some argue that TAB is the main reason to keep the park in city hands, and lease property to Silver Bay.

“No matter what somebody puts on paper,” said Pat Glaub. “It doesn’t tell what the actual future will be.”

A slide from Silver Bay’s presentation to the GPIP Board. The proposed purchases would put much of the 11-acre waterfront in the processor’s hands. (KCAW photo)

Glaub owns Alaska Pacific & Packing. He’s submitted a competing offer for an area of waterfront also sought by Silver Bay. Glaub’s business is small, but he’s serious.

“I had a conversation today about an ice facility for Bristol Bay, which is a three-barge ice-producing equipment. Something in the neighborhood of 1,200 tons of ice a day, to help with Bristol Bay quality issues.”

The park board has heard proposals from plenty of dreamers, but Glaub is different. He helped develop the innovative processing lines for Silver Bay’s Sitka plant and two others. His wants to establish an engineering firm in the park that converts Navy barges into floating processors.

“If I can’t handle it here, I can do it in Bellingham, I can do it in Everett, I can do it in different places. But I would love to build those three barges here.”

Glaub says he has an amicable relationship with Silver Bay — he even has an ownership stake in the business — but he’d rather remain independent, and control his own future.

Read previous reporting on Silver Bay Seafoods and Alaska Pacific & Packing.

Rich Riggs, the CEO of Silver Bay, doesn’t rule out working with Glaub. “I really look at what Mr. Glaub has proposed as a complement to this marine services center.”

Riggs and board chair Troy Denkinger outlined Silver Bay’s proposal for buying most of the remaining waterfront in the park, for fish waste processing, expanded cold storage, and a joint venture with Halibut Point Marine to build a marine services center. The facility would have a 250-ton travel lift to haul the fleet’s biggest boats, and on-site tradespeople in welding and fabrication, fiberglass, electronics, and propulsion.

Riggs suggested that Glaub’s business could join the suite of services available at the park.

“So what we have done is provide a space within Area F for those exact operations, and look forward to it complementing this marine services center.”

Glaub stated bluntly that working upland on a site, surrounded by Silver Bay, was unacceptable.

Other members of the public attending the meeting were also concerned about Silver Bay’s monopolizing the site.

Jeff Farvour is a commercial fisherman and boat owner. Several years ago he brought forward a citizen initiative to bring large land disposals at the industrial park under voter control. The city challenged the initiative language, and its been tied up in court ever since. Still, Farvour advocated on behalf of the public.

“Just on first blush, I guess I’d be more of a proponent of having more diverse tenants out there. I think that might be in the best long-term interest of the city.”

And the city does have interests in its industrial park. Foremost among them: A multi-purpose bulkhead dock. The city already has $7.5-million in hand for the dock. Silver Bay’s proposal asks the city to add infrastructure for a travel lift to the bulkhead. Silver Bay, on the other hand, would buy the 250-ton travel lift.

Board member Ptarmica McConnell did not want to put the cart before the horse.

“I think that before we can really make a decision on those waterfront lots in question, that we need to talk about the multipurpose dock, and the money we’ve received for it. Whether we can use some of that money for the haul-out portion of it, and obviously we’d have to look for more money to finish it.”

Industrial park director Garry White said he’d be willing to investigate that question. He suggested that proceeds from leases and sales might be used to cover the additional $3-million needed to included a haul-out facility with the bulkhead dock.

This is when city administrator Mark Gorman stepped in.

“We need to be clear in what the community of Sitka needs in that bulkhead, and it should complement what Silver Bay is doing. But first and foremost that facility is for the public. If it’s perceived that we’re building it for Silver Bay, there’ll be a backlash.”

Board member Dan Jones proposed removing 35,000 square feet from Silver Bay’s proposed purchase, immediately upland of the dock. His objective was to further protect public access to the dock. “You can’t have a dock without uplands,” Jones said. He offered an amendment to this effect, but it failed.

In the end, the board approved only some of Silver Bay’s offer. They agreed to sell the park’s former wastewater treatment building, which Silver Bay will use to build a fish oil plant. They also approved the sale of the large parcel just to the north of the TAB building. If approved by the assembly, the two sales would be worth about $1.1-million.

And finally, the board approved leasing the former pulp mill administration building to Silver Bay for $1 per year until certain covenants expire on the property, and then selling it to the processor for $233,000.

Park director White said the building had been appraised at $0 and was considered a liability at the site. Board member Chris Fondell ask White to draft language in the agreement to ensure that the building never be returned to city ownership.

Details of the rest of Silver Bay’s acquisition offer will be hammered out in a work session with the assembly. Large questions hang in the balance: The city has been looking for a solution to marine services for a long time, yet it has been burned before by ambitious property schemes in Sawmill Cove.

Mark Gorman said some “shuttle diplomacy” might help allow both Silver Bay and Alaska Pacific & Packing to realize their goals for the site.

Park board chair Grant Miller, participating by phone, said the entire proposal met his expectations for the park.

“Whatever it takes, I think we need to do it. We’ve been hemorrhaging boats from Sitka for too long now.”

The processor began operations in a corner of the former pulp warehouse in Sitka in 2007, and has since grown into one of the state’s largest seafood operations.

Park board members heard details of the sale in a special meeting this week (9-25-14), but took no action. Instead, they decided to hold off a month in order to weigh the offer against a competing proposal from a different company.

Downloadable audio.

Selling off the park is within the GPIP board’s mission: “Unlike other property owned by the
municipality, the former Alaska Pulp Corporation mill site was acquired not for governmental
purposes from the state or federal government, but for economic development and disposal.” (GPIP photo)

When it rains it pours. That may have been in the minds of the five member board of the Gary Paxton Industrial Park, as two major players in the seafood industry laid out plans to develop substantial portions of the remaining waterfront in the park.

Silver Bay Seafoods has been at the park for seven years, and now owns its plant and several other properties, including a bunk house. Silver Bay’s growth has been nothing short of extraordinary. It now operates seven plants in the state, as well as plants in Puget Sound and San Francisco, and has one on the drawing board for Ventura, California.

Read Silver Bay Seafoods’ purchase proposal here.

Read Alaska Pacific & Packing’s lease proposal here.

But a great deal of Silver Bay’s success can be attributed to a contractor called Alaska & Pacific Packing. APP designed and built Silver Bay’s innovative processing lines in Sitka, Craig, and Valdez, and now would like to permanently house its manufacturing operation at the park.

Board member Steven Eisenbeisz was interested.

“I’m in support of your idea here. I think it’d be a great service for Sitka. I think it’s something that’s not offered in many other places. And I’m sure you’d go someplace else and work on this if not here in Sitka.”

APP’s CEO Pat Glaab wants to lease about 95,000 square feet of the park for his manufacturing facility, plus another 12,000 square feet of tidelands for a floating dock to moor the tenders and floating processors purchasing his company’s equipment. At going rates, the lease would be worth about $128,000 a year. But the board would consider crediting Glaab $10,000 a year for each full-time employee, which might reduce his rent to less than $50,000 annually.

Industrial park board chair Grant Miller, also a fisherman, thought settling APP’s operation in Sitka would be a boon to the industry.

“And I’d just like to say that I think this whole idea is good also. Not only good for Sitka, but good in the sense that the equipment and stuff that you’re manufacturing will be of service to other vessels in Alaska passing through here.”

APP’s plan is consistent with the development plan of the park, and the board might have wasted no time coming to terms with Glaab, were it not for the fact that Silver Bay is interested in the same property. Silver Bay, in fact, is offering to buy outright all the available waterfront in the park, plus some uplands, for $2.1-million.

“I look back to when this was just a vision and the dream was big. And I think we have far exceeded what I think the expectations of Silver Bay were when this board — and ultimately the assembly — gave approval for what was then a lease, ultimately a purchase, and we have proven that we are not about talk and rhetoric, but about implementation.”

This is Rich Riggs, CEO of Silver Bay. Riggs is a lifelong Sitkan. He stressed that the company — despite its rapid expansion — calls Sitka home. Silver Bay is owned by a consortium of 300 fishermen, with many of those original investors Southeast seiners.

The company’s reputation, however, took a hit a couple of years ago when it processed trawl-caught ocean perch. Although the fish were legally harvested, trawling is banned in Southeast Alaska.

Board member Steven Eisenbeisz said the public was concerned. His question put Riggs on the defensive.

Eisenbeisz – With this expansion, there’s concern that your plan is to bring trawlers into town. Could you speak to that?
Riggs – Sure. That is not the intent here, to be clear. The intent here is to provide value-added to the resources that Alaska fishermen — our owners — are currently harvesting. We did obviously — as is well-known — take a legally-harvested resource in a year when we knew the forecast was low, and we wanted to bring those multiplier dollars to Sitka and make the plant profitable. There’s a more holistic discussion, I personally wrote a letter to the editor in regard to it. But the expansion and growth of Silver Bay here is not intended… What we’re talking about, from our perspective, is for value-added.

That value-added component includes a canning line, which Silver Bay is now operating on a trial basis, cold storage, and processing fish waste into a high-end oil and pet food.

These facilities would be built on either side of Silver Bay’s existing plant. The remainder of the waterfront would be utilized as a marine services center, owned by Silver Bay but operated by Halibut Point Marine. The haul-out would service large boats — over 50 feet in length — that can’t be hauled out with Halibut Point Marine’s current travel-lift.

A marine services center has been a goal of the park. But board member Ptarmica McConnell, participating by phone, wondered if Silver Bay and Halibut Point Marine were setting up a private service.

“I was just curious about the haul-out facility, if that’s going to be for tenders and the herring fleet and large boats, or if any size vessel could go there and use that facility on a space-available basis, or what the intent of the use of that is?”

Halibut Point Marine owner Chris McGraw explained that the new yard would be an extension of his existing service, but with greater capacity. The existing yard would continue to operate as always.

Still, McConnell was concerned about the plan.

“When you sell a property, the new owners can do whatever they want, so there’s no guarantee that they’ll go through with the marine services facility, although they have the best intentions. Things change in business. Unforseen circumstances can come up.”

One thing soon to change at the park is waterfront access. The city has won a $7.5-million grant to build a bulkhead dock. Board member Dan Jones felt that public access to the dock depended on having public uplands available. He was worried about the city being put in an embarrassing position if the public dock were completely surrounded by private land.

“The proposal, as it exists to me, takes too much land for us — with a red-face test — to continue to build the dock. So, how much land do we need for a dock, what does it mean to this proposal?”

Board members expressed an interest in seeing a compromise between Silver Bay and Alaska Pacific & Packing that might put both businesses in the park. KCAW spoke with Glaab after the meeting, and he said Silver Bay remains one of his best clients, but he would rather not lease from them, and preferred to run a completely stand alone business.

Board chair Grant Miller opted to hold off on any action for a month.

“I’d just like to find out if we have any other options rather than just saying Yes to one and No to the other. That would be my hope that we could do that at the next meeting.”

The board then adjourned until October.

According to park director Garry White, the sale of the remaining GPIP properties will not affect the city’s plans to build a $7.5-million bulkhead dock.

Sitka’s industrial park has attracted the interest of a couple of potential buyers — who may be interested in offering to purchase outright all remaining property at the site.

The Gary Paxton Industrial Park board of directors was hoping to see a pair of proposals Thursday afternoon (8-28-14) at its regular monthly meeting, but park director Garry White said the busy fishing season had caused a delay.

Both Silver Bay Seafoods, which currently owns a processing plant and other property in the park, and Alaska & Pacific Packing have expressed interest in the site. Alaska & Pacific Packing is headquartered in Naknek, on Bristol Bay, but its principal, Pat Glaab (“glob”), resides in Sitka.

Silver Bay CEO Rich Riggs first brought forward the idea to the board at its meeting in May. According to the meeting minutes, Riggs told the board that Silver Bay has been looking at opportunities for growth, and would have made a formal proposal sooner were it not for the fact that nearly all available property in the park is leased to Barnard Construction, while the Blue Lake Dam project is underway.

Riggs suggested a possible joint venture between Silver Bay and Halibut Point Marine, which would include a haul-out for large vessels.

At the same May meeting, Glaab told the board that Alaska & Pacific Packing was interested in leasing a building to manufacture equipment related to the seafood industry. But he also discussed plans to build four specialized ice-manufacturing barges for use in the Bristol Bay fisheries. This activity would involve the use of other waterfront property in the park.

There are approximately 25 lots in the central waterfront area of Gary Paxton Industrial Park, and roughly a quarter of them are committed. Property holders include the Northern Southeast Regional Aquaculture Association, Starwest, and the City of Sitka’s ultraviolet treatment plant. A new venture, I Water (“eye-water”), has leased three parcels, with an option to buy should the company build a bottling plant and ship product within the next two years.

Silver Bay Seafoods owns four lots.

Garry White was unable to provide more details on the prospective purchase of the remainder of park property, since all his board members had not yet seen the proposals.

Board members present Thursday stressed that public access to the waterfront — and a proposed city-owned $7.5-million dollar bulkhead dock — would not be affected by any future sale.

White says he’ll try to organized an evening meeting in September for his board — and the public — to vet the full proposals.

The Gary Paxton Industrial Park was the home of the Alaska Pulp Corporation Mill from 1959 to 1993. In 1999 APC demolished the mill and transferred the property to the City of Sitka. The park is managed by a five-member board appointed by the municipal assembly.