“It Just Didn’t Work”: Legacy of botched project haunts port’s future

by Zachariah Hughes, Alaska Public Media

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As aggressive corrosion rapidly degrades the Port of Anchorage, its funding future is in the hands of Juneau lawmakers. Funding for construction and rehabilitation of port infrastructure was the only financial request of the mayor’s administration in Anchorage for this session. But the possibility of action on a major spending project, even one most see as critical and inevitable, is nearly impossible according to lawmakers on both sides.

Trying to follow major spending request in this lean fiscal climate resembles a scene from part one of Harry Potter and the Deathly Hallows, when Pius Thicknesse is interrogated by Lord Voldemort.

“One hears many things my lord,” Thicknesse says as a snake slithers by his foot. “Whether the truth is among them is not clear.”

“Spoken like a true politician,” replies Lord Voldemort with a laugh.

Rumors have swirled for months about whether funding to upgrade essential pieces of the port would come out of this session. In January, Mayor Ethan Berkowitz requested that a general obligation bond for $290 million go before voters on the November ballot.

“It would be like someone’s mortgage,” Berkowitz said during a recent interview in his office. “It’s not all due at one fell swoop. There’s a payment that you make over time.”

In the GO bond scenario, residents across Alaska would be the ones to decide whether or not it’s worth spending more money on a port that handles the lion’s share of cargo, fuel, and construction material coming into the state.

But many residents might ask themselves, ‘didn’t we already do that?’

The answer is yes. But only sort of.

$302 million state and federal dollars were spent on what was called the Port Expansion project, a botched effort to build more docks that could accommodate a dramatically larger volume of cargo (in its current configuration the Port of Anchorage operates at just 40 percent of its capacity). The project was halted by then-Mayor Dan Sullivan in 2010.

The current plan calls for modernization of the port, updating aging and degrading pieces of infrastructure. It will involve new construction, but at a comparable scale and size to the current configuration.

But Berkowitz believes the expansion’s bad reputation still lingers.

“It just didn’t work,” Berkowitz said. “Nothing worked about it except spending people’s money. And there’s a consequence to that.”

''Nothing worked about it except spending people’s money. And there’s a consequence to that.'' Mayor Ethan Berkowitz

The municipality is trying to recover a portion of that money through a lawsuit alleging faulty design and engineering work by subcontracted companies. But the administration, port officials, and CH2M, the private firm managing the current iteration of the project, insist that the difference between a port “expansion” and a port  “modernization” goes way beyond semantics.

That argument, however, hasn’t gained any traction in the capital.

“Everybody understands how that’s a priority, but, at the same time: we don’t have any money,” said Fairbanks Republican Steve Thompson, co-chairs of the House’s Finance Committee.

Thompson hasn’t seen any movement on a house bill to bring up the port bond introduced by majority leader Rep. Charisse Millett, R-Anchorage. And he thinks that even if it went before his constituents on the ballot, they probably don’t have an appetite for it.

“I’ve got that feeling in this building from both the Senate and the House,” Thompson added. “They’re not wanting to bond anything and add to our state’s debt at this time.”

Thompson’s counterpart in Senate Finance, Anna MacKinnon, R-Eagle River, agrees.

“We have zero ability to bond and help the Port of Anchorage,” MacKinnon said. She compared it to running a household: “You don’t want to take on debt when you don’t know what your future income is going to be.”

''We have zero ability to bond and help the Port of Anchorage... You don't want to take on debt when you don't know what your future income is going to be.'' Rep. Anna MacKinnon

MacKinnon plays a big role in putting out the capital budget, which could be another avenue for port funding. She doesn’t believe it makes financial sense for the cash-strapped state to spend capital funds at a time when the Municipality of Anchorage still has close to $127 million dollars on hand (some estimates put the full amount lower because of pre-obligated contracts monies spent since the start of the year). That money is from past allocations to the expansion project, and is earmarked for phase one of construction under the modernization design.

MacKinnon denies that party politics is playing a role, point out that she shot down a funding request from Berkowitz’s conservative predecessor.

“I turned Mayor Sullivan down, and I’ve turned Mayor Berkowitz down, both for similar reasons: the state doesn’t have extra money to contribute to a project that has sufficient funds to move through another year of development,” MacKinnon said.

Even Democrats who support the port modernization say they can’t get behind a funding request this session.

“I’m also battling cuts to seniors, cuts to people with disabilities, cuts to the University, cuts that are harming our ability to keep people in the state of Alaska,” rattled off Rep. Les Gara, D-Anchorage, who’s district covers the area’s surrounding the port.

In the Senate, Democratic leadership said during a recent press conference that funding port improvements simply cannot be a priority for lawmakers this session.

“In terms of whether it’s likely to move forward? I’m not optimistic about that right now,” said Sen. Berta Gardner, D-Anchorage, in response to a reporter’s question.

For his part, Berkowitz also doesn’t expect funding to come through this year, however he thinks the session has brought things “closer to a long-term solution.” He insists, however, that the port plays too valuable a role in the state’s economy for hazards to be ignored.

“The Legislature right now is all consumed with what’s going on in the Capital Building, and they’re consumed with what’s going on in the present,” Berkowitz said. “Thinking about what the future’s going to look like and how to get to a better future is not currently part of the conversation. You cannot ignore future responsibilities just to satisfy present responsibilities.”

For the time being, the port is spending $6 million to test its new design as part of a proof of concept for the modernization project. 10 steel pilings, each 200 feet long, will be driven deep into the Inlet mud. And that is why you might spot a 20-story tall crane–the largest on the West Coast–in the port during the days ahead.

APRN’s Andrew Kitchenman contributed reporting to this story from Juneau.

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