Proposed land trade may turn the tide for Sitka’s maritime industry

Halibut Point Marine is offering to buy Sitka a 100-ton travelift, similar to these machines in Wrangell. It could haul out 90 percent of Sitka’s fleet. A larger one — say, 150 tons — would cost $1.5-2 million more and add limited utility for only a few very large seiners. GPIP board members believe a hydraulic trailer on the park’s existing barge ramp could service larger vessels, including tenders. (City of Wrangell photo)

A private business has proposed building a new marine haulout in Sitka, in exchange for 17 acres of city-owned waterfront just north of its private cruise ship terminal.

The deal was well-received by the board of Sitka’s industrial park at its Dec. 4 meeting, and by the large number of Sitka’s commercial fishing fleet who attended.

Around 50 or 60 people packed into a small meeting room in Sitka’s Harrigan Centennial Hall to hear the details of a deal that has the potential to break a troubling economic logjam in the community.

“We are proposing a trade in which we would provide a brand-new 100-ton travelift,” said Chris McGraw, owner of Halibut Point Marine. “Construct the infrastructure for the haulout pier, washdown pad, and treatment system in exchange for that property.”

Halibut Point Marine operates Sitka’s only commercial travelift — an 88-ton machine — at their yard, which is also the site of the company’s cruise ship dock. Business at the cruise dock is booming, and McGraw has announced he’ll be closing his boatyard in 2021, leaving Sitka’s huge commercial fleet with nowhere to haul out.

Just north of the cruise dock are 17 acres of undeveloped city land. In a memo to GPIP board members dated November 27, park director Garry White outlined McGraw’s offer to build the city a new haulout at Sitka’s industrial park — including a new 100-ton travelift and washdown pad — in exchange for those 17 acres.

In this Sitka GIS image, the 17-acre city-owned parcel is shown to the north of Halibut Point Marine’s yard and cruise dock, just past the Cove Marina and the Alaska Wildlife Troopers office. (KCAW image)

White rallied fishermen to attend this meeting, but he wanted to stay on task.

“The goal of this is not to debate the property trade — that’s outside this board’s purview,” White said. “The goal of this is to make sure that this infrastructure that they’re proposing to construct is going to meet your needs.”

Before McGraw returned to his seat, Sitka Assembly member Thor Christianson asked if Halibut Point would not just build the new haulout, but also bid on a contract to run it. McGraw said no. He was going to concentrate on his cruise ship business.

So, the deal is: A turnkey haulout in exchange for 17 acres of land. Figure out how to run it later. Christianson did not want to let the opportunity get away.

“I agree that we would probably rather have a third-party run it,” Christianson said, “but if for whatever reason we can’t do that, the city could do it, and probably at least break even.”

Sitka’s industrial park has seen significant investment in infrastructure over the years, but that pipeline has been dry recently. With no ready capital, the park’s board has been looking at putting together projects piecemeal — including a haulout and shipyard. McGraw’s offer sidesteps that financial barrier, and propels the board into a different set of problems. Namely, if we build it, will they come?

With the floor open for public testimony, seiner Kai Olney-Miller said a shipyard was about much more than having a travelift.

“It seems equally important to assess how many vendors would potentially want to move in here,” Olney-Miller said. “Because even if we have a top-notch lift, and nobody wanting to work out there on boats, people are still going to go to Wrangell and other places to get their work done. And so before deciding to put the money into it, if there was a sense of how many people might make shops out there, and what kind of work they would do — I think that’s equally important.”

There was consensus in the room that any planning around the haulout would have to consider making leased space available for all the trades that service boats, and even indoor areas to work on boats out of the weather. Park director White reported that he had spoken with the owners of the former True Alaska bottling plant — which has been long vacant — and that they were “stoked” over the prospect of leasing their building for boat work.

Longtime Sitka troller Charlie Wilber saw a win-win in McGraw’s deal, one for the present, and one for the future.

“The fishermen need a place to haul their boats out,” Wilber said. “My boat insurance insists that I haul out once a year. So I either do it here, or run 17 hours to Wrangell and benefit their economy. But what I really think, for a lot of people that hear this, the economic potential for this town — this could be one of the biggest economic drivers that we’ve seen in a long time. Wrangell, basically they resurrected the town when they put in this shipyard.”

The drawings included in McGraw’s proposal show the 100-ton travelift operating on a haulout pier 26-feet wide, large enough to accommodate over 90 percent of the boats in Sitka’s harbors. Several fishermen thought that going bigger — to 150 tons — made more sense, but the $1.5 million in added expense did not pencil out with the land exchange.

Lee Hanson, whose company just acquired the former utility dock at the park, said he thought 100-tons was the right size — the “sweet spot” — for Sitka, but he did have one “Debbie Downer” observation, as he put it. Compared to Wrangell, he said, Sitka was expensive and difficult to do business in. He described Wrangell as more of a frontier down that “gets it done.”

Assembly member Thor Christianson pushed back.

“And I just looked it up: Wrangell’s sales tax is seven percent and their property tax is 12.5, over twice as high as ours,” he said. “So I think the cost of doing business here, compared to Wrangell — especially if we have the land to facilitate services coming in, I’d love to see LFS (marine supplies) put a satellite there. So it’s a great first step, and we have to get something in there because Sitka won’t have a haulout. And we can’t let perfect be the enemy of done.”

Moe Johnson concurred with that last point. He told the board that he recently had spent a lot of money repowering his troller, and making other repairs.

“The cost of not doing this project is substantial,” he said.

The board voted unanimously to recommend the project to the Sitka Assembly as proposed, with the addition of another washdown pad, a finger float to stage boats headed into the haul out and a walkway for crew members disembarking from vessels in the slings.