FIFTH OPENING – The Sitka seine boats Hukilau and Rose Lee pump herring aboard this afternoon at the end of Deep Inlet during the fifth opening in the Sitka Sound sac roe herring fishery. The opening was being held in two locations beginning at 11 a.m. (Sentinel Photo by James Poulson) 

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Daily Sitka Sentinel

Sitka Industrial Park Board Sorts New, Old Land Proposals

By TOM HESSE

Sentinel Staff Writer

New counter-offers, a possible change in dock location, a third land-purchase proposal and concerns about road width that emerged Thursday night at a public meeting added more frustration than clarity to deliberations on the sale of land at the Gary Paxton Industrial Park. 

Chris Fondell and Garry White listen to public testimony at the GPIP board meeting Thursday. (Sentinel Photo)

 

The park’s Board of Directors called the meeting at Centennial Hall to continue discussion of two offers the board has received for land in the park: one by Silver Bay Seafoods (SBS) and another by Alaska and Pacific Packing (APP).

But before the board could get started, another hat flew into the ring during the Persons to be Heard portion of the meeting. 

“We have a proposal to purchase lot 9A and 9B for the purposes of a marine services center,” said Todd Fleming, development coordinator for a local firm, Sound Development LLC.

Sound Development is already in business with the City and Borough of Sitka, developing the 20 acres of Benchlands property the company bought from the city in 2013 for $344,300.

Fleming handed out a 7-page proposal for its GPIP project for the board to consider. Lot 9A is waterfront property that includes the utility dock and 9B is a section of uplands just behind it. The Sound Development proposal says it would pay the appraised value of the land – $1,230,000 for both lots – plus $5,000 for the utility dock “thus eliminating the City of Sitka’s liability” for the old structure. Lots 9A and 9B add up to around 150,000 square feet of property.

The board couldn’t take any action on the new offer since it wasn’t officially on the agenda. If it does decide to consider the proposal it will have to try to fit it in amongst offers from SBS and APP, which involve some of the same area. The board spent more than two hours discussing the competing proposals, which deal mostly with waterfront properties 9A and 4. Some of the issues the board struggled with included:

– whether or not both SBS and APP could fit a dock into the area in question. SBS intends to build a drive-down dock with a ramp and APP is looking to build a 100-foot floating dock. 

– whether or not SBS and APP could share the same docking facility.

– the placement of a multipurpose dock that the city has $7.5 million in state funds to construct.

– whether or not that dock would include pilings for a marine haulout to be operated by SBS.

– the desirability of selling the waterfront property against offering only long-term leases. 

That last issue was the biggest sticking point for park director Garry White. White has repeatedly asked members of the GPIP board and the Assembly what their positions are on selling waterfront property, and he told board members that it would be tough for any proposal to move forward without an answer to that question. 

“Like I’ve been saying the whole time, I have no idea what you want to do,” White said. 

Only two of the five board members took a position on the issue. Board member Grant Miller said he preferred long-term leases. 

“It’s been a policy of this board for a long time that waterfront property be retained by the city,” he said. 

Board member Dan Jones said he felt similarly: 

“Garry finally smoked me out. I am not interested in selling the waterfront – any of it,” Jones said.

Board members Chris Fondell, Ptarmica McConnell and Scott Wagner didn’t take a position. Settling that issue is important to the movement of the proposals because it affects how the businesses approach their offers. APP owner Pat Glaab’s proposal is for a long-term lease of property, which he will use for his business that designs and fabricates commercial freezing systems for fish processing. 

The SBS proposal to build a marine services center with a vessel haulout, however, is predicated on the idea of a lease-to-own scenario. White said he needed direction from the board as to whether or not that offer is feasible and, if not, whether or not he should negotiate for an offer that involves a long-term lease. 

From the SBS side, CEO Rich Riggs said SBS would need to discuss possible new terms with its partners and lenders before he could give an answer on whether or not a long-term lease is possible. 

“The biggest thing for us, part of the package for us is this is a big (financial) lift,” he said, adding that he would need to know the city’s position on whether the land is available for sale or for lease only, so that “we can have those conversations on our side.”

Towards the end of the meeting board member Wagner asked White if city staff could explore the idea of a lease arrangement with Silver Bay as well as whether or not the road infrastructure can support the loads created by a haulout, and what the dimensions of the proposed docks for both APP and SBS are. The only motion passed by the board at the meeting was to direct White and city staff to find out the cost of a different design and location for a third dock – the city-owned multipurpose dock. 

Chris Fondell made the motion to direct White to look into the cost of a dock in front of lot 4 and 9A that would include haulout infrastructure, a drive-down ramp, and a floating dock. Original talks for the dock had it located farther southwest in lot 9A on the other side of the utility dock. For the money available, that dock would have had 30 feet of dock face along with the additional haulout infrastructure requested in the SBS proposal. Part of the reason board members think they might be able to get more infrastructure in the new spot is because of the cost of building in the deeper area down shore. That cost wasn’t realized until a recent study. 

“This spot has very, very deep sediments. Much deeper than we ever considered,” White said. 

For various reasons, including provisions for bulk water sales and deep-water dock viability, the city’s previous concepts had the multipurpose dock in the southwest corner of lot 9A, about 1,000 feet from where the SBS and APP proposals overlap. But White said that doesn’t mean the dock is wedded to that position. 

“We don’t have enough to build a quality product right here,” White said. 

City Public Works Director Mike Harmon added that none of the uses discussed – drive-down ramp, vessel haulout and docking space for small boats – required the dock to be in the original position discussed. 

“You can get a lot more done in shallower waters for your money,” he said. “It does not make sense to build your dock in the most expensive area.” 

The board voted 4-1, with Wagner dissenting, to direct White to work with city staff to investigate the cost of moving the public dock in front of lot 4 and 9A where the APP and SBS dock sites were being discussed. This action flew contrary to some of the recommendations of city staff.

“What is really helpful for us is to understand the uses ... we’ll match the infrastructure to the use,” Harmon said. 

Harmon said getting cost estimates would be a two-month process that could cost around $20,000. White added that it’s tough to get cost estimates without more specific details on what the board wants for the dock, such as dimensions or load-bearing capacity. 

Harmon said his first step if directed to find a cost estimate would be to check with City Administrator Mark Gorman, who was in attendance, on what specific uses the dock would have. 

“We want to match the dock to the decision on what you want to do with the property,” Harmon said. 

Aside from cost, another reason the board discussed moving the multipurpose dock was to see if it would help or hurt the conflict between the APP and SBS proposals. Both companies are looking to fit two docks within about 450 feet of water front. The APP dock would be a floating dock of 100 to 200 feet to work on vessels for installing freezing systems.

The SBS plan calls for a drive-down dock with a ramp and a floating structure that the board began to use as a model for the latest version of the public multipurpose dock. During the meeting Gorman asked Silver Bay CEO Riggs to “put his engineer’s cap on” and give an indication on whether or not he thought it was even possible to fit both private docks in that area. 

“The short answer is no,” Riggs said, adding that was merely a guess based on the available space. 

“It’s awfully condensed in a tight space ... I think the logical thing is to have a preferential-use clause.” 

The clause Riggs was referring to was based on a proposal from SBS that came late Thursday. The pitch was that Silver Bay would build its dock in the area and include in the contract a preferential use spot for Glaab so that APP would be assured space on the floating structure that would be leased at a “fair market rate.” Essentially as long as APP needed the space, it would be available. 

Glaab said he was not interested in the offer, calling it a “non-starter.” 

“Why do they need to be in between me and (the city) if indeed I’m going to have complete control over it?” he said. 

Both Glaab and Riggs said they would be open to other arrangements in the area. Part of the problem, Glaab said, is that some of his projects could have extremely long life-spans. For instance, he’s negotiating for a contract to put freezing systems in converted Naval barges to be used in Bristol Bay. Those projects, he said, could be four-year endeavors. 

Throughout the meeting many of the conversations came back to either the issue of whether the city would sell or lease waterfront and whether both docks could fit in the area. The option to put the city multipurpose dock in the area was partly considered as a means to appease both the SBS uses and the APP uses. Essentially, if the city built a dock for both, then both would be using it based on the city’s conditions rather than having to negotiate with each other or fit two docks into one area. 

Ultimately, the board made no further motions or directions beyond asking White to look into the cost of the dock as well as the viability of lease arrangements and the sizes of the proposed docks. 

The board did manage to toss out one little-discussed proposal for the administration building, utility dock and rock left over from the Blue Lake Dam project. Clyde Bright proposed buying the administration building for teen housing, and building a causeway in Sawmill Cove with the leftover rock. Both motions failed without a second from a board member. 

 

“There. We did something tonight,” board member Jones said.

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20 YEARS AGO

March 2004

Matthew C. Hunter of Sitka recently returned from Cuba as part of a St. Olaf College International and Off-Campus Studies program. Hunter, a junior physics major at St. Olaf College, is the son of Robert and Kim Hunter of Sitka.


50 YEARS AGO

March 1974

Eighth graders have returned from a visit to Juneau to see the Legislature. They had worked for it since Christmas vacation ... Clarice Johnson’s idea of a “White Elephant” sales was chosen as the best money-maker; Joe Roth won the political cartoon assignment; highest government test scorers were Ken Armstrong, Joanna Hearn, Linda Montgomery, Lisa Henry, Calvin Taylor and David Licari .....

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