Council Begins Discussing How To Lease The Unalaska Marine Center

Dec 19, 2018

When finished in January, the Unalaska Marine Center will have 1600 linear feet of dock space, 800 feet of crane rail, and 168 hours a week available for scheduling.
Credit Annie Ropeik/KUCB

As the Unalaska Marine Center nears completion, the City Council is thinking about how to lease out the space.

"This council and the council before have approved a fantastic project that has built an incredible piece of infrastructure for our community that will last somewhere in the realm of 50 plus years," said Ports Director Peggy McLaughlin at a Dec. 11 council meeting.

McLaughlin explained terminal service agreements -- which favor competitive bid processes, but don't require the city to go out for a bid.

"It does not require bidding, but it does require that we are able to defend our position in offering up positions," McLaughlin said. "The Unalaska city code of ordinances requires us to do a competitive process for land leases and our terminal services agreements will include land leases."

When finished in January, the Unalaska Marine Center will have 1,600 linear feet of dock space, 800 feet of crane rail, and 168 hours a week available for scheduling.

Signing a terminal service agreement McLaughlin explained benefits both the city and the users. The agreements provide users a consistent window to use the space and predictable rates. Plus, McLaughlin says it gives organizations a reason to invest in Unalaska.

"When they go to their board of directors or their headquarters, they can sit down and say we have a 5-year, a 10-year, whatever it is agreement, and now we need you to invest in Unalaska/Dutch Harbor," she said.

Right now, there are six companies interested in committed berthing windows -- half requested to pay below tariff rates while two said they would pay tariff.

McLaughlin's big concern? Requests for rate reductions.

"It may be that that’s appropriate, but I think we really need to do analysis on that and make sure that we set the thresholds of where we want to land with rates with our long-term tenants," McLaughlin said. " And that we are making sure we’re not selling ourselves short on servicing out debt."

Rate reductions were also a worry for Pac Steve's Andrew Murphy.

"I'd be nervous about rate structures giving some customers favorable advantage over other customers," Murphy said. "If one person gets a favorable rate over someone else, that could give them an advantage in competition."

Looking at the existing customer base, McLaughlin thinks the new dock will allow the city to serve everyone.

"I don’t see this being competitive from the standpoint that somebody's not going to get what they need or want," McLaughlin said. "I see this being competitive in that it provides us a framework to be consistent, fair. and reasonable in how we award agreements."

The city has a 30-year bond to pay off the $39 million project. Because of that, Vice Mayor Dennis Robinson says he'd prefer longer term agreements.

"When it all comes down to it, I want to see the protection of our ability to pay our bond," Robinson said. "That's really important. I understand that if the fish quit swimming, we’re going to be in pretty tough shape."

At the suggestion of Councilor Roger Rowland, the city is now looking for an economist to review the potential rate structure.

McLaughlin would like to send out requests for proposals by January or February.