Alaska Railroad recently approved a plan for construction of a new $137 million cruise ship port in Seward that is expected to open in time for the 2026 cruise season, according to an Anchorage Daily News report.
According to the report, the railroad’s board on Aug. 1 voted to approve the purchase of the soon-to-be-built dock, which can “handle larger ships than the 60-year-old dock it will replace.”
The vote, Anchorage Daily News reports, will allow the railroad to enter into agreements with the project developer, The Seward Company, and other partners in the project, said Alaska Railroad spokeswoman Meghan Clemens, adding that the paperwork “should be signed this month.”
The deal, including debt, will be supported by “an unusual, 30-year commitment with anchor tenant Royal Caribbean Group,” according to a statement from the railroad. Royal Caribbean will have preferential berthing rights, but other cruise companies can also use the port.
“It’s a much needed and highly anticipated project for our community,” said Kat Sorensen, city manager in the town of 3,000. “The cruise ship terminal in its current state is near the end of its useful life. To continue to see the economic impacts that tourism has in our community and our state, this terminal is definitely needed.”
According to the Anchorage Daily News, the City of Seward owns the local power company and has applied for a grant from the Environmental Protection Agency (EPA) to pay for a shoreside electricity project, “which would allow cruise ships to turn off idling engines when they’re in port,” said Sorensen, adding that this would “reduce carbon emissions at the new port.”
Under the plan, Anchorage-based Turnagain, a marine construction company, will build the port and the Alaska Railroad will purchase it upon completion, according to the Anchorage Daily News report.
“This new facility supports our commitment to deliver incredible experiences to our guests while also developing a state-of-the-art facility and community hub,” said Preston Carnahan of Royal Caribbean in a statement.
According to the report, “the effort won’t be delayed by the governor’s veto this week of a bill that would have provided legislative approval to issue bonds to help pay for the project,” said Mickey Richardson, head of the Port of Tomorrow, which owns The Seward Company.
The bill, Anchorage Daily News reports, was one of five adopted by the Alaska House of Representatives after the constitutional deadline for the end of the legislative session. The governor had said the bills “could face legal challenges,” leading to his veto.
According to the report, Alaska Railroad “had already been pursuing alternative sources of funding in case a veto occurred,” Clemens said. The railroad will use a commercial loan, along with approval from the Legislature in 2022 for issuing $60 million in bonds, “to provide money up front.”
The primary cost of the project, including debt and maintenance over the decades to come, “will be covered by revenue from Royal Caribbean’s long-term commitment,” said Richardson, adding that “Alaskans won’t bear the expenses for the project.”
“It’s a clear win-win for the community of Seward, the railroad and the travel industry,” he said.
“The existing passenger dock, owned by the railroad, must be replaced,” said Alaska Railroad CEO Bill O’Leary, according to the report.
The new facility, Anchorage Daily News reports, “will include a 68,000-square-foot terminal building. A 150-foot transfer span will connect cruise travelers to an Alaska Railroad train and other ground transportation.”
“The 750-foot, two-berth floating dock will be the largest floating pier in the state,” said Turnagain President Jason Davis in a statement.
Construction on the terminal is scheduled to begin this autumn after Seward’s cruise season ends, Richardson said. Construction of the pier will occur next autumn “to avoid disrupting next summer’s cruise season,” according to the report.
