The Alaska Railroad this week 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 season.
In a special meeting Thursday, the railroad’s board voted to approve the purchase of the soon-to-be-built dock that can handle larger ships than the 60-year-old dock it will replace.
The vote will allow the railroad to enter into agreements with the project developer, The Seward Company, and other partners in the project, Meghan Clemens, a spokesperson with the railroad said. The paperwork should be signed this month, she said.
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.
[With commitment from Royal Caribbean, Alaska Railroad advances $137M plan to revamp Seward dock]
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“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.”
The city of Seward owns the local power company and has applied for a grant from the Environmental Protection Agency to pay for a shoreside electricity project, which would allow cruise ships to turn off idling engines when they’re in port, she said. That would reduce carbon emissions at the new port, she said.
[A dock project in Seward will bring even bigger cruise ships to Southcentral Alaska]
Under the plan, Anchorage-based Turnagain, a marine construction company, will build the port.
The railroad will purchase it upon completion.
“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,” Preston Carnahan of Royal Caribbean said in the statement.
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 was one of five adopted by the Alaska House 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.
The 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.
Richardson said 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.
Alaskans won’t bear expenses for the project, he said in an interview.
“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 Bill O’Leary, chief executive of the Alaska Railroad.
The new facility 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, Jason Davis, president of Turnagain, said in the 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.
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