February 25, 2011 • Vol. XXXIV, No. 3

Big Broadway Bump

The white stuff finally arrived in full force Valentine's weekend, as a foot of snow fell on the community and did not wash away, as with past storms this winter. Municipal crews made huge piles at Broadway intersections. Residents drove around the 10-foot-high white roundabouts until the snow was hauled away.

Photo by Andrew Cremata

Bar Wars


P&Z denial of previously unrequired
conditional use permit under appeal


A battle between bar owners, brewing since December, reached a crescendo this past week after one party was denied a conditional use permit that would have marked the first step toward obtaining a duplicate liquor license.
The denial was another setback in a process that has been fraught with postponements on a municipal level, letters from attorneys with anonymous clients, and the question of what exactly constitutes a conflict of interest.
Beth Smith, co-owner of the Skagway Pizza Station, explained that her plan was to obtain a duplicate liquor license in an effort to move the bar portion of her business to the building more commonly known as the Corner Café, approximately 60 feet east of the Pizza Station building. She said that it would free up space at the Station for more all-day restaurant seating, and in the process create more year-round jobs.
She said it would also allow more focus to be placed on the hotel portion of her business called “The Wood”. In her original application she said her plan was to build six new cottages available for tenancy between the buildings.
Smith said alcoholic beverages would be sold at both the restaurant and the bar, but her intention was to close the restaurant early yet keep the late-night bar business at the Corner Café building.
When Smith first applied to the Alcohol Beverage Control board in early November, she was notified that there were no problems with her application. The letter stated, “The ABC board relies upon the local governing bodies to review the proposed application,” and added that they would have a chance to approve or protest the duplicate license before a final determination was ultimately made by the ABC Board.
Smith said that she first approached the municipality in late October to move forward with ABC’s request for a review by the local governing body, the Skagway Borough Assembly.
The topic of a duplicate liquor license first appeared on the agenda at the Dec. 16 assembly meeting. At that meeting, Smith detailed her plans stressing that the Pizza Station would close immediately after dinner service was finished, and that it would improve the atmosphere of the restaurant during the winter.
The assembly decided to postpone any action until the Jan. 6 meeting to give them more time to review ABC policy and research the issue.
On the morning of Jan. 6, a letter addressed to the mayor and assembly from attorneys Baxter, Bruce and Sullivan was received, although it did not specify any particular client. The letter stated the firm had been asked to write to the assembly “on the behalf of a number of existing liquor licensees in Skagway….”
The letter detailed several concerns with the duplicate liquor license, including the fact that the main bar would be in a completely separate building, and the potential for an oversaturation of establishments serving alcohol in Skagway.
The letter also claimed that five bars would be operational within a three block radius during the winter months.
Smith’s attorney submitted a response to the original letter calling into question key points and maintaining that by moving the bar to a separate building it would make the hotel a more desirable place to stay. It also challenged the notion that there would be five operational bars in a three block radius during the winter months, revealing that two of them were private bars and that an arrangement was in effect with the Skagway Brew Company so that only one bar was open at a time during the winter months.
Due to the receipt of the letters from the attorneys at the Jan.6 assembly meeting, the subject of the duplicate liquor license was postponed another month until Feb. 3. During that month, more attorney’s letters were received by the municipality representing both sides of the argument.
On Feb. 3, before the assembly meeting even began, Smith was approached by Assemblyman Mike Korsmo who revealed that municipal code requires a conditional use permit from Planning and Zoning for anyone seeking to serve alcohol on lands zoned for business. The subject was removed from the assembly agenda and postponed yet again.
Korsmo said that he was doing his “due diligence” by looking into municipal code when he stumbled on the conditional use permit requirement. Apparently the pertinent piece of code was added during a 1990 zoning code revision conducted by Sheinberg and Associates. For the last 21 years this fact seems to have escaped every hired or elected official associated with the city and borough. However, the assembly will soon address exactly how to handle the fact that the majority of local alcohol dispensers are currently in violation of code (see adjacent story).
At the Feb. 15 P&Z meeting Smith presented her conditional use permit request for a bar in the business general zone. Commissioner Mike Healy, also the owner of the Skagway Brewing Co., attempted to recuse himself at the start of the meeting due to conflict of interest. He said that his own liquor license would be devalued by the issuing of a duplicate license to Smith, thus creating the conflict.
Chair Matt Deach denied the request citing the fact that there was no potential for financial gain on Healy’s part, and that he trusted that he would make an honest decision. Deach would go on to say after the meeting that his decision to deny Healy’s request for recusal stemmed from what he perceived as a directive from Mayor Tom Cochran.
In a memo dated Feb 10, Cochran wrote to P&Z on several matters and said that only “direct financial benefit” was grounds for recusal by conflict of interest.
“Any board member may and should state what they believe to be the conflict and the presiding officer has the final authority on whether to allow it or not,” reads the memo. The mayor added that it was “very rare” that one is allowed to recuse themselves.
Cochran stated after the meeting that he did not consider the memo a directive, but was merely offering guidance to P&Z on a variety of pending zoning issues.
During the P&Z hearing, Jan Wrentmore, owner of the Red Onion Saloon, revealed she hired the attorney.
“This request is for a new bar on State Street,” said Wrentmore, adding that the application caused quite a controversy in Anchorage with ABC because it relates to how to deal with a duplicate license that is part of a “compound.”
She said the approval would create a “dangerous precedent in Skagway,” and then showed a map of every bar and hotel in town which could apply for a license or duplicate, warning of a “proliferation.” Deach told Wrentmore that her comments “have no relevance as to whether a café should be turned into a bar,” yet allowed her to continue on the same topic.
Wrentmore said the “compound,” comprising the Pizza Station and Corner Café buildings, would exceed the square footage of the hotel and that the application could knock the Skagway Brew Co. out of business.
Smith took issue with Wrentmore’s comments and said that they should have been saved for the Feb. 17 assembly meeting, which would deal with the license request before the ABC.
Deach said later that Wrentmore’s comments had “no place” at the hearing, but that it is often difficult to interrupt public testimony.
Smith said that she would have only one liquor license, not two, and that her goal was to move the bar clientele to a new spot so as to encourage more hotel rooms.
“We are not trying to convert more drinkers,” she said.
While Deach and Commissioner Mark Schaefer both supported the permit request, Healy and Commissioner Rocky Outcalt voiced concerns over public health, safety and welfare.
“I believe it could lead to an oversaturation in our community,” said Healy, who added that he was more concerned about what might occur in the future if bars were to proliferate.
Outcalt said, “I don’t see how booze protects public health,” and that he would not be voting for it.
Outcalt may have also been confused about what exactly was being voted on. While the vote was supposed to have been about whether to allow a bar in the business zone, Outcalt said out loud that he thought the commission was voting on a duplicate license.
When asked for a clarification, Outcalt said later that he was “not at liberty to discuss” the issue and added, “I don’t have to explain why I vote a certain way.”
The motion failed 2-2.
Two days later, at the Feb. 17 assembly meeting, after a large outpouring of support from neighbors of the Station, Smith announced she would be appealing the P&Z decision and accused Healy of abusing his seat.
Smith submitted a petition with about 200 signatures in favor of her plan, and more letters of support from neighbors.
Smith argued that her duplicate license was not transferrable and held no monetary value. She said that she was trying to clear up rumors and conjecture created by Wrentmore’s attorney’s correspondence.
The assembly decided to defer action to the March 3 meeting, in order to meet the 60-day deadline that is imposed by the ABC from when they receive an application. This means the assembly will have to meet as the Board of Adjustment to hear the appeal, and then decide whether to support Smith’s duplicate license during the regular meeting.
Healy later responded by phone to Smith’s charges that he abused his P&Z seat. He said he was taken aback by Smith’s comments and that “Up until now, I considered Beth a friend.”
Healy said he asked to be recused, and when it was denied didn’t know what else he could do. He added that he was disappointed in all the “mudslinging” going on, and that it appeared Smith was garnering public opinion while getting away from the real subject.
“This is a simple P&Z issue,” said Healy. “And there is too much smoke and mirrors.”
The day after the meeting Smith said, “This whole thing has been smoke and mirrors, the main issue here is competition.”
Smith explained that she feels both Wrentmore’s and Healy’s actions stem from the threat of competition and have nothing to do with their claims that they are concerned with oversaturation of bars in Skagway.
She said Healy called her an hour before the P&Z meeting to say he would be recusing himself, and that he was “aligning himself with Jan (Wrentmore).”
Healy said he made the call in a friendly manner and that he did support many items in Wrentmore’s attorney’s letters. “Not all, but many,” he said.
Smith said Healy called again after the meeting and left a message stating that he would have supported the application had it specified that only beer and wine would be served in the restaurant.
Smith said she was frustrated by all the delays and that it was becoming less likely they could ready for the upcoming 2011 tourist season.
Wrentmore, who also opposed the Pizza Station’s efforts to convert to a full service bar a few years ago, said by telephone later that competition was not the issue. She said the Brew Co. and Red Onion have similar clientele that was different than that of the Station, which attracts more of the “old Moe’s crowd.”
Wrentmore said her lawyer’s correspondence kept the clients anonymous because there were multiple parties who supported the content, including Healy, although she was the person paying the retainer.
Wrentmore said her main concern was the precedent being sent by granting the duplicate license. She said that persons serving on P&Z and the assembly often fail to look ahead and often just don’t want to tell business owners “no.”
She said a proliferation of bars was not the “economic development we want in Skagway.”
Mark Smith, co-owner of the Pizza Station and husband of Beth Smith said via telephone, “We’re trying to do everything by the book, following the laws and regulations put forth by the borough and the state, and we’re getting slapped around for it.”

Return of the code haunts licenses

With the sudden realization that the majority of Skagway businesses serving alcohol are in violation of municipal code, the borough assembly is trying to ascertain the best course of action.
The Alcoholic Beverage Control board meets on March 4, leaving little time for the issue to be resolved before a host of Skagway businesses need approval from the assembly for liquor license renewal.
During this time the assembly will also have to field public commentary concerning various business’s liquor license renewals, some of which has already taken a negative tone.
At the Feb. 17 borough assembly meeting, Mayor Tom Cochran confirmed that code revisions made in 1990 required a conditional use permit be obtained if alcohol was being served in the business general zone. Cochran said that anyone opening their business before 1990 was “grandfathered in,” but would not be considered as such post-1990.
In the last 21 years, numerous hotels and bars have either opened for business or done extensive renovation, yet neglected to seek the necessary permit. The municipal oversight wasn’t discovered until Mark and Beth Smith sought to obtain a duplicate liquor license for the Pizza Station so as to move the bar to the Corner Café building on their property. Assemblyman Mike Korsmo found the pertinent section of code and brought it to the Smiths’ attention.
The Smiths’ permit application was denied and is pending appeal. Their denial raises other questions, such as what would happen to an active business if they were ultimately denied the conditional use permit at the P&Z level?
While municipal officials agree that this scenario is unlikely, Assemblyman Dave Hunz said that all of the businesses were currently in violation of code, since they now know that a permit is required.
Cochran said the ordinance could be repealed or the business owners could be required to obtain the permit, but either way, “we need to clean up our house.”
Hunz suggested keeping the ordinance, as a conditional use permit allows for oversight when dealing with bars/hotels that may not be following the rules.
The assembly agenda was to address liquor license renewals for six businesses, but the items were tabled until the March 3 meeting to provide some time to come up with a plan of action.
Still, during the public comment portion of the meeting, property owners adjacent to the Skagway Brewing Company voiced a series of complaints concerning noise, public urination, trespassing, and improper disposal of hazardous materials.
A letter detailing grievances, along with a series of photos, was submitted by Vanessa Flynn, and Tony and Kody Kosters. The letter also requests that the assembly review the information before considering the liquor license renewal of the Brew Co.
Neighbors also complained that they were told by the owner before the business opened that it would only serve beer and wine and would be closed by 10:00 p.m.
Brew Co. neighbor Randy Wiley took the stand with his daughter Samantha and explained he was teaching her about local politics. He said that Samantha could also put a face to the ongoing problems he was facing with the Brew Co.
Wiley said that Samantha’s room faced south and that during the summer it was impossible not to be inundated with noise and profanities emanating from the Brew Co, especially when it was hot and the window was open. Wiley said he felt as though his concerns had been ignored by both Healy and the authorities.
“Alcohol has definitely had a negative impact on our family,” he said.
In another letter presented to the assembly dated July 8 and signed by Flynn and Kody Kosters, allegations were made that Healy abused his seat on P&Z by threatening them with an attack on their property rights. The letter states that Healy was acting out of retribution for comments made by Kosters that he was going to contact ABC with a list of Brew Co. violations. Kosters claimed it was the second time he was threatened by Healy, but the first time there was no other witness present.
Healy, who was out of state at a wedding last week, said by telephone that the allegations were false and that he never threatened the Kosters with retaliation.
He said he was disappointed that he was not notified by the municipality until the day of the meeting that his liquor license was up for renewal or he would have been there to defend himself.
Allegations against Healy continued when Beth Smith stated that she thought he abused his position by voting against her permit application (see adjacent story).
Assemblyman Tim Cochran said the noise issue needed to be addressed by the assembly due to the fact there were 31 separate complaints made to police against the Brew Co. in two years.
Whatever the assembly ultimately decides as far as code is concerned, the Planning & Zoning Commission is likely to have its hands full if every bar and hotel in Skagway has to follow the same guidelines to obtain a permit as the Smiths.
At the close of the meeting, Assemblyman Dan Henry said, “We have some serious issues to discuss at that next meeting.”
Meanwhile, a new noise ordinance is being developed with the intention of giving police more authority when dealing with noise complaints.
A draft ordinance was reviewed at a Public Safety Committee meeting on Wednesday after this issue’s deadline. – AC


Younger sea lion may have been sick

Tests being performed on both animals that died


Two Steller sea lions found within two weeks of one another in Skagway waters have both undergone necropsies by NOAA, but it may be some time before anyone can make a guess as to what caused their deaths.
During a necropsy in Skagway it was ascertained that the adult female sea lion found in Nahku Bay by Dorothy Brady was most likely killed by blunt trauma. However, an immature sea lion found two weeks earlier near the Ore Dock was scheduled for a necropsy on Feb. 10.
There had been speculation that the immature sea lion had been killed by blunt trauma or a gunshot wound, but the necropsy proved otherwise.
Kaili Jackson, Assistant Training Coordinator for NOAA, said via telephone that there was no evidence the smaller sea lion had been killed by any blunt force or trauma. She explained that the animal was very small and showed signs of malnourishment, an indication that it might have been sick at the time of its death.
Jackson said it was also possible that the animals could have met their demise south of Skagway and were carried north by the tide. Still, the bodies were quite fresh, so it was unlikely they were in the water for very long.
Jackson said there was no way to be certain what the causes of death were for either animal, but biological samples were sent to the laboratory to try and ascertain a cause.
Results from those tests will most likely not be received for at least a couple of months.

New person in power at AP&T

Belisle addresses new tower, community needs


Changes are afoot at the Skagway branch of Alaska Power and Telephone. Not only is there a new face sitting in the manager’s chair, but the construction of new microwave tower could bring more reliable wireless Internet to the valley.
Darren Belisle, a longtime employee of AP&T, took over the manager position when Stan Selmer retired last year. Belisle said the transition has been a smooth one.
“Stan ran me through the ringer before he retired,” said Belisle joked in an interview at his office.
Belisle took some time to answer questions about AP&T’s plans for the future and whether Internet service in the valley could be improved.
At the Feb. 3 assembly meeting, Belisle proposed the construction of an 80-foot tall microwave tower on the hillside. The location of the tower is paramount as it has to have a clear line of sight to Haines to be effective. The link the tower will create is the last part of a microwave network that spans all of Southeast Alaska.
Belisle explained that the tower acts predominately as a redundancy system. Currently, all land line and Internet communications in Skagway are handled by a submarine fiber cable to Haines.
“When it fails, it is a six month repair,” said Belisle. “Notice I said, ‘when.’”
The microwave tower will create a backup to the submarine cable, and Belisle said it should also help ease heavy Internet loads during the summer season.
Belisle said that AP&T would like to have the tower finished by the end of June, and he is currently working with the municipality to secure the location for the tower either by leasing or purchasing the land.
A variance was granted for the tower at the Feb. 15 Planning and Zoning meeting. There was little public comment, but neighboring property owner Ken Russo said he had concerns that more towers could be built on the land.
Belisle said that WiFi could be added to the tower and it would significantly improve wireless Internet in Skagway. Currently, one must be in an AP&T hotspot to utilize wireless Internet and it is often unreliable. By adding WiFi to the tower the entire valley would have wireless Internet coverage, which is a cheaper alternative to other DSL options offered by AP&T. Belisle said that there were some within the company who were in favor of adding WiFi to the tower and some who were opposed, but he was optimistic that the improvements would be made.
When asked why Internet service offered by AP&T is so much more expensive than carriers down south, Belisle said that it was due to a smaller customer base and the rugged geography of the Southeast landscape.
“Bandwidth is also very expensive,” he added.
Belisle said another big project was on hold. Power lines in Dyea that are currently overland need to be buried underground. However, until the state finishes their work on the Taiya River bridge, AP&T cannot proceed because the lines would have to be dug back up when the state starts the project. The cost of digging up the cable would fall to AP&T and not the state.
The bridge was to have been repaired by the state last fall, but that date has been moved to late this September.
Belisle said the West Creek hydro project was no longer a priority as grant application fees for a feasibility study were not submitted on time by the municipality.
Belisle also wanted to remind customers needing power hookups that they could not come in the one day hoping to have service on the next. He explained that the regulatory commission of Alaska requires 45 days notice but, “Two weeks would be nice.”
Belisle urged that clients needing power hookups make an appointment to see him directly and he would be happy to address their needs.

PASSERSBY  – Three harbor seals found a sturdy enough slab of ice to lie on last Sunday as they drifted with the tide at the mouth of the Taiya River in Dyea. Photo by Jeff Brady

Port getting noticed: Commission members report favorable Roundup


The Skagway port certainly is getting more visibility these days.
Mayor Tom Cochran testified before the Senate Finance Committee Wednesday on Gov. Sean Parnell’s proposed capital budget item for $10 million for Skagway dock improvements. A report on this hearing will appear in the next issue.
In late January, Skagway Port Commission chair John Tronrud and member Gary Hanson returned from the annual Minerals Roundup in Vancouver, BC with Assemblyman Dave Hunz and municipal lobbyist John Walsh. White Pass vice president Michael Brandt also was there.
During a Port Commission meeting on Jan. 31, all said it was a valuable experience. They had further meetings with Selwyn and Western Copper, a mine that could be just as large, and said they toured a modern port facility in Vancouver that was loading two ships.
Walsh said it is now known that Skagway clearly has the “location advantage,” but there are still questions from potential Yukon shippers about congestion and the flow of materials through the port.
Brandt was asked if the railroad was looking at getting up and running for a ore haul, at least from Skagway to Whitehorse. He responded that they are working on a “best case real estimate” for improving the line to Whitehorse first before they look at an extension to Carmacks. This also would involve obtaining new environmental permits.
“If three or four of these mines produce to these levels of up to 100 trucks a day, that makes the railroad viable,” Tronrud said.
“The potential for the port is pretty staggering,” added Tim Bourcy, the former mayor who was recently appointed to the commission. He suggested using some of the money in an escrow account from White Pass to address contamination issues under the ore dock from unregulated operations in the 1970s. Walsh suggested a meeting with the Department of Environmental Conservation and AIDEA first in an effort to pool studies about what should be done before construction proceeds.
“We have to look at the overall picture and take into account all the uses of the port, including visitors,” Bourcy said.
It was noted that a final report from DEC should be available soon. A preliminary report found more of an issue now with hydrocarbons in the sediments of the ore basin than lead-zinc.
The borough is currently working on a mitigation plan for a Army Corps of Engineers permit for the Gateway Project that would involve correcting a problem with Lillegraven Creek’s outflow caused during construction of the Skagway River flood control dike.
At the commission’s request, the assembly is sending a letter to the state-licensed port captains who bring big ships into Skagway to make them aware of Skagway’s dock expansion plans.
The commission also said having adequate upland storage available will be necessary, and voted to urge the assembly to address zoning conflicts along the Klondike Highway across the bridge “to protect the industrial uplands.” The assembly has set a joint work session with P&Z on March 15 to address the uplands issue, along with other topics.
Another executive session on tidelands lease negotiations is being held today during a special assembly meeting at 3 p.m.

SCHOOL FEATURE: Skagway team bonds at State DDF

MUSHING FEATURE: First time Iditarod musher worked in Dyea

BOROUGH DIGEST (complete digest in print edition)

Public Safety building plans
 A conceptual plan for a new public safety building to house all of Skagway’s emergency services – police, fire and EMS – could be a reality by the end of the year, along with the start of a funding mechanism.
The Public Works and Public Safety committees held a joint meeting Feb. 15 to look over a computer drawing that Police Sergeant Ken Cox made after attending a workshop with Fire Chief Jeremy Simmons last year.
The building’s dimensions would fit on vacant municipal property at 18th and State, in front of the new water booster station.
“We needed an idea to work from,” said Police Chief Ray Leggett.
The drawings show the basic design of a two-story structure that would take up ground about 195 feet wide by 154 feet deep. It would include six or seven bays for vehicles, offices for all emergency personnel, a dispatcher center, booking room and jail cells, training and conference rooms, and a recreation room. All agreed it could be scaled down.
The next step is putting out a Request For Proposals for a firm to develop a conceptual plan for the facility. There is $150,000 in the current budget for the plan.
“We need conceptuals to get a better idea of the cost,” said Public Works chair Dave Hunz.
Along with the conceptual plan, soil samples and testing of the ground at the proposed site are needed because it would be near a water source.
Simmons said he and Cox plan to attend another conference this April to hone their ideas. Although the meeting focuses on new fire halls, many across the country are combining emergency services into one facility.
Committee members agreed that the building would save on heating costs versus having two facilities, and allow some consolidation of office staff and computer systems to save money.
The two committees discussed setting aside money each year in sales tax funds to get a start toward building a construction budget. Recommendations ranged from $350,000 to $750,000 a year to build a nest egg, and then go after a bond issue, along with matching grants from state, federal or private sources. Leggett said Skagway’s largely volunteer firefighting force makes it easier for applying for grants.
The building likely would be larger than the new Rasmuson Health Center, and may require just as many funding sources.
“This easily could be in the $10 million range,” Hunz said.
The borough assembly pulled a $3 million bond issue for the public safety building off the May 11 special election ballot because the building’s planning was not far enough along. It was mentioned that the idea could be floated in the fall election.
“The longer we wait, the more it will cost,” said Public Safety chair Tim Cochran.

Fish Co. lease extension will wait
 Assemblyman Dan Henry excused himself from voting on a request that his Skagway Fish Co. lease be extended, but he argued his case.
Henry said that he should not have to pay for a new appraisal since he did not receive the most recent June 22, 2010 appraisal until December. He had submitted the extension request in January.
He originally had asked for a 10-year extension after his lease expires in August 2012, but the assembly had asked for that to be changed to end in 2018 at the same time as the neighboring Stowaway Café lease.
Henry said he was agreeable to the shorter lease extension, but wanted a waiver of the requirement for a new appraisal. Borough code requires appraisals within six months of a lease, but the six months was up. Henry argued that if borough staff had been more timely in getting the June appraisal to him, then he would have made his lease extension request sooner.
Borough Manager Tom Smith admitted that “staff was remiss, it took almost six months.”
But Dave Hunz said they can’t make exceptions, saying Henry still had time to file the extension request.
But Henry said it was not fair that he and his wife had only 10 days to make a decision, at a time when he was traveling to deal with a family member’s health. Hunz said he was sorry, but “We have to be firm, that’s the way it is.”
Colette Hisman said it may be best just to let the lease run its course, and Henry can apply for a new extension next year. In that case, he would only have to pay for two appraisals instead of three, as leases must be re-appraised every five years.
After some confusion, the assembly, with Henry abstaining, on a 4-0 voted accepted the appraisal from last June with an annual lease amount of $8,640.
Assemblyman Paul Reichert then moved that the extension to 2018 be granted based on the June appraisal, but it failed on a 2-2 vote. Tim Cochran voted for it, while Hunz and Hisman voted against it.