September 24, 2010 • Vol. XXXIII, No. 17

Jump Starter

David Osmond of Skagway leaps high in the air as Steam Engine No. 73 blows its whistle to start the 29th annual Klondike Trail of ‘98 International Road Relay. See our KRR Feature Story and Photos.

Photo by Jeff Brady

‘Bear bungalow’ approved by P&Z, then draws appeals


Two of the things tourists are arguably most eager to see when visiting Alaska are bears and sled dogs. One local Skagway tour operator has designs on constructing a facility that would encompass a sled dog demonstration, bear viewing habitat, and café all in the same location. While it remains to be seen if the idea is one that would resonate with potential visitors, some owners of neighboring properties are concerned over a variety of questions they believe have not been answered.
At the Sept. 9 Planning and Zoning Commission meeting, a conditional use permit for the tour attraction was granted to Robert Murphy, owner of Alaska Excursions, by a 3-0 vote. Even though Murphy’s property, located just north of Jewell Gardens, is zoned industrial, a conditional use permit is required for the proposed bear viewing habitat.
Only kennels and farm animal enclosures are allowable uses in code for an industrial zone.
At the meeting, some neighboring property owners voiced concerns over the proposed tour facility. While most objections focused on the potential for noise in the area due to barking dogs, others were worried about safety and aesthetics.
Dyea Road resident Dave Shirokauer said captive bear viewing was “selling ourselves short.” He added that visitors wanted to see wild bears and that he would support wild bear viewing in Dyea.
Tom Hall, owner of the Klondike Gold Dredge, said the application was vague and requested the commission ask for more details before approving the permit.
In a letter to the commission, Boyd Worley said that the border protection personnel lived across from the property and called the dog sled operation an “inconsiderate proposal.” He wrote, “Puppies may be cute, but barking dogs do not make good neighbors.”
Thor Henricksen stated that he had no problem with a bear viewing habitat in the area, as it would create a year-round job for a caretaker. “If (a bear) gets away and comes to my house I’ll be happy to shoot it,” he said.
Alaska Excursions business manager David Osmond stressed that the bear viewing habitat was not for rehabilitation of bears, as there had apparently been some previous miscommunication. He said the facility would be an “eye-appealing mini city,” and a real, hands-on Alaskan experience.
He said the bear habitat was tentatively being called a “bear bungalow,” and would house up to three bears with a gift shop and café that exited to a “wilderness outback fort.”
Osmond said that habitat construction and oversight were regulated by state and federal governments. He explained that most orphaned bears do not survive in the wild so the habitat would provide an “orphan home” for bears where they could live “20 or 30 years.” During the meeting, Osmond handed out a paper not included in the original application that explained the layout in more detail, but only commissioners had access to it.
He said the sled dog camp would hold 10 dogs and two litters of puppies, and that even though there would be no indoor housing for the dogs, he did not expect any noise from them after 7 p.m. This was because the dogs would be fed before that time and they make most of their noise when being fed.
Commissioner Matt Deach, acting as P&Z Chairman because chair Murphy had recused himself, opened the discussion and said that a lot of hoops had already been jumped through, and that he would like to see more tourism in the area.
After a short deliberation, the permit was approved with the stipulation that it be reviewed in one year and there be no more than three bears, 10 adult dogs and two litters of puppies at the facility. The vote was 3-0 by members Deach, Spencer Morgan, and Rocky Outcalt. Mike Healy was absent.
By Sept. 17, three appeals to the decision had been submitted to the municipality. Hall, Charlotte Jewell, and adjacent property owners Darrell and Kareen Hoover all cited multiple reasons for the appeal.
They all cited a portion of code that says all pertinent materials be made available to the public, and argued that materials given directly to the commission by Osmond were not included in the packet.
The Hoovers said that little regard had been shown for the concerns voiced during the meeting and many of the issues raised had not been addressed.
Numerous objections were raised by Jewell including matters dealing with sewage, public health, safety, and the welfare of the neighborhood. Jewell also cited code that says the permit must be “desirable” to the surrounding community and wondered if public testimony suggested otherwise.
Jewell also reiterated that the plans for the design had only been shown to the commission and were never made available to neighboring property owners or the public.
The appeals will be heard at a special October 6 meeting where the assembly, acting as the Board of Adjustment (Appeals), will decide whether to uphold the P&Z’s decision.

UPDATE: The Oct. 6 hearing has been postponed to a later date at the request of one of the persons who filed an appeal. This is allowed in borough code if the request is made at least three days before the scheduled hearing.

Pitching the port

Borough requests $10 million from state, plans presentation to ‘dovetail’ White Pass push for extended rail line to Carmacks


The Skagway Port Commission is gearing up for a series of fall-winter meetings in which they hope to lure more Yukon mining customers to the port.
This comes as the Skagway Borough Assembly awaits a formal request for a tidelands lease extension from White Pass, and seeks both federal and state funds for expansion of the ore terminal and dock.
A month after submitting a federal TIGER II grant request of $11.5 million for a new ore ship loader, the borough passed a resolution requesting $10 million in cruise tax funds in the upcoming governor’s budget for an extended ore dock. The goal is to have a facility that can accommodate both an ore ship and a cruise ship at the same time, and two large cruise ships when an ore ship is not in port.
The $10 million for the dock extension would be part of a broader $44.4 million Gateway Project which “will attract year-round economic development to an otherwise seasonally distressed rural region,” the resolution stated. Other elements of the Gateway Project are the new ship loader, an expanded ore shed funded by AIDEA, and a new access dock contributed by White Pass.
But at Monday’s Port Commission meeting, White Pass president Eugene Hretzay dropped a new idea into the mix, saying he wants to see if it is feasible to extend the Broadway dock to handle two cruise ships.
“That helps me and it helps the ore handling,” Hretzay said.
Commission chair John Tronrud was cautious, saying “it gets real deep real fast” off the south end of the Broadway dock. He also noted that when White Pass first looked at this idea, they were told by the state that a dock any further south would not be possible because of the ferry terminal. Hretzay responded that they could pay to move the ferry dock “to the other side.”
Hretzay noted there is interest now in the port from both the Selwyn and Casino mines. Selwyn is in the eastern Yukon and Casino is in the western part of the territory. Both could be served by an extended rail line from Whitehorse to Carmacks. Hretzay said Selwyn is also trying to convince him to have a spur go from Carmacks to Ross River. He said Casino is interested in a backhaul of LNG (liquefied natural gas) to be used to power its copper-gold mine, which he has been told would be four times the size of Selwyn’s zinc-lead mine. He said Casino is interested in subleasing land next to Petro Marine for LNG storage.
White Pass is developing a PowerPoint presentation that would promote the rail links, and the borough assembly recently authorized spending up to $5,000 on a presentation about the port. Consultant Paul Taylor said there already was a good PowerPoint that was produced with the port study a couple years ago. Mayor Tom Cochran suggested “a brand new one, with parts of the other one,” and commissioners agreed the old one will be a starting point and can be updated with new photos. The municipality had already hired Andrew Cremata to shoot photos of next week’s ore ship, due in on Sept. 28.
Member Steve Hites said the municipality’s PowerPoint could then “dovetail” White Pass’s presentation. He said he would be able to attend the Anchorage sessions and work to make sure the tourism industry got behind the idea of expanded docking facilities in Skagway.
“There will be no opposition from the (tourism) industry,” he said. “This is the only area I think where a cruise ship head tax should apply.”
They hope to have the PowerPoint ready for the Yukon Geoscience Forum in Whitehorse Nov. 21-24, which draws a lot of mining companies. It also would be presented to the Resource Development Council and the Alaska Port Conference a few days earlier in Anchorage, and to a Vancouver mining conference in January.
But first, some will be attending a “signing ceremony” Sept. 29 in Whitehorse for the Selwyn mine. Alaska Governor Sean Parnell is sending his labor commissioner, a deputy commissioner, and Jim Hemsath from AIDEA, said borough lobbyist John Walsh, who will be driving up with Tronrud and the mayor. Terry Hayden, the Yukon government’s liaison on the port commission, said it would be a good time for “government-to-government” discussions.
Hretzay said he is ready to meet with governments, but Hayden said they will need to see a business case.
“My powerpoint is the business plan,” Hretzay said. “At the end of it, we will ask for money, or a green light to start the permitting process.”
Hemsath participated via teleconference and commissioners got a look at an early draft of a “lead handling study” produced by R&M Engineers for AIDEA, which addresses building out the ore terminal and a new washout system at a cost of about $17 million.
AIDEA, the state development agency, currently has the sublease of the ore terminal and is interested in seeing the lease extended. Hemsath noted that the agency is mandated by the state and its board to have a finance plan that shows a revenue stream that will pay for AIDEA’s investment. He mentioned seven years as not being enough time for paying off the proposed expansion beyond the $5 million the agency committed to in the TIGER II grant.
“It’s not the full extent to what it could be,” Hemsath said.
A recent memorandum of understanding with White Pass and estoppel agreements approved by the borough assembly have allowed for discussing an extension of the large tidelands lease that expires in 2023. The lease includes the ore terminal and dock, Broadway dock, and subleased areas to AIDEA, Petro Marine, TEMSCO, and Alaska Marine Lines.
As part of the MOU, Hretzay was allowed a seat as a liaison to the commission, but the municipal attorney recently reiterated an earlier opinion that a sole designated seat for a private company would not be in the best interest of the borough and could be challenged. The commission voted on Monday to ask the borough assembly to rescind the part of the ordinance that created the White Pass seat.
Tronrud and the mayor said the problem is having the seat designated in code. They noted that other port business representatives sit on the commission but do not have designated seats.
“We still want your input and need your input,” Tronrud said to Hretzay.
The White Pass president was not concerned.
“I will come here on the basis of the MOU,” Hretzay said, and then joked about whether he’d still be able to get a sandwich during lunch meetings.
At the end of the meeting, the focus turned to getting regional support for Skagway’s port development.
Former assemblyman and candidate Mike Korsmo, who is the head of the transportation committee for the Southeast Conference, said a resolution in support of the TIGER II grant was passed on to the conference board, but it was “watered down” by the board to support all communities in the region that applied for grants.
“As a former president of Southeast Conference, that’s typical,” Tronrud said of the more generic resolution.
Hretzay held up a recent Wall Street Journal that showed a headline, “Unfreezing Arctic Assets”, and stressed that a message needs to be delivered to politicians that shipping minerals from the North to manufacturing centers in the U.S. and southern Canada will get them back to being number one in manufacturing. After the meeting broke up, members and others looked at a map and discussed how an extended White Pass line would be a spur off an expanded line connecting the continent, and could be the first segment built.
But at a projected cost of $2 million to $5 million a mile, depending on the terrain, the money has to come from somewhere, and right-of-way agreements would have to be secured.

ENGINE DELIVERY – On Sept. 16, White Pass welcomed home the fourth engine completed in the repowering program initiated last year. Diesel No. 91 was rolled off the barge from Washington on its special carrier, and then the 230,000 pound engine was lifted with four 100-ton jacks so the carrier could be removed a wheel section at a time. The engine was then lowered, started up, positioned on the tracks, and off it went. Later that day, crews loaded No. 94 on the carrier to head south. Jeff Brady

Cruise West owner ‘heartbroken’ as decision made to cease operations

A little more than a week after announcing it was restructuring under new owners, small ship operator Cruise West decided to go out of business.
“For the last year Cruise West has aggressively pursued a number of options with interested parties to maintain operations, including investment, selling assets, and selling the company,” it stated in a press release on its website on Sept. 17. “In part because of the most recent dip in the markets and the continued lack of economic confidence, these options have not come to fruition.”
Dick West, the owner of the company and son of the late founder Chuck West, said, “I have never given up hope that we might be able to find a way to survive by working with various interested parties. I am absolutely heartbroken that this family legacy has come to an end.
“We have a product that appeals to the type of traveler who wants to experience the destination, not the inside of a ship. We have a passionate following of repeat guests and I am particularly distressed that our most loyal guests who have booked with us will now not be able to travel. We have done absolutely everything to maintain operations, but with limited resources and the current tight financial market, we simply cannot continue.”
The company said it would cease operations the next day, Sept. 18, except for one cruise on the Danube that would still sail Sept. 22. All of its Alaska cruises for the season had just ended.
A week earlier, when it announced on Sept. 8 that it was in the process of restructuring, there was hope in Skagway that the small ships would be saved by new owners and keep coming to Alaska.
“It’s a very sad and unfortunate turn of events for Alaska tourism,” said Steve Hites, whose Skagway Street Car Co. was used by the cruise line for various tours and shuttles to the train. “Cruise West provided a unique product with their small ships that added diversity for the visitor that was unlike any other available in the marketplace. Their presence in Alaska will be missed not only by suppliers and vendors, but especially by the traveling public.”
Cruise West brought about 2,800 passengers to Skagway this year, but its numbers had declined in recent years as it reduced the number of ships calling here from seven to four.

MYSTERY PISTOL – This gun was found in a wall of the YMCA where it was lowered by a pulley systen to its hidden spot. KGRNHP

NPS finds old S&W pistol hidden in YMCA wall
The restoration project at the old YMCA building at 5th and State has taken a mysterious turn.
Last week, Doug Breen, maintenance worker for Klondike Gold Rush National Historical Park, was the first to notice a Smith and Wesson pistol lying on a ledge within the north wall of the historic YMCA, according to a park press release.
It was found next to a ball of string and a small metal pulley in the wall, so it was likely lowered to its hidden resting spot.
The NPS work crew was taking down interior walls as they continue their restoration work on the YMCA and the adjoining Arctic Meat Co.
The pistol was immediately given to the park’s curatorial staff for analysis. The gun was found to be manufactured in Springfield, Mass., during the years 1878-1892. It is a single action, .32 caliber, and rim-fire, pistol with a bird’s head grip and spur trigger. The description is the easy part, however the circumstances surrounding the pistol’s location in a sealed wall remain a mystery, according to the release.
The YMCA is a wood frame gymnasium, constructed in 1900, and originally contained a gym, baths, handball court, photo darkroom, and reading room. In 1902, butcher Herman Meyer bought the building and, after moving it to State Street, remodeled it by inserting meat lockers with sawdust insulation into the western side of the building.
The Skagway YMCA is the first one established in Alaska and was the base of operations for creating other YMCA’s throughout the state at that time. During stabilization work this summer, NPS staff uncovered portions of the original gymnasium floor with portions of the paint lines still intact, as well as a beaver felt hat pre-dating 1901 found below the floor.

2010 Municipal Election Forum

BOROUGH DIGEST (complete digest in print edition)

Murphy pitches second slough crossing to committee
Alaska Excursions owner Robert Murphy is again seeking a cost-sharing arrangement with the municipality for a second crossing of Nelson Slough on borough property on the Dyea Flats. The issue came before the Parks and Recreation Committee last week.
As the primary user of the area, Murphy told the committee that his company would see the most benefit from a bridge, but it would be on municipal property and would also access municipal lands west of the creek.
Because access is limited to his private land across the slough, employees currently use a parking area at an intersection on the flats. They escort his customers – on as many as 18 tours a day – over a footbridge to his dog musher’s camp on his property along the hillside.
Murphy said employees are allowed by the Dept. of Fish and Game to drive vehicles through the slough when salmon are not spawning, but that he would prefer a bridge to keep his vehicles dry and get them off the flats.
There are two less expensive options, he noted, but they would not work as well. A hardened crossing of packed rock and concrete could be placed where the vehicles cross, which would prohibit salmon from spawning in the area of the ford. Murphy said that option is preferred by Fish and Game but does not keep his vehicles dry. Another option would be a culvert, but Murphy said it would have to be big enough to handle tides over 20 feet and there would be a risk that the culvert could be blocked by debris on the outgoing tide or during a rain storm.
“Ultimately the best solution is a bridge,” he said.
Murphy said he would get updated costs on a bridge for the borough assembly. In 2003 he priced old railspan bridges at under $100,000, when the project idea was first approved but then vetoed by the mayor. The suggested split at the time was 80 percent city, 20 percent private.
He said the public raised concerns about it benefiting one user, but he said the public uses the crossing now, and his employees pull vehicles out all the time that get stuck.
“Everyone wants to keep vehicles out,” he said.
A Fish and Game representative was due in town this week to look at the crossing area, and committee chair Paul Reichert said he was asked to join the tour. Murphy said he also has been in contact with the U.S. Army Corps of Engineers.
Committee member Tim Cochran asked Murphy to bring back a detailed cost list for the bridge and other materials, and said he supported the project.
“It’s municipal property and something needs to be done,” Cochran said. – JB

Upper Lake trail bids rejected
 The Skagway Borough Assembly on Sept. 16 rejected a pair of bids for the second phase of the Upper Lake Trail restoration project because they were over budget. There also was not enough time to introduce and pass a budget amendment to cover the extra cost and get the project done this fall.
The bids were first discussed by the Parks and Rec. Committee on Sept. 14. The borough had a $25,000 SEATrails grant for the project, but the bids were $61,390 by Henricksen Constructors of Juneau and $75,319 by Packer Expeditions of Skagway.
Committee chair Paul Reichert explained the timing difficulties with getting a budget amendment passed. He noted that the delay in getting the project to bid was not the borough’s fault as staff had been waiting for the go-ahead from an agency in Juneau that was wrong in assuming the work would be close to wetlands. He also said the grant had already been extended once, and likely would not be extended again to allow the project to proceed next summer. He suggested rejecting the bids, even if it means losing the grant, and budget for the project in FY 2012.
Tim Bourcy of Packer Expeditions explained that the high cost was attributed to helicopter time and labor at Davis-Bacon wages on the toughest section of trail. It includes dealing with a granite slab at 20 percent grade over about 200 feet. And it’s on a direct path for spring melt and runoff. He agreed with the suggestion to reject the bids and give up the grant, adding that the project should be “reassessed and rebid.”
Bourcy mentioned that the project could be done “force account” by municipal crews, and that the grant money could possibly be used to transport materials to the site this fall. Reichert said he would explore that option with SEATrails but had reservations since granting agencies like to see completed projects. Gregg Kollasch with municipal public works said it’s possible a borough crew could work on the project next year with a SAGA crew, but added that their workload was pretty full right now.
Reichert, however, was cautious about using SAGA on a project of this scope, saying the level of work often depends on the supervisor of the crew.
“I want to continue on the Upper Lake project, but I want it to be done right,” Reichert said.
At the assembly meeting, Mavis Irene Henricksen represented her son, Tim, of Henricksen Constructors. She said that he would do $25,000 worth of work on the job, but then she asked why they thought $25,000 would do the job when it cost $80,000 for the first phase. She also said SAGA, which uses youth crews, “would not touch a Davis-Bacon project.”
There was a unanimous vote by the assembly to reject the bids, but to send a letter to the bidders and SEATrails explaining their decision.