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Bids for private management of cruise dock in Haines don’t guarantee city more money
By Will Steinfeld
Chilkat Valley News
The Haines Borough Assembly will begin considering two proposals for private management of Haines’ Port Chilkoot cruise ship dock.
One is from port management company Global Ports Holding. The other is from a partnership of two regional companies, Huna Totem Corporation and Survey Point Holdings, calling themselves Port Chilkoot Development Corporation, or PCDC.
Both would aim to increase total passenger visitation, but neither offer guarantees the borough more money than it’s already bringing in.
The offers aren’t final, either, as the borough has reserved the right to negotiate adjusted terms after receiving proposals.
Both bidders offer the same broad concept: to pay the borough in exchange for the right to manage the dock and collect revenue from its users.
Each proposes to compensate the borough in two primary forms: cash payments and funding for capital improvements to the dock.
The amounts are significant, with millions of dollars projected to go to the borough over the coming decades. In exchange, the borough would have to cede its existing dock revenue to private dock managers, which itself could bring in tens of millions of dollars in the coming decades.
The borough collects annual revenue from the Port Chilkoot Dock through fees charged to cruise lines. The main fee is charged per passenger on each ship that comes to port. Additional fees are charged for docking, tendering and services such as water and port security. For the current fiscal year, borough staff projected $818,000 in revenue from those fees.
Neither offer guarantees the borough would bring in more than that.
PCDC offers per-passenger payment
The Huna Totem, Survey Point PCDC collaboration proposes to pay the borough $9 per passenger, guaranteeing a minimum of $250,000 a year, for the duration of a 35-year lease.
The $9 rate offered by the company is lower than the rate the borough would otherwise be collecting on its own.
The borough has charged $9 per passenger to cruise ships for the past two years, but is scheduled to raise that fee to $12 per passenger next year and to $13 per passenger in 2029.
Under the terms of the agreement, the borough would also lose revenue collected from docking and tendering fees.
On the other hand, the borough would gain company money for capital improvements plus company money for maintenance.
Taking in less per passenger appears to be a loss. But total revenue could increase if the company is able to boost total passenger visitation, which some borough staff say could be hard for the borough to do on its own.
To match this year’s projected borough revenue from the dock, PCDC would have to bring in nearly 91,000 passengers. In the company’s “expected growth” scenario, it would pass that mark in the fourth year of the lease.
GPH offers lump sums
Global Ports offers two structures: an upfront payment plus a smaller fixed annual rent, or a larger fixed annual rent with no upfront payment.
For a 20-year lease, the company is offering either $2.6 million upfront and annual rent of $100,000, or no upfront payment and annual rent of $425,000.
It also offers a similarly structured but far less lucrative 15-year lease option.
Under either option, the rent would increase with inflation. PCDC’s payments, on the other hand, would not be adjusted for inflation.
Both companies also propose to spend on capital improvements, including a floating dock structure. Global Ports estimates its floating dock at $5.33 million. PCDC estimates its floating dock plan at $8 million to $12.5 million.
There’s another difference on capital improvements: Global Ports is asking the borough to spend $2.85 million of its own funds on a covered passenger shelter, decking and bullrail replacement, and fender-panel refurbishment. Under the PCDC plan, the company, not the public, would fund upland work such as covered staging areas, which PCDC values at $500,000 to $1 million.
Finally, Global Ports offers $100,000 to Haines High School, $100,000 to the Chilkat Valley Community Foundation and $100,000 to the borough for each year passenger counts reach a set high-water mark, though according to its own projections, that bonus is unlikely.
Total sums hard to project
Total revenue is easiest to project for Global Ports’ offer, given that it is not contingent on passenger volume.
Its most lucrative offer in total cash would pay a set $425,000 per year over 20 years. Adding capital improvement money onto that would bring the total 20 year payment to $13.33 million. That’s likely not an exact tabulation: the company also asks the borough to spend $2.85 million in public funds on capital improvements as part of the deal. But the company also says it would increase payments with inflation, likely bumping up the final number.
Still, the payment does not appear to compare favorably to the borough status quo.
The borough’s revenue from the dock has far exceeded Global Ports’ proposed $425,000 per year payment, nearly doubling it, in the two years since the borough instituted its per-passenger fee. And that doesn’t factor in the planned per-passenger rate increases over the next three years.
It’s difficult to weigh the total 20 year Global Ports sum against what the borough might take in on its own over the same period. That’s because borough revenue is dependent on passenger traffic to the dock, and how much the borough is able to secure in outside funding for capital improvements, among other factors.
But as a rough calculation, the current system of public dock management, with 2025 passenger counts and other fees held steady over 20 years, could bring in over $21 million in revenue.
That’s far more than the roughly $13.83 million Global Ports appears to offer.
PCDC revenue may compare more favorably to the borough status quo revenue than Global Ports, but the company’s projections are also far less certain than Global Ports’ fixed rates.
Over the 35 years of its proposed lease, if PCDC’s expected passenger projection comes to pass, the company would pay the borough roughly $34.8 million in per-passenger fees.
Its low projection for passenger visitation would result in about $24.2 million paid to the borough, and its high projection $40.8 million.
The company’s top estimate for capital improvements would add $13.5 million in funding.
If the borough’s 2025 rates and passenger count hold steady over 35 years, and its planned $12 and $13 rate increases are accounted for, it could take in roughly $38 million in total dock fees.
None of the company’s payments, beyond a $250,000 annual minimum, are guaranteed. Under PCDC’s system, payment to the borough is contingent on passenger count, which the company says it will increase but makes no binding guarantee of doing. Global Ports’ annual payments are fixed regardless of passenger count.
Even if payments from private dock managers end up being less than current revenue, however, there still could be other benefits. For instance, current dock revenues go into the Port Chilkoot Dock Enterprise Fund and can only be spent on Port Chilkoot Dock improvements. That principle has been enforced in recent years by cruise industry lawsuits against municipalities in the region.
Dock managers have said in the past that rent paid to the borough, separate from the fees collected from cruise ships, could be spent on any borough service, not just the dock.
Passenger count
If anything, passenger count, not payments, has been the most discussed aspect of dock management in Haines in recent months.
To many, a passenger increase is the primary benefit of a deal, boosting local retail and tour businesses. To many, it’s also the primary drawback, causing congestion and potentially changing the town’s “character,” as some have put it.
The two bidders have significantly different passenger growth projections, with Global Ports aiming for a larger increase in a shorter amount of time.
Their projection methodologies are also slightly different. PCDC projects a lower starting point for passenger count, factoring in the migration of American Cruise Lines boats to the Chilkoot Indian Association dock.
Haines saw 67,833 cruise passengers in 2025, and roughly 72,000 were scheduled for 2026.
Global Ports projects between 96,500 and 274,500 passengers a year by 2046, the end of its proposed 20-year lease.
Global Ports also offers a binding cap, which PCDC does not. The company would commit to staying below a set annual passenger limit, rising in five-year steps from 175,000 passengers to 275,000 passengers over the 20-year agreement.
PCDC, on the other hand, would stay closer to the status quo.
Its baseline growth would come largely from its partnership with Viking, which the company says would increase its port calls in Haines from 16 in 2028 to 35 by 2032 and hold that level for the rest of the lease. Viking’s mid-size ships made nine port calls in Haines this summer. Combined with modest growth from other cruise lines, PCDC’s low scenario would take passenger counts from 48,600 in 2028 to 84,400 by 2057.
On top of that, PCDC pitches potential deals to double Seabourn Cruise Line’s port calls and to bring in a ship of up to 2,000 passengers that would make a “long-term commitment to Haines.”
Those scenarios could take the 2057 passenger count to 120,500 passengers, the company’s “expected growth” scenario, or as high as 143,400 passengers in a “high growth” scenario.
PCDC calls the high scenario “attainable,” but says it would “likely outpace infrastructure and tour development and [would] not be supported by the community.”
“Our team has longstanding relationships with every cruise line operating in Alaska,” PCDC writes in its proposal. “We can leverage these relationships to find the right sized vessel for achieving moderate growth that will still allow Haines to retain its small town, independent charm.”
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
