Eaglecrest gondola on ‘hard pause’ due to cost, can’t be ready by 2028 deadline, Assembly members told
- Mark Sabbatini
- 19 hours ago
- 4 min read
Memo ahead of key April 1 meeting between city and ski area leaders spells out costs, risks of canceling long-planned lift intended to spur year-round operations
By Mark Sabbatini
Juneau Independent
The gondola at Eaglecrest Ski Area is on a "hard pause" due to a far higher projected installation cost than expected and "it is a foregone conclusion that the 2028 deadline cannot be met" for completing the project under a revenue-sharing agreement with Goldbelt Inc., according to a project manager’s memo being presented to Juneau Assembly members.
The March 25 memo focuses primarily on the cost and actions involved in canceling the project, which could total more than $18 million including money already spent. The Juneau Assembly is expected to make a halt-or-proceed decision during the coming weeks, beginning with a Finance Committee meeting at 5:45 p.m. Wednesday with Eaglecrest officials.
"Recognizing that the cost to construct is beyond the capacity of CBJ, the group working on the gondola project has turned its attention to how the project can be brought to a stop with the least amount of expense," Craig Dahl, a special projects manager for the City and Borough of Juneau, states in the memo. "There are various aspects of the project in motion that will continue to incur costs, and those costs will vary depending on decisions made over the next several weeks that are not evident at the time of writing this memo."
Eaglecrest officials have envisioned the used gondola, purchased for $1.9 million from an Austrian ski resort in 2022, as the key to establishing large-scale, year-round tourism that will allow profitability after many years of increasingly money-losing operations at the city-owned ski area.
But a total project cost originally estimated at less than $9 million snowballed to as high as $37 million earlier this month due to a preliminary installation cost of up to $27 million submitted by the contractor selected to do the work.
"It is safe to say that the number was far greater than anticipated," Dahl wrote, adding the gondola is therefore on a "hard pause" at the direction of Juneau’s city manager "to allow time for alternatives to be considered."
Goldbelt invested $10 million in the gondola project in exchange for a share of operating revenues, with the provision the project be completed by May 2028. Because work is on hold and this year’s construction season is nearing, "it is a foregone conclusion that the 2028 deadline cannot be met," Dahl wrote.
The city will have to repay the $10 million plus interest — a total of $12,045,720 if paid on May 1 of this year — if the agreement with Goldbelt is nullified, according to Dahl’s memo.
City leaders said earlier this month they are seeing if the Alaska Native corporation is willing to increase, rather than abandon, its involvement with the ski area by taking over summer and/or winter operations.
"There is ongoing communication between Goldbelt and the Eaglecrest board that will hopefully bring clarity to this issue, but that will not be known until April 1st," Dahl wrote.
Other cost considerations include gondola parts still in Austria that need to be shipped to Juneau. Dahl said tariffs imposed by the Trump administration are expected to add $930,000 to that cost and may also be fuel surcharges due to a sharp rise in oil prices because of the Iran war.
"We understand that the parts are in process for loading but given the ‘hard pause,’ we are discussing with our agent whether the shipment can be delayed or cancelled altogether," Dahl wrote.
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Also pending is the remainder of a $173,200 contract with a Colorado company refurbishing the gondola cars there before the cars will be shipped back, according to the memo. And if the project is cancelled, but Eaglecrest "requests to keep all the gondola parts together as alternative funding and ski area management is considered" it will cost about $100,000 for such arrangements.
All told, Juneau has spent about $9.4 million in "known and anticipated expenses," and the additional walkaway cost may be a similar amount, Dahl wrote. The total cost to abandon the project — if the shipping from Austria is cancelled — is about $12.3 million, including the repayment to Goldbelt. But he noted there is still $3.3 million remaining in total funds provided from all sources for the gondola.
Dahl’s memo recommends the Assembly take one of two actions: "move full force forward with the project (including identifying funding) or to shutter the project in such a way as to retain as much value in acquired assets and design."
If the Assembly opts to halt the gondola, it will also be facing broader questions about what to do with the ski area’s budget and operations during the coming budget year as well as future years, according to CBJ Finance Director Angie Flick. The Assembly has opted to subsidize Eaglecrest for many years, including higher amounts to cover growing deficits recently on the assumption the gondola will eventually pay off.
"If a decision is made to stop or take a long-term pause on the gondola, then one of the assumptions made last year is no longer valid: ‘Eaglecrest will be ‘profitable’ in the near future,’ she wrote in a memo to Assembly members on Thursday, "This will beg the question of what do we do now?
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
