Gondola facing extra $700K cost now due to 100% tariffs, questions about replacement cost in 20 years
- Mark Sabbatini
- 8 hours ago
- 6 min read
Eaglecrest officials say ‘big decision date’ about whether to complete project expected by March when full construction and other costs are known
By Mark Sabbatini
Juneau Independent
Eaglecrest Ski Area may be stuck paying a 100% tariff to get key parts for a used gondola shipped from overseas, at a cost of up to $700,000, and officials should be planning now for funding a replacement lift in 20 years, the resort’s board of directors was told at a meeting Thursday.
Those short- and long-term issues add to the complex scenario for the gondola, which supporters say will allow the city-owned ski area to reverse many years of money-losing operations by expanding into mass year-round tourism. Some local leaders are expressing concerns about whether the upfront and ongoing costs of the nearly 20-year-old lift will be too high to make it worthwhile.
"Knowing what I know about Eaglecrest I think some of the funding realities are looking pretty bad there to me for the gondola, in light of everything financially and just in general," Assembly Member Alicia Hughes-Skandis said during an annual budget-planning retreat for city leaders last Saturday. "I think we're at a point where I really don't want us to go down a sunk-cost fallacy. I want us as a body to compare that to the walkaway number."
Mayor Beth Weldon also said during the retreat that "in all transparency, I’ve been hearing some of those numbers too and they’re scary."
The total purchase and installation of the gondola is likely to be well in excess of $10 million, and there will be significant ongoing operational and maintenance costs, according to city officials.
An economic analysis presented in January of 2025 to the board indicated the gondola could generate $58 million to $109 million in total income during its first 15 years of operations, depending on ticket prices and if year-round visitor numbers met projections — a peak rider estimate of 125,000 to 150,000. However, Goldbelt Inc. will receive 10% to 25% of the gondola’s gross revenue for at least 25 years under a joint operating agreement with the city, which includes providing $10 million to help cover upfront costs.
The actual cost of completing installation of the gondola likely won’t be known until early next year, Craig Dahl, a special projects manager for the city, told Eaglecrest’s board. He said there’s "a lot of internal estimates" about the price tag, but ultimately he believes it will be worthwhile to proceed.
"It's still a good project," he said. "Things can certainly change that, but at this point I'm excited about it and I think the team is excited. But there's a lot of things to be done."
The City and Borough of Juneau’s bidding process for a general contractor to install the gondola is scheduled to end Friday. The company selected will then need to assess all parts to determine which need repairs, Dahl said. After that, the company will provide an estimated construction cost.
Meanwhile, the city also hopes to get a sense of the ongoing operating and maintenance costs, said Jim Calvin, an Eaglecrest board member involved in the analysis.
"One of the big unknowns is the cost to maintain this 1998 vintage piece of equipment," he said. "It will require aggressive, ongoing, consistent maintenance, and we want to have an understanding of what that will cost."
Other considerations are how much the gondola will earn, how much of that will go to Goldbelt Inc. under an operating agreement with that company, and "when the time comes, 20 years from now, what it will take to replace the gondola," Calvin said.
"It will have a finite life," he said. "And we want to understand — if we want to have a reserve account, or a fund of money that we would squirrel away each operating year, to get us to a point where there were sufficient funds to replace the gondola — what would that look like?"
"That is all part of our effort to be fully prepared for the big decision date, which is likely to come here in February or March, when the general contractor will have made their first estimates of the construction cost," Calvin added. "At that time, we want to have a pretty clear picture of what the operating finances will look like so that we can factor into the big decision."
"I don’t see any reason why we wouldn’t be proceeding," he added later during the meeting.
Taking a hit from tariffs
The cost of the gondola itself, set at $1.9 million when the Assembly agreed to the purchase in 2022, may now be close to $6 million, according to figures provided by Dahl. That’s due in large part to additional towers and other parts that roughly doubled the original price, which have been in storage overseas for the past two years at an additional cost.
The plan is to ship those parts to Juneau early next year, but since virtually everything consists of steel, a 100% tariff imposed by President Donald Trump is likely to apply to the shipment, Dahl said.
"We're probably going to be spending somewhere between $600,000 to $700,000 if we're not able to eliminate the tariff," Dahl said.
He said Eaglecrest will appeal the tariff on the grounds that the parts can’t be obtained domestically and "they have no influence or no impact on the defense industry, which is one of the bases of Trump’s administration putting these into place."
Dahl said he also plans to contact both of Alaska’s U.S. senators, but "I don't expect them to have any influence over the tariffs."
In November, Dahl said he hoped the shipment would be classified as "ski area parts" and thus be subject to a 15% tariff, but he said the Trump administration is taking a hard-line stance on enforcing the higher steel tariff.
Gondola cars to get out-of-state refurbishment in 2026
Another step toward preparing the gondola for operations is sending the passenger cars to a Colorado company for refurbishment, Dahl told the board. The contract for that work is $414,000, and a separate shipping contract for more than $50,000 has been signed with another company, with the cars scheduled to be sent in early 2026 and returned in early 2027.
"The whole purpose of this is so when the cars return they will be in like-new condition," he said. "We're talking powder coating all the moving parts, replacing any parts that need repair or replacement, new glass, new paint, new floors, new seats. So when the paying customers come to Eaglecrest to get on the gondola they will see that they're being well taken care of with those."
Making a final decision
During Eaglecrest’s last board meeting in November, members were told at least another $3 million in additional funds are needed to complete the gondola, but that is a better option than the more than $10 million it would cost to abandon the project.
Time is another key factor in the decision process, since the agreement with Goldbelt states the company can abandon the deal and get its money back if the gondola isn’t open by May of 2028. Eaglecrest leaders have said a series of delays has put the ski area in a situation where there is little margin for further setbacks.
Goldbelt has already agreed once to extend the deadline date by a year and further modifications to the agreement are possible since Dahl said Thursday that specifics of how the urban Alaska Native corporation will operate tours in conjunction with Eaglecrest are still being discussed.
Another consideration will be the rest of the facilities and infrastructure at Eaglecrest, which is scheduled to begin its 50th season on Saturday. Lifts, snowmaking equipment, buildings, and other portions of the ski resort need upgrades and maintenance, which in some cases have been neglected for years. The economic report presented in January lists $19 million in potential projects during the first 15 years of the gondola’s operations.
Assembly members have stated in recent years they are willing to continue subsidizing Eaglecrest on the assumption the gondola will make the resort profitable on a year-round basis. But city leaders are now facing a lean financial future due to two tax-cut measures voters passed in the October election, with Eaglecrest specifically cited by some Assembly members as something that might see cuts in order to ensure higher-priority needs such as public safety are funded.
The "big decision" date referenced by Calvin will occur about a month before the Assembly is scheduled to begin in-depth work on its annual budget for the coming fiscal year that starts July 1.
Dahl told board members one action that will occur in the short term is updating now-outdated information about the gondola at Eaglecrest’s website.
"We're going to pull all the outdated and incorrect information on the website regarding the gondola project, and we'll be bringing it up to date so that people can see what’s the status of it as we get it there," he said. "It's a big project, it's an important project and the public has a right to know what we're doing."
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
