‘Not going to just give up’ on summer tourism plans if gondola is a no-go, Eaglecrest officials say
- Mark Sabbatini
- 6 hours ago
- 5 min read
Expectation is installation will go forward when decision point is reached early next year, but plan B needed if project is too costly since CBJ may limit subsidies to ski resort
By Mark Sabbatini
Juneau Independent
Eaglecrest Ski Area needs to move ahead with an expansion into large-scale summer tourism even if a long-planned gondola is deemed too costly to install because it cannot count on city leaders to continue subsidizing money-losing operations, resort officials said Wednesday.
The hope is to get an estimated installation cost of the used gondola by late February or early March from a contractor still to be selected, said Brandon Cullum, an Eaglecrest board member, while chairing a meeting of its Finance Committee on Christmas Eve.
He said the Juneau Assembly will then make a decision about whether it’s worth proceeding with the project, and the next steps after that were discussed during a meeting with two Assembly members earlier this month.
"We did talk about if the gondola is a no-go we're going to quickly pivot to other ways we can make Eaglecrest sustainable," Cullum said. "Whether it's a new quality lift that attracts people (to) summer operations…So we immediately threw that out there. We're not going to just give up because the gondola is a no-go."
Eaglecrest is facing a major transition as it begins its 50th season of operation, since the city-owned ski area has been losing money for many years and is facing enormous costs to repair or replace aging infrastructure. The gondola purchased from an Austrian ski resort in 2022 is envisioned as the cornerstone for an expansion of summertime activities that would potentially bring hundreds of thousands of cruise ship passengers to the mountain, and thus ensure long-term profitability.
But delays in installation and escalating costs are raising questions about that scenario. Cullum said one message from this month’s meeting with Christine Woll and Neil Steininger — the Assembly’s finance committee chair and Eaglecrest liaison, respectively — is the ski area needs to stop operating at a loss, with or without a gondola.
"It could be that we give them a budget and they make a no-go for the gondola, and then we're faced with no more negative general fund contributions," he said, meaning the Assembly would not provide funds to cover deficits in the ski area’s budget. "So suddenly we moved from a pretty sound path forward, kind of keeping things flat, to a bit of a crisis scenario where we may need to look at further raising (ski area) rates."
"They both emphasized that they're operating under the premise that the gondola is a go, but we also need to be prepared for some alternative scenarios," Cullum added.
Woll, in an interview Friday, said the plan is still to move ahead on the gondola since the city has already invested a significant amount of money in it, "but if the estimates for what it costs to install are far higher than what was originally intended, then the Assembly may choose to change course." If that happens, then the Assembly won’t allow Eaglecrest to have a negative fund balance — essentially meaning its bank account can’t be empty.
"Last year we let Eaglecrest go negative, which you can do if you have a solid business model for refilling those coffers in the future," she said. "And so the plan for refilling those coffers are with gondola revenue. So if the Assembly was to choose not to move forward on the gondola after getting that estimate, then Eaglecrest would no longer be able to go significantly negative."
"It doesn't mean that we won't subsidize Eaglecrest in the future, but they can't run a negative fund balance," Woll added.
Significant reductions citywide by the Assembly are expected in next year’s budget and beyond, due to two tax-cut measures approved by voters in the October municipal election. Eaglecrest was among the city programs often mentioned by Assembly members during the campaign as a possible target for cuts, with officials saying their priorities would be essential services such as public safety and infrastructure.
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 recent estimates. The total cost including installation is expected to be well in excess of $10 million, and there will be significant ongoing operational and maintenance costs. Also, the possibility was raised at an Eaglecrest board meeting earlier this month that the used lift may need to be replaced in 20 years.
Another economic consideration is an operating agreement with Goldbelt Inc., which provided $10 million for operational and other costs in exchange for a share of gross revenue during the next 25 years. The city will have to repay that money with interest if the gondola is abandoned — and may also be forced to if it is not operating by the agreed-upon deadline of May 2028.
The selection of a contractor to install the gondola is taking longer than planned, with the submission of bids ending earlier this month, said Jim Calvin, an Eaglecrest board member involved with the contractor selection process. He said the gondola is "a really complicated project," so both the costs of the project and the timeline for an estimate are uncertain once a contractor is selected.
"They have to inspect some of the equipment to see whether it needs to be rebuilt or replaced," he said. "So the risk is we're pushing farther and farther out into the year before we're going to have an estimate, and that potentially creates all kinds of challenges because construction needs to start as soon as possible in the year. So whether there's a number in March or not remains to be seen."
Eaglecrest officials in the meantime need to be working on budget proposals for the Assembly to consider that include a range of possibilities, Cullum said.
"We've talked a little bit about preparing three scenarios," he said. "A worst-case scenario, status-quo scenario and sort of a premium scenario."
Cullum said the likely scenario envisioned for the year ahead after the meeting with Woll and Steininger is "a blend of status quo and austerity, but also keeping an eye on development."
"My sense was they're not super interested in seeing us lean into more deferred maintenance and things like that this year, unless there are clear safety issues," Cullum said. Also, he said both Assembly members indicated "that if we don't come to them with a rate increase to help absorb any cost growth then it's a non-starter."
"So be ready for probably unpalatable levels of rate increase," he said. "I think that they just want to know that Eaglecrest is going to take steps to bridge the gap that we're asking them to take steps to bridge."
Calvin, echoing other officials at Wednesday’s meeting, said whatever plans are submitted to Assembly members have to continue Eaglecrest’s long-term vision for its future regardless of what happens with the gondola.
"If it's a no-go on the gondola then we need to be thinking very seriously about what other form of summer development can we pursue," he said. "Because I do think that one way or another summer revenue has to be part of our future."
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
