Wrangell shipyard project estimated at $605M to $726M

A 258-foot-high assembly hall would dominate the footprint of a possible shipyard at the former 6-Mile Mill site in Wrangell, as envisioned in this conceptual drawing prepared for borough officials to use in their sales pitch for state and federal funding. (Artwork courtesy Pearlson and Pearlson and the City and Borough of Wrangell)

By Larry Persily

Wrangell Sentinel

The consultant that put together a feasibility study for a major shipbuilding and repair operation at the former 6-Mile Mill site released its cost estimates last week for a full build-out of the shipyard at $605 million to $726 million.

Design, permitting and construction could take at  least five years, dependent on assembling enough funding to pay for the ambitious project that could, at full development, create several hundred jobs with the shipyard operating at capacity.

The borough is promoting the project, which would be privately owned and operated on land leased from the municipality.

“Obviously, $605 million on the low end is a staggering figure,” Borough Manager Mason Villarma said at a public presentation of the plans Tuesday, July 14, at the Nolan Center.

Borough officials have been meeting with Alaska’s congressional delegation and federal officials, pitching the development as part of the Trump administration’s push to rebuild the nation’s shipbuilding industry, particularly for military vessels and Arctic patrols.

The pathway to pay for construction, Villarma said, could include private investment, state and federal money, maybe even foreign investors such as Japan, South Korea and other U.S. allies willing to help strengthen Arctic security.

“It’s going to be a piecemeal approach,” he said of assembling the public and private money for the project.

The borough expects to hear later this summer on its request for a federal grant to cover most of the cost of putting in roads, water, sewage lines and power at the 6-Mile property. That work, which could cost close to $40 million in federal and borough funds, would prepare the site “shovel ready” for development, the manager said.

Depending on funding, the shipyard could be built “in digestible chunks,” Villarma said, holding down initial costs.

The borough purchased the 42-acre property in 2022, looking to develop it for industrial tenants to boost the town’s economy.

Villarma noted that Wrangell has never recovered from the population and economic loss after its two sawmills closed 20 and 30 years ago. The schools had more than 500 students for more than a dozen years until the number started falling in 2000, to about 260 this past year.

“This is the No. 1 opportunity to create jobs,” Villarma said at the start of last week’s community update, which drew a crowd of about 50 people to the Nolan Center.

Borough officials have been talking since last year with JAG Marine Group, which runs shipyards in Ketchikan and Seward, about the company building an even bigger operation in Wrangell to go after shipbuilding and repairs on federal government ships.

The borough teamed up on the feasibility study with JAG, which also runs marine service operations in Michigan and Virginia. Wrangell agreed in February to pay $550,000, with JAG’s share at $200,000, for the contract with Miami-based Pearlson & Pearlson to prepare the analysis and conceptual design for the yard.

The shipyard’s target customer would be the U.S. government, including the U.S. Navy, Coast Guard and research vessels, particularly ships that operate in Pacific and Arctic waters.

JAG works on military assets nationwide, said Charles Minton, the company’s senior vice president.

Pearlson designed the plans primarily for ship repairs and maintenance, but the facility also could build ships from the keel up, said Luke Pitts, a program manager with the company that advises on shipyard design worldwide.

As proposed, the facility’s shiplift — 60 hoists working in unison — would be capable of lifting up to almost 38,000 tons out of the water and setting the vessel on a roller assembly for delivery into the assembly hall or an outdoor work area.

The concrete in the work area would be four feet thick to handle the weight of ships, Pitts said.

The assembly hall would be 560 long and 258 feet high, covering a footprint measured at 186,000 square feet, according to the Pearlson report. The site would include a smaller building for sandblasting and painting.

About 70% of the total project cost would go toward construction, with about 30% for equipment.

As presented by Pearlson, there would be a separate pier at the south end of the site for ships to tie up, and a spot for upland development, such as Coast Guard facilities.

“We would prefer to be a (Coast Guard) homeport,” Villarma said in an interview earlier this month. But any role as a service or repair station could provide enough work to make the development economically viable and boost the town’s economy, he said.

According to the preliminary design, the shipyard would occupy 24 acres of the former mill property. The shiplift and piers would extend the footprint into the water. 

Other tenants at the site would include Alaska Marine Lines, which plans to put in a barge ramp and freight yard to replace its downtown operation, and Channel Construction, which runs a scrap metal operation at the southern end of the property.

The borough would install backup diesel generators at the site, near the highway, to ensure dependable power to the industrial customers during any outages without pulling from the rest of the community.

Providing sufficient power to run the large-scale industrial user would not be a problem, Robert Siedman, chief executive officer of the Southeast Alaska Power Agency, said at the community meeting. The agency owns and operates the Tyee Lake hydro power station to serve Wrangell and Petersburg.

Tyee spills a lot of water it does not need to generate power, Siedman said, calling it “wasted energy.” With installation of a third generating turbine at the hydro station next year, the agency will be well positioned to meet the power needs of a large-scale shipyard, he said.

In addition to meeting the power demand, Villarma said the municipal water and sewage treatment systems could handle the heavier load too.

Dredging would not be required for the start of operations.

The work by Pearlson is an early-stage design, with full design estimated by January 2028, with the timeline dependent on funding, according to the company’s presentation. Full design is estimated at $17.8 million to $21.3 million.

Obtaining the more than 15 permits required for the onshore and offshore work could stretch from spring 2027 to late summer 2028, also dependent on funding for the project.

The shiplift design for Wrangell would be different from the drydocks used at JAG’s Ketchikan yard. With a ship in drydock, the facility cannot be used for anything else. With a shiplift, vessels can be moved into the assembly hall or outdoor work area, providing the ability to work on several ships at the same time, Pitts explained, calling it “the most flexible of any solution.”

The Ketchikan yard, which is owned by the state and leased to JAG, is smaller than the proposal for Wrangell. Ketchikan’s largest drydock is limited to ships about one-third the weight and 100 feet shorter than the facility designed for Wrangell.

• This article was originally published by the Wrangell Sentinel.