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Partnership plans new cruise dock for Ketchikan

The Virginia Maru, owned by Mitsubishi Steamship Company, loads the first export cargo from the Ketchikan pulp mill on July 8, 1963. The former pulp mill will soon be the site of a new cruise dock. Photo courtesy Alaska and Polar Regions Collections, Elmer E. Rasmuson Library, University of Alaska Fairbank, Ernest H. Gruening Papers, 1914-[1959-1969] 1974, UAF-1976-21-57344

In yet another example of the long-term commitment cruise lines are making in Alaska, two investor groups have teamed with Norwegian Cruise Lines to build a two-berth dock in Ketchikan’s Ward Cove, home of the now-closed Ketchikan pulp mill.

The dock will be able to accommodate the largest cruise ships that call on the state, including Norwegian’s Breakaway Plus Class ships, the Norwegian Bliss and Norwegian Joy. In exchange for its investment, Norwegian’s ships will receive preferential docking privileges.

This is the third partnership in recent months between private investor groups and cruise lines to build new docks or expand existing ones. Last year, Survey Point Holdings – comprised of Bob Berto, Ricky Smith and Jon Hemingway – teamed with Carnival Cruise Lines to buy the White Pass & Yukon Route’s rail and port operations in Skagway. The new owners quickly went to work to upgrade the aging facilities, including a “much-needed dolphin mooring at the end of the RR docks” and a floating component at the Ore dock,” according to Berto.

In December, Hoonah Totem Corporation and Norwegian announced plans to build a second dock at Icy Strait Point to handle the new class of megaships. Hoonah Totem Corporation broke ground on the project this spring with an anticipated completion date of 2020. The second dock is in a forested area about a half-mile farther from town than the existing dock. “We have the ability to develop it in a respectful way that allows all of the guests to have this wilderness experience without feeling crowded,” said Icy Strait Point Vice President of Operations Tyler Hickman.

ward-cove-aerial

Drawing shows Ward Cove’s new dock.

For months, Ketchikan has been studying how to pay for a cruise-dock expansion, estimated to cost a whopping $150 million, and to relieve some of the congestion downtown. The city has four downtown cruise berths but can handle just one megaship at a time.

The pulp-mill site is about seven miles from Ketchikan’s historical downtown. The first phase, estimated at $50 million, will be the dock, a passenger terminal and welcome center. Subsequent phases will involve developing the pulp mill’s other buildings.

We want to “be able to show people the history of what the pulp mill meant to the region and, hopefully,  redevelop it as a new economic center that’s focusing on the major growing industry in southern Southeast, which is tourism,” said project spokesperson Trevor Shaw.

“A cruise ship dock at Ward Cove represents the best opportunity to grow the tourism economy of Ketchikan while not overcrowding the downtown area. If we want the entire community of Ketchikan to grow, we need to spread out our visitors,” said Dave Spokely, one of the owners of Power Systems & Supplies of Alaska, the company that bought the former pulp mill site in 2011. Andrew Spokely is the other owner.

Both the City and Borough agreed. “It looks like it offers a lot to the community as far as spreading out the tourism activity and potential for developing infrastructure in that area and then just the economic activity generated by new construction is certainly positive,” said Borough Mayor Dave Landis. “

Powers Systems will lease the area to the Ward Cove Dock Group, which is 50% owned by the Spokelys and 50% by Godspeed Inc., which is owned by Skip, Ryan and James Binkley of Fairbanks. John Binkley, who is president of CLIA Alaska, is vice president but does not have an ownership interest.

In a recent speech to the Resource Development Council of Alaska, John Binkley said the key to sustainable growth is twofold. “We must improve the quality of life in communities we visit and protect the seas we sail.”

The Ward Cove Group hopes to have all permits in hand by fall so the facility can open in 2020.

Kethcikan Pulp Mill closure shocks the community

View of Ketchikan Pulp Co. mill

View of Ketchikan Pulp Co. mill from the water. Date unknown. Photo courtesy U.S. Forest Service Photograph Collection

By Dave Kiffer

Ketchikan – On March 25, 1997, Louisiana Pacific (LP) announced the closure of the Ketchikan Pulp Mill, the primary engine of the Ketchikan economy for more than 40 years. The final bale of pulp – which is now on display at the Southeast Alaska Discovery Center – rolled off the production line that same day.

The announcement was not a complete surprise, given the fact that the financial and political realities of operating a large pulp mill in the Tongass National Forest had changed dramatically in the 1980s and 1990s. Louisiana Pacific itself had estimated that it would take more than $200 million in upgrades to bring the nearly half-century-old facility up to current production and environmental standards.

But, for a community that had hummed year-round for decades on the strength of the timber industry, the closure announcement was a shock to the system.

The closure immediately cost the community 514 year-round jobs and caused a ripple effect that was estimated at least 500 other direct jobs lost. Untold other job losses occurred as retail sales dropped across the spectrum. One of the local shipping companies estimated its revenues dropped 20% in the first month. Ketchikan’s housing market flooded and prices dropped accordingly.

When many of the former millworkers and their families left the community to find jobs elsewhere, the population dipped from a high of nearly 15,000 in the mid 1990s to just about 13,000 in 2003. Local schools were hit harder when the number of school children decreased by 25%.

But even these drops were not as big as had once been predicted. State surveys taken in the late 1980s estimated that Ketchikan would lose more than 35% of its population and half of its school population if the timber industry collapsed. By the time the end came in 1997, the industry had already been retrenching for nearly a decade and, therefore, the blow wasn’t as hard as it could have been.

In announcing the closure, LP also reached an agreement with the federal government over long-standing timber-supply issues. As part of that agreement, the company received $147 million and the right to an additional 300 million board feet of timber for its two remaining sawmills in the region. It was thought at the time that the sawmills could keep the timber industry alive long enough for another long-term timber-harvesting plan to be developed, but by the time that plan – which involved switching from old-growth timber to areas that had already been logged and had grown back – was developed, more than 15 years had passed.

There was also another industry, tourism, that was growing rapidly and would quickly replace timber as the town’s major industry, although many of the tourism jobs would be seasonal rather than year-round, like the pulp mill-related jobs. In a sense, although Ketchikan’s overall economy eventually rebounded, it was now more seasonal, as in the pre-timber past, when mining and fishing were the major industries. In 1996, slightly more than 300,000 cruise visitors came to Ketchikan between April and October. In 2017, that number will top 1 million. This season, it is expected to grow to more than 1.3 million.

Click here for a slide show of the historical Ketchikan pulp mill.

Dave Kiffer is a freelance writer who lives in Ketchikan.

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