The board of directors of Sitka’s Industrial Park has lent its unanimous support to a proposal to use proceeds from the sale of Sitka Community Hospital to construct a marine haul out.
Directors of the Gary Paxton Industrial Park debated the issue for a half-hour at their monthly meeting on Monday (7-11-22), addressing many questions that are likely to be raised by the public if the question moves to the ballot this fall.
Chad Goeden has been on the board for a month, and has missed most of the years-long effort to fund and build a haulout at the park. Playing devil’s advocate, he asked whether a haulout was the best use of over $8 million in public funds.
“Multiple businesses have looked at this and said, this is not cashflow positive,” said Goeden. “Why are we as a government stepping in to do something that multiple businesses have said won’t work? That to me sounds like a government debacle.”
Goeden believed that many voters would see the question as one of a large amount of public money being devoted to one sector of Sitka’s economy, the commercial fishing industry.
Longer-serving board members pushed back hard on the idea that a haulout was uneconomic, or that it served only the commercial fishing industry. Lauren Mitchell said the recreational fleet was in the same dilemma about where to haul larger boats since the closure of Halibut Point Marine. And she advocated for the indirect benefits to the economy of reviving Sitka’s marine services industry.
Board member Chris Ystad seconded this point.
“The common saying in the industry is, if you don’t make money pulling the boat, you make money once it’s out of the water,” said Ystad. “So whoever is going to be receiving the funds for the haulout, we can vote for breakeven. But the economic benefit once that boat is up on the pad and getting worked on is going to be seen throughout the community, and tons of different businesses.”
Pulling just over $8 million out of Sitka’s permanent fund would not be without consequences. The loss in revenue to the city’s general fund would be about $340,000 a year. However, there was consensus that the net gain in tax revenue from increased business at the haulout would offset that loss – possibly, in a big way.
Municipal administrator John Leach said the possibilities of growth were significant for hauling larger ships, possibly even Coast Guard Fast Response Cutters, which currently are serviced in Homer and in California. The idea was, “if we build it, they will come.”
“If we put the baseline infrastructure there and give the option of a ramp or a travelift, and we build something that can haul the bigger vessels,” said Leach, “we’re waiting for that upland property to be developed by other folks in the marine industry to start pulling that business.”
Ultimately, the Gary Paxton Industrial Park Board voted unanimously to support the proposed ordinance to put a ballot question before voters this fall, to allow the proceeds of the sale of Sitka Community Hospital – just over $8 million – to be used to build a marine haulout. If additional grant funding were to come through, the total for the project would top over $17 million.
The assembly is scheduled to consider the matter on first reading at its regular meeting on July 12.
