As Sitka anticipates another record cruise season next year, its two-decade old fee structure for commercial operators is due for an overhaul. The Sitka Assembly on Tuesday (11-22-22) reviewed a proposal that would do away with the old flat-fees for vendors selling tours at Harrigan Centennial Hall, and instead award permits to high bidders. The payoff for the city could run into the thousands.
Every summer, tour operators and businesses set up shop outside Sitka’s Harrigan Centennial Hall. It’s the main downtown pick-up and drop off point for cruise passengers shuttled from Sitka’s private cruise terminal out Halibut Point Road.
But the fees for securing one of a limited number of spots in front of the city building haven’t changed in two decades, and with Sitka’s cruise passenger count expected to hit another record high next year, the spaces are increasingly valuable.
In 2022 the spaces were first-come, first-serve and cost vendors between $400 and $500. Under the new code, commercial vehicles dropping off and picking up passengers would be required to purchase a permit for the year. And businesses who want a space at the hall must bid for one.
In August, Harrigan Centennial Hall building manager Tony Rosas and consultant Lenise Henderson presented their new permitting plan to the assembly. Since then, Henderson said they’d made a few changes, like decreasing the minimum bid for vendors to $2500, which was a conservative estimate they based on one day’s gross sales for an average vendor. But they kept the minimum bid for outfitters at $5000.
“You’re not only getting your space in the back, for your sales and that type of thing. But you’re getting storage space, these folks get to store their equipment there and not move it all summer,” Henderson said of the outfitter spaces. “Which is a really great value in my mind, that’s a that’s an excellent thing for a business to have that is so close proximity to where their customers are.”
But Sitka Chamber of Commerce Director Rachel Roy worried that the minimum bid requirements might be too high.
“I think all of us are feeling that, you know, the cost of doing business, the cost of everything is higher,” Roy said. “Consider that, and maybe even to consider something of a phased approach into increasing the rates.”
Assembly member Thor Christianson agreed that slowly increasing the bids over the next three years made sense.
“I think that something like that makes sense, graduating it up,” said assembly member Thor Christianson of increasing the minimum bid rate, suggesting scaling it up over a three-year period. “So it’s not a real surprise,” he added. “I don’t think it’s gonna be surprised at this point, but so it’s not such a hit to them. And again, that’s just the minimum bid. It may wind up coming in significantly higher anyway.”
“I don’t believe that these values are astronomical, at the time being, for what you actually get,” Mayor Steven Eisenbiesz said of the minimum bids suggested in Rosas and Henderson’s plan.
“While your individual space out front might be small, you essentially get this entire building on that’s open to the public as your your area to conduct business,” he added, and said when considering cost, it was important to consider what was being offered beyond a 10×10 space, like a public bathroom, facilitators, and a waiting area.
The permits are only valid for one year, but some assembly members wondered why they didn’t consider a multi-year permit. Municipal Administrator John Leach said one reason was to remove a barrier to entry for new businesses.
“If we put them all out for two or three years, and then they’re all purchased in that first year, it’s three more years before anybody else can get a chance,” Leach said. “So our hope is in this first year, we see what the appetite is and then maybe revisit this ordinance a year or two later to see if we want to change it to multi-year or consider a phased approach to it.”
Commercial vehicle permits will cost a flat rate, anywhere from $250 to $1000 based on the size of the vehicle. Several assembly members also had concerns about the vehicle drop off area and how to enforce rules around idling bus engines. Christianson wondered if they should add a higher fee rate for vehicles with 60 or more passengers, and Tim Pike suggested further incentives for electric vehicles. In the plan as written, they’ll be getting a 50% discount on the permits. Mayor Eisenbeisz suggested that they pass the code changes as written, and bring back some of the ideas to make changes in the future.
After a motion to change the fee structure for commercial vendors failed, the code passed unanimously as written. It will come before the assembly again at its next regular meeting on December 13.
