The Ketchikan City Council met at the Ted Ferry Civic Center Thursday evening to hear a financial and qualitative analysis of the two proposals for the management and redevelopment of the Port of Ketchikan, as well as the option of the city retaining management of the port, and set a date for its next meeting on the topic.
Ten community members stepped up to the podium at the beginning of the meeting to speak about the decisions regarding Port of Ketchikan management. Colin Murphy, the Regional Coordinator for Global Port Solutions and representative of Ketchikan Port Solutions, one of the respondents to a request for proposals regarding the port also spoke in support of his company.
The second company that submitted a proposal was the local company Survey Point Holdings.
Locals Martin Pihl, Chris Parks, Norman Arriola, Charlie Freeman, Jaimie Palmer, Mike Holman and Jai Mahtani all spoke against the hiring of a port management company.
Their reasons ranged from concerns about loss of control of the port, to loss of passenger tax revenue, to loss of messaging power with the cruise industry to the loss of transparency in the management decisions.
Locals Mary Stephenson and Spencer Strassburg spoke in support of exploring the idea of signing a contract with one of the two proposers.
Their reasoning ranged from wanting to have experienced managers to negotiate with cruise lines, to get revenue to make upland improvements, to tap into the expertise offered by the companies’ staff in the cruise industry, and to share the risks involved with managing a cruise port in a time of great financial strain.
Murphy emphasized the benefit of risk transfer to a private company if the city contracted for port management.
After public comment, City of Ketchikan Manager Karl Amylon gave a presentation from the city staff perspective on the possible hiring of a company to manage and redevelop Ketchikan’s port.
He began with a sobering overview of the city’s present and future economic picture reflected in the COVID-19 pandemic crisis.
He cited projections of when and how cruises might resume, and warned that the Centers for Disease Control and Prevention could extend its ban on cruise ship operations into 2021.
He also described the potential economic problems that could result from cruise companies operating with their passengers only allowed to visit communities utilizing a safe “bubble” approach. In that scenario, passengers could sign up only for excursions approved by the cruise line and would be bused directly from the ship to the excursion destination and then straight back to the ship.
Shopping, dining and exploring the city would be completely eliminated in that approach to cruising, further devastating the economy in cruise destination cities. Ships that are filled at only partial capacity also would slash income opportunities for local businesses.
“This is how cruise is going to operate in 2021,” Amylon said. “We’re going to again see a very significant financial impact to the local economy.”
Amylon also emphasized that when the Response for Proposals was announced in October 2019, it was created without any consideration to a potential economic disaster such as the COVID-19 pandemic, and the companies’ responses were not written with such an event in mind, either.
Amylon also explained that there was an adjustment to the analysis of the proposals submitted by the two proponents for yet a different reason. The analysis was completed by the financial company Piper Sandler & Co., and along with the proposals by KPS and SPH, is posted on the City of Ketchikan website, at https://www.ktn-ak.us/.
City of Ketchikan Finance Director Bob Newell explained that there were miscalculations in the city bond payments and lease payments that the proponents would be assuming if they were contracted to manage the port.
Amylon then showed sets of slides offering a list of the pros and cons with the SPH and KPS proposals as well as the outlook if the city opted for the “status quo” approach and continued to operate the port as it has historically.
He then reminded listeners that they should consider, as they studied the lists of pros and cons of each proposing company, that either company, if selected to contract with the city, would be subject to a thorough negotiation process to ensure that the city would receive the best final deal.
Amylon also warned that if the city simply continued to manage the port as always has been done, that all would not be a smooth road to success.
“What we are today, if we retain management of the port, management of the port, operation of the port — we’re not going to be able to do that the same way we’ve done in the past up to 2019,” Amylon warned.
After Amylon’s presentation concluded, council members discussed the next step in the process to decide whether to contract with one of the proposers or to continue with the status quo option.
Council Member Mark Flora said that more public input was needed after Amylon’s presentation was made.
Recently elected Council Member Riley Gass urged expediency in selecting a date by which a decision would be made, and Council Member Sam Bergeron, attending the meeting telephonically, said he was ready to make a decision immediately.
Council Member Janalee Gage said it would be “egregious” to make a decision so soon after new council members Gass and Abby Bradberry had joined the council. Those members were sworn in on Monday, along with re-elected Council Member Flora.
The council agreed to meet in a workshop session at 6 p.m. Oct. 21 at the Ted Ferry Civic Center to further discuss the port management issue.