The City of Ketchikan is moving forward with a Request for Proposals, seeking a private-public partnership in future management of the downtown cruise dock. But, the city is keeping its options open.
Instead of choosing a concession-style RFP versus a preferential berthing RFP, the Ketchikan City Council decided Wednesday to leave that open to bidders.
In a concession agreement, the private partner would finance improvements to the port, and pay the city for a contract to operate it. The partner would make money by charging fees to the cruise lines and vendors.
In a preferential-berthing agreement, a cruise line would pay a fee for guaranteed docking space at one of the berths. The city likely would have to forward-fund any dock improvements.
Luis Ajamil of consulting firm Bermello, Ajamil and Partners walked the council through a proposed scope for an RFP. He said that the city will be seeking bids that meet the ongoing needs of the facility, provide and support local jobs and businesses, minimize impact to the community through planning and creative solutions, and provide funding for community projects.
He said maintaining public access to the port is a key element. The RFP would call for berth expansion as needed, improvements to the port itself, and $35 million for uplands development and community projects. Ajamil went through the selection criteria for both kinds of bids.
“For a concession, selection criteria are: How much are you going to pay the city? The totality – obviously we’ll do a calculation of the present value and all that – and then how strong is that financial package. Are these people that can deliver the package?” he said.
The bidders also need to show a commitment to work with the city and any environmental goals the city sets, and demonstrate experience.
For a preferential bid, Ajamil said selection criteria include which berth a cruise line is interested in, how much they’re willing to pay, the number of passengers they will bring and any contingencies.
“Preferential are known to have a lot of contingencies on them,” he said. “They do have to be negotiated carefully, because they do have a significant number of contingencies.”
The council heard public comment after Ajamil’s presentation. Heather Muench said she and many other residents don’t want more tourists in town, so any expansion should be off the table. She added that the city shouldn’t give up control of the port.
“Don’t give the tourist industry the key to one of our most valuable assets this community has. And that is those docks out front,” she said.
Jeanette Sweetman expressed concern about the environmental impact of the cruise industry on Alaska and globally. She pointed to instances of illegally released wastewater and other waste, as well as emissions from the ships’ engines.
Sweetman cited a study that showed higher rates of respiratory problems in port towns.
“As someone who grew up here with not only asthma but eczema and allergies as well, surrounded by an unusual number of peers who have asthma, I find it completely neglectful to ignore this evidence,” she said.
Council Member Janalee Gage said she supports moving forward with an RFP, and at this point she prefers a concession agreement.
“We can create a 20-year lease or whatever, where the company takes on the responsibility of the upkeep and maintenance, and construction of additions with our approval,” she said. “And when they decide they want to walk away, it’s still ours. That, I think, is the best deal for this community.”
She said that would provide funding to pay for local projects, and any agreement could include environmental stipulations.
Gage notes that the money now collected from cruise ships can’t legally be used for any project not directly connected with the port; a concession agreement would provide funds to pay for anything the city chooses.
Council Member Mark Flora also spoke in favor of a concession agreement, but with little or no increase in the volume of tourists. Other council members say they want to see what kind of offers the city receives before making a choice.
Ajamil noted that proposals that don’t quite fit the RFP should be considered, as well. He said they could offer a unique concept that the council hadn’t considered.
A draft RFP will come back to the Ketchikan City Council for review and formal approval.