A state plan to build a new ferry terminal north of Juneau is hard to justify on its financial merits but could pose long-term benefits, including more flexible regional travel and a boost to the mining industry.
That’s the conclusion of an economic analysis released by the Alaska Department of Transportation in mid-October. It weighs the agency’s plan to shorten the ferry route between Juneau, Haines and Skagway by routing passengers through a new terminal located 40 miles outside the capital city.
For months, local officials and members of a key advisory board have called on the state to provide an economic analysis or feasibility study of how the project might help – or hurt – travelers. At least so far, they’re unimpressed with the resulting document.
“It’s not convincing me,” said Haines Mayor Tom Morphet. “And it’s certainly not, even in their own words, a slam dunk.”
Bob Horchover of the Alaska Marine Highway Oversight Board echoed that point during a meeting last week. He said the analysis, which was first reported by the Juneau Independent, read “like a timeshare brochure.”
“I don’t think it was realistic, and I’m not sure where they got some of their numbers,” he said.
Report calls proposed terminal “a strategic investment”
At issue is the so-called Cascade Point ferry terminal project. The state says it’s been working on the idea for several years. But DOT recently kickstarted the effort by signing a $28 million contract for the first phase of the project.
The site is located on land owned by Goldbelt Inc., a Juneau-based Alaska Native Corporation. News of the initial contract was welcomed by Canadian mining company Grande Portage, which plans to develop an ore terminal at the site – in partnership with Goldbelt.
DOT, for its part, argues the project would reduce operating costs and ease passenger travel by moving the ferry terminal significantly closer to Haines and Skagway, shortening the ferry route.
The new economic analysis assesses those claims plus concerns raised by critics. It was written by a contractor, Ed King, who formerly served as chief economist and economic advisor for the state of Alaska.
On the whole, the report acknowledges that the project’s “extensive capital costs” are “difficult to justify based on savings alone.” Still, it paints a picture of the so-called Cascade Point ferry terminal as a project with more pros than cons – especially in the long term.
“In conclusion, although the Cascade Point Ferry Terminal presents challenges as an independent initiative,” the report reads, “it may prove valuable as a strategic investment that facilitates resource development and improves access to the Capital.”
A skeptical ferry board
That framing drew sharp criticism from members of the Alaska Marine Highway Oversight Board during a meeting last week.
Board Chair Wanetta Ayers said it seems like the analysis aims to “build a case for Cascade Point,” as opposed to evaluating it against alternative options.
“I don’t believe it makes a strong case, certainly from a customer service standpoint, and very marginally from an economic standpoint, that the project is justifiable,” Ayers added in a follow-up interview.
That’s concerning, she said, given that dollars are already being allocated to it — and that there’s a long list of other ferry-related projects in desperate need of funding. The nearly 45-page report explores potential impacts from the terminal, which would shorten the ferry ride between Juneau, Haines and Skagway.
The analysis acknowledges that the terminal would create new infrastructure and maintenance responsibilities for the state. It also finds that “construction costs are unlikely to be recovered in a meaningful timeline without additional changes.”
Another con is that passengers would have to make up for the shorter ferry route by traveling 28 more miles outside Juneau. That would make regional travel more expensive, given extra gas, vehicle wear and tear, and ferry fares that would stay the same.
Goldbelt has committed to running a bus service to transport passengers between Cascade Point and Juneau. But uncertainty remains about the reliability and cost of that shuttle for those traveling without a vehicle – and about what the longer drive would mean for those who do bring a car.
“My guess – and obviously, I’m not an economist – is that for the average user, it’s not a clear cut win, to put it most lightly,” said Morphet, the Haines mayor. “And certainly, to a lot of people, I think would be a loss” of access.
DOT spokesperson Danielle Tessen did not directly address those concerns during an interview Wednesday morning. She said shortening the ferry route ultimately comes down to saving money for the chronically underfunded ferry system.
“That is what we’re focused on, is creating these shortened ferry distances, because that’s how we’re able to continue reducing the cost of operations,” Tessen said.
Cascade Point “not an on-its-own project,” DOT says
The analysis concludes that the new terminal would reduce planet-warming emissions and operating costs. Shorter ferry runs would result in “modest reliability gains” and an estimated 5% bump in ridership, it says.
But the real value comes from other long-term factors.
“Cascade Point, and this terminal, it’s not an on-its-own project,” said Tessen, of DOT. “And what I mean by that is, there is a bigger plan.”
That bigger plan has two main prongs. The first is another DOT effort, known as the Chilkat Connector Feasibility Study, which has also faced fierce opposition in the Upper Lynn Canal.
The agency is assessing what it would take to build a road aimed at easing travel between Skagway, Haines and Juneau. Cascade Point, the analysis notes, would be a “foundational” component of that effort.
The second prong is regional economic development by way of mining. The analysis says the new terminal would serve as a major boon for Grande Portage Resources’ proposed New Amalga Gold Project, which would likely use Cascade Point as its logistical base.
Morphet took issue with that logic.
“It’s kind of based on this trickle-down view of the economy, that if there’s commercial or industrial development at Cascade Point, there’s a greater benefit to the public,” he said.
“But is there a greater benefit to the traveling public?” he added. “That’s what this question is about: transportation.”
Horchover, the operations board member, echoed that point.
“I don’t know exactly what the motivation is, but it sure isn’t for the good of the Alaska Marine Highway service,” he said. “That’s my two cents.”
The board has previously raised concerns that the Cascade Point planning process deviated from the ferry system’s long-range planning process. During last week’s meeting, the board voted to write a so-called “corrective action” letter to the agency and state legislature saying as much.
The state announced on Wednesday that it is soliciting public comment on phase one of the project through Nov. 28.
