Business/Economy

A dock project in Seward will bring even bigger cruise ships to Southcentral Alaska

The Alaska Railroad plans to spend $80 million to replace and expand the old cruise ship dock in Seward, setting the stage to bring larger cruise ships and more tourists to Southcentral Alaska. A $25 million freight dock expansion is also in the works.

The new dock will extend close to a quarter of a mile into Resurrection Bay, about 500 feet longer than the existing dock that must be replaced because of its age, railroad officials said.

The longer dock will enable cruise companies to bring in ships that can haul around 4,500 passengers, more than the roughly 2,500-passenger ships that now reach Seward, said Bill O’Leary, Alaska Railroad president.

Those big ships currently visit Southeast Alaska, but they don’t cross the Gulf of Alaska to visit Southcentral Alaska, he said.

O’Leary said the bigger ships will mean more visitors not just for Seward, but for destinations such as Anchorage or Fairbanks, he said.

“It’s a critical project for not only the cruise industry, but also the entire visitor industry in Alaska,” O’Leary said.

Business and political leaders in Seward said they support the plans. But the prospect of a bigger footprint for the cruise industry has some residents in the bayside town of 2,800 closely watching developments.

[Earlier coverage: Tourists and cruise ships are ready to return to Seward. But is Seward ready for them?]

The project will be mostly complete in two summers, and finalized in 2025, railroad officials say.

The cruise ship dock upgrade is part of a bigger effort to upgrade the railroad’s infrastructure in the community. An expansion of the freight dock is up next, to be finished in 2027.

The docks are vital transportation links for the state, O’Leary said. He said the improvements will also support industries such as construction that send materials to Seward for distribution across Alaska.

“It’s a significant amount of money for a town of that size and for a railroad of our size,” O’ Leary said.

The heart of the plan is the replacement of the passenger dock. It was originally a freight dock, built in 1966 as the railroad upgraded its facilities following the Great Alaskan earthquake two years earlier.

The dock is still safe, but its pilings are corroding, said Clark Hopp, the railroad’s chief operating officer. It has passed the standard design lifetime for a marine project.

“It has served us well,” Hopp said. “But as we like to say at the railroad, it’s in hospice care. It’s going to die.”

The railroad is working on an agreement with Royal Caribbean for that cruise company to serve as the new dock’s long-term anchor tenant, O’Leary said.

Wendy Lindskoog, a Royal Caribbean vice president for West Coast operations, said the agreement, still under negotiation, could cover two or three decades.

The dock expansion will support Royal Caribbean’s plans to bring its new Quantum-class ships to Seward, she said. The ships are larger and more energy-efficient than earlier ships, she said. Two of the ships visiting Southeast this year are the Quantum of the Seas, with capacity for 4,900 guests and Ovation of the Seas, with capacity for 4,200 guests.

Alaska and Seward are popular with guests, she said.

“Our company has a great interest in growing in Alaska,” she said. “Our guests love the destination.”

In 2019, about 230,000 people disembarked in Seward. They were part of the 1.3 million cruise guests to visit the state that year.

Industry officials have said that statewide record could be broken this year, after large cruise companies faced two years of zero-to-limited calls in Alaska during the COVID-19 pandemic.

[Tourists are returning to Alaska this summer. Will there be enough workers to manage them?]

As part of the passenger dock expansion, the railroad is also planning a new terminal building, where cruise guests gather as they prepare for their land journey in Alaska.

If needed, the railroad will look at increasing its capacity to transport more guests from Seward to Anchorage and elsewhere, O’Leary said.

The Alaska Legislature advanced the cruise dock project this session, approving a bill for a $60 million bond.

The railroad will cover the rest of the cost with cash, railroad officials say. The bonds will be repaid over time with dock user fees.

Seward is largely excited about the opportunity for more visitors in the community and modernized facilities at the port, said Kat Sorensen, head of the Seward Chamber of Commerce and Visitor Center.

“It will be a boon for Seward in general,” she said.

Trent Gould, owner of Kayak Adventures Worldwide, a local kayak guiding business, said he’s concerned that bigger and more cruise ships could hurt Seward’s small-town charm.

“As a tour operator, we recognize the importance of tourism and we want to manage it in a sustainable way with people having a say in that growth,” he said. “When the cruise ships come in, those values don’t always align.”

Seward Vice Mayor Sue McClure said many cruise guests often head straight to Anchorage by rail or bus. That reduces the need for more seasonal workers or housing to support them, an especially urgent issue now as Seward deals with ongoing labor shortage issues.

While some cruise guests will spend time in Seward, she said the community can adapt to any labor issues or other complications that might arise.

One benefit is that the larger cruise ships, if they come, will create more work for the local longshoremen that support them, she said.

“I have no worries about what they’re proposing,” she said of the railroad’s plans.

As for the railroad’s plans to expand the freight dock in Seward, it will more than double in size after it’s widened and lengthened. It will be about 1,000 feet long when the work is done.

The freight dock expansion is part of a $25 million project, with a 2020 grant from the U.S. Maritime Administration paying for most of it.

The expansion will allow more efficient movement of the freight that arrives in Seward, such as fracking sand and pipes for the oil industry, officials said.

The railroad says it will focus on building the passenger dock first, then the freight dock.

The phased approach is needed in part to avoid disrupting cruise ship activity in summer, the railroad officials said.

Anchorage Daily News journalist Marc Lester contributed to this report.

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Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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