FIFTH OPENING – The Sitka seine boats Hukilau and Rose Lee pump herring aboard this afternoon at the end of Deep Inlet during the fifth opening in the Sitka Sound sac roe herring fishery. The opening was being held in two locations beginning at 11 a.m. (Sentinel Photo by James Poulson) 

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Daily Sitka Sentinel

Industrial Park Board Approves Land Sale

By SHANNON HAUGLAND

Sentinel Staff Writer

The Gary Paxton Industrial Park board voted Wednesday night in favor of selling two parcels of land at the park to Silver Bay Seafoods for about $1.14 million, and entering into a “lease to purchase” agreement on the administration building property.

Garry White, left, and Mark Gorman look at an areal view of the Sawmill Cove Industrial Park Wednesday. (Sentinel Photo)

But board members held off on making the more controversial decisions about sale of other property at the park to Silver Bay or another prospective buyer, saying they needed more information before going forward. They also wanted guidance from the Assembly, and to give the two companies a chance to work out an agreement.

The Assembly will have the final say on all sale of property at the city-owned industrial park.

Silver Bay Seafoods says it wants to take over the majority of the land in the park to expand its seafood plant, build a canning line and process fish waste. The company also would like to take over the administration building for office space and operate a marine services center, working with Halibut Point Marine to build a boat haulout.

The three-hour session was a regular meeting of the industrial park board, which usually meets during the day at its downtown office. But park director Garry White set the session for an evening in Centennial Hall to give the public a greater opportunity participate and hear the presentation from Silver Bay.

About two dozen members of the public attended with only a few offering comments.

Silver Bay CEO Rich Riggs said the company currently has a $30 million investment on the property, and would like to continue building on its success.

“Our primary vision is still to have state-of-the-art processing facilities,” Riggs said in his presentation. He highlighted the growth of the company since its founding in 2006 in Sitka, to building plants around Alaska, as well as in California and Puget Sound. He said he and his partners are invested in Sitka.

Major changes from earlier proposals include leaving 1,000 linear feet of waterfront property in the city’s ownership, and reducing one area in hopes of accommodating the interest in the same parcel by another company, Alaska and Pacific Packing. Riggs said the scope of APP’s work appears to complement other services SBS is planning at the park.

The second deal on the table is for a lease to Alaska and Pacific Packing to build facilities to design and fabricate seafood processing equipment and other marine services. Those plans call for building an access ramp and floating dock, as well as buildings on the uplands.

The two deals overlap at a few points. No resolution was reached, and board members encouraged White to work with APP and Silver Bay on a possible compromise to avoid a conflict.

The board voted 5-0 to:

– sell lot 11 on the side of the park closest to town, to be used as a seafood byproducts and fish oil plant. The 25,606-square-foot lot will be sold at the appraised value of $319,000

– sell lots 9c, 12a and 13 in the center of the park, next to the proposed multipurpose dock location. The 173,054-square-foot parcel (4 acres) will be used for value added seafood processing and cold storage. (SBS has removed its offer for lot 9a, where Alaska and Pacific Packing had planned its project, but a conflict remains over access to the waterfront between the two companies.) The lots will be sold for the appraised value of $825,000. The city plans to build marine haul-out piers to accommodate a 250 ton marine TravelLift, owned by Silver Bay, and Silver Bay would install an EPA complaint wash-down pad.

– lease to purchase the administration building property, a 37,244-square-foot parcel to be used as corporate offices of Silver Bay and administrative offices for the marine services center. The company will pay $1 a year to lease, until it’s available for purchase for the land price of $233,000. (The 32,000-square-foot building has been appraised at zero.) The city in 2001 accepted a $5 million grant for repairs and is not allowed to sell it for another seven years. White said the building operates at a loss, even when fully occupied. Under the agreement approved by the board, the company is obligated to pay for repairs and maintenance, and purchase the building when the conditions expire on the Economic Development Administration grant.

Still on the table are the offers from Silver Bay to buy:

– a portion of lot 9a, about 35,000 square feet of waterfront property next to the multipurpose dock and upland from the current utility dock for a vessel wash-down and short term vessel storage. The city proposes leasing the property for 12 years, with an option to buy if milestones are met.

– lot 15, which is 113,369 square feet in the center of the park, for vessel storage and covered work space in the future. The city is proposing a 12-year lease with the option to purchase if the company purchases a TraveLift that is operational on site, installs an EPA- approved washdown pad, and has lifted 20 vessels.

– lots 4, 9a and water access (89,031 square feet) for a marine services center with the same 12-year lease terms, and the option to purchase. (Lot 8 was originally part of this parcel, but SBS withdrew to allow the city to negotiate for the parcel with Alaska and Pacific Packing, which is also interested in the same land.)

The total appraised property value of all parcels for SBS is $3.1 million.

One of the terms in the proposed sale gives the city the first right of refusal to purchase lots 4, 8 and 9a and areas designated as water access in the event SBS offers the properties for sale.

The board didn’t consider the offers on parcels where a second lease offer had been received by Alaska and Pacific Packing, which proposes leasing Lot 4 for engineering offices, a fabrication shop and future freezing operations (26,031 square feet). The board proposed milestones that the company employ two full time people for 12 months, and freezes at least 10 tons of fish waste on the site.

APP has also asked to lease a 12,500 square feet of tidelands directly in front of lot 4 to construct an access ramp and floating dock to service a floating processor and other vessels. Also requested is Lot 8, for 32,362 square feet for future marine service uses; and a portion of 9a, a 30,000 square feet lot for marine services, which includes a little waterfront.

The appraised value of the lease is $87,350 a year. APP has proposed paying $47,643, after receiving a $10,000 annual credit for each employee hired, for the first three years of operation.

APP owner Pat Glaab said his plans, which were submitted first, call for “building a business incorporating highly skilled professionals and innovative processing technologies, and Sitka is my first choice for this enterprise.”

He said his resume goes back 30 years, operating, designing and building fish processing equipment and facilities, including the Silver Bay plant.

“I have been on the leading edge of fisheries expansion and development and have had the good fortune to be the principal design and construction engineer for nine major retrofits and new plants,” Glaab said in his letter to the board.

He told the board that guaranteed access to the waterfront is critical to his plans.

From the public, Nancy Davis, who was on the original Sawmill Cove Industrial Park board, spoke in favor of the SBS proposal.

“Jobs, jobs, jobs have always been number one since the pulp mill was shut down,” she said. Davis said Silver Bay is a company that’s “tried and true, is successful, and are Sitkans.”

On a discussion about a multipurpose dock, the board directed city staff to come back with an estimate of what it would cost to build a dock with a 200-foot dockface, with a depth of 40 feet and the capacity for a 250-ton Travelift to be used in conjunction with a private haulout and marine services center. The board also asked for an estimate of what facility the city can build with the $7.5 million in state funding available for the project.

“It’s critically important we get a marine haulout,” Chairman Grant Miller said, speaking by teleconference. “We’ve been hemorrhaging boats for a long time now. In order to (restart) our economy and bring industry back to full life we need to get a facility that can handle these boats.” 

City Public Works Director Michael Harmon said he believes a dock like the one the board is talking about would cost $11 million or $12 million, but said he would get back to the board with his estimate.

City Administrator Mark Gorman said the idea of a marine services center, including a haulout, seems to be the one idea at the park that the community can agree on.

“I haven’t heard from anyone that we shouldn’t build a marine services center at the park,” he said. “I haven’t heard anyone say that’s a really bad idea.”

He cautioned the board that no help would be coming from the state or federal government for such a facility.

“We have the potential for a private-public partnership to achieve something the public supports in terms of infrastructure,” Gorman said.

The only issues that were resolved from the SBS offer were the sales for the two parcels, and lease to purchase agreement for the administration building. The proposals must go to the Assembly for approval.

White said today he is working on setting up a joint work session between the Assembly and the board to work out issues.

The board also had other business on the table, and voted:

– 5-0 to recommend selling lot 17 for $110,000 for Ed and Clara Gray of Monarch Tannery for a building to house the company’s tanning operation. Ed Gray, participating by phone, said his company hopes to eventually process 5,000 marine mammal skins a year, to support a potential $15 million sewing industry in Southeast. Monarch is being displaced from the administration building, with the sale of the lot to SBS, and needs another home for his company. The board debated briefly whether to include performance milestones, but in the end declined to do that.

“I think Ed has to go somewhere,” Miller said. “The price has already gone up. I’d hate to put up more hurdles.”

 

All board members were present: Miller (by phone), Chris Fondell, Ptarmica McConnell, Scott Wagner and Dan Jones.

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20 YEARS AGO

March 2004

Matthew C. Hunter of Sitka recently returned from Cuba as part of a St. Olaf College International and Off-Campus Studies program. Hunter, a junior physics major at St. Olaf College, is the son of Robert and Kim Hunter of Sitka.


50 YEARS AGO

March 1974

Eighth graders have returned from a visit to Juneau to see the Legislature. They had worked for it since Christmas vacation ... Clarice Johnson’s idea of a “White Elephant” sales was chosen as the best money-maker; Joe Roth won the political cartoon assignment; highest government test scorers were Ken Armstrong, Joanna Hearn, Linda Montgomery, Lisa Henry, Calvin Taylor and David Licari .....

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