Alaska governor approves sale of bonds for cruise ship terminal

Alaska Railroad Corporation

The state-owned Alaska Railroad Corp. can issue up to $135 million in revenue bonds to construct a cruise ship dock and terminal facility in Seward after Gov. Mike Dunleavy signed enabling legislation.

House Bill 65, signed by Dunleavy on Thursday, reached his desk Feb. 28, after being approved unanimously by both the Senate and House last month.

The bill "demonstrates how state government can spur economic development and growth with no impact to state finances," Dunleavy said in a statement.

The bonds will be secured by a 30-year agreement with anchor tenant Royal Caribbean Group, which guarantees a minimum of 140,000 guests annually. The port improvement fee assessed to these guests will cover the repayment of the bond debt.

The dock will be available for use by other cruise ship companies and would also be able to harbor Alaska Marine Highway System ferries, helping to bring back intrastate travel to Seward, according to the legislation.

The debt will be repaid from dock revenue or other funds available to the Alaska Railroad Corp., but the general credit of the railroad and the state may not be pledged for the repayment of the bonds, according to the legislation.

"The proposed facility is not solely for tourism; it is designed as a year-round, multi-use space for our community," Kat Sorenson, Seward's city manager wrote in a letter of support to lawmakers in January.

"With an improved terminal, Seward residents will benefit from a more welcoming venue for local events, such as the Seward Music and Arts Festival, or like our community-wide watch party for local Olympian Lydia Jacoby," Sorenson said. "This project represents an investment in community spirit and shared public space."

Replacement of the existing mid-1960s terminal facility, which has reached the end of its useful life, is necessary for the city to be able to continue to receive cruise ships, Alaska Railroad CEO Bill O'Leary said in a statement. The new floating barge dock with double-berth will be 748 feet long and 100 feet wide and be able to accommodate quantum class cruise ships, he said.

It will "bring economic benefits to communities across southeast, southcentral and interior Alaska as we ensure cross-gulf cruise ships can continue to dock in Seward."

The plan is for the industry to continue to use the current dock through fall 2025 and then demolish it and replace it prior to the 2026 summer cruise season, O'Leary said.