Tourism

Alaska’s share of the global cruise industry is on the decline.

While the number of passengers to visit the state last year was nearly back to the level before the Great Recession, other cruise destinations continue to attract more ships.

The Juneau Assembly on Monday heard about the trend from an industry representative.

Long before he was a Republican state lawmaker and candidate for governor, John Binkley worked on his family’s riverboat in Fairbanks, doing tours for visitors to Alaska’s Interior.

“When we were growing up in our family business, my father used to always tell us that, ‘If you’re coasting, you’re going downhill,'” Binkley told the Juneau Assembly Committee of the Whole.

Binkley is now president of Cruise Lines International Association of Alaska, formerly the Alaska Cruise Association. He says the state has been coasting when it comes to attracting tourists.

“I think we’ve taken a lot of it for granted, what we’ve had here in Alaska in terms of the industry, and other destinations around the world have not,” he said.

Almost a million cruise ship passengers sailed to Alaska last summer, an increase from 2012 and nearly back to the levels seen in 2007 and 2008. But Binkley says Alaska’s share of the global market has declined from 6.5 percent in 2006 to 4.5 percent.

He says the companies that belong to Cruise Lines International plan to deploy 24 brand new ships over the next two years. But instead of sending them to Alaska, Binkley says they’ll be heading to places like the Caribbean, Northern Europe, Australia, and Asia.

“In Alaska we’ll fall a bit. We’ll actually be down slightly in 2014,” Binkley said. “Some of this capacity is going to these other destinations that will come out of Alaska.”

Still, Binkley said he remains cautiously optimistic about the future. He says some of the most successful cruise ship ports have partnered with the industry to improve their facilities.

“Recently we appreciate the efforts of the mayor and the administration in reaching out to the industry here locally, saying let’s sit down and talk about what the use of some of those head tax funds will be in the coming year,” he said. “What are some of the needs of the industry? How can we work together to make sure the community is spending those dollars to meet the needs of the industry in the future? I think those are examples of how we need to work together to be successful.”

Assembly member Kate Troll asked Binkley for his thoughts on the city’s planned $54 million expansion of its downtown cruise ship docks, to which he gave a lukewarm response.

“That’s $54 million that comes from the passengers that have to try and afford to come to this destination,” said Binkley. “So it’s great to have those facilities, but when you have to pay a premium for those, that then becomes an inhibitor for people to come, because the cost goes up.”

But Troll said she thinks the docks are still in the best interest of the community and the industry.

“I’m particularly interested in the fact that the proposal would provide conduits for shore side electricity for the cruise ships, so we don’t have to have diesel burning in our port area,” said Troll. “So, yeah, that’s all part of the package of making our port more efficient, more attractive, all those things.”

The project is being funded entirely with Juneau’s share of the state’s cruise ship passenger fee revenue. In 2006, voters approved a citizen’s initiative that included the head tax.

Binkley’s organization successfully lobbied lawmakers and the Parnell administration to reduce the per passenger fee in 2010. Last year, the cruise lines were successful in getting lawmakers to change another part of the 2006 initiative, lowering the standards for wastewater discharge.

A former bar manager of The Alaskan Hotel & Bar is threatening a lawsuit. He says being featured on Hotel Impossible has caused serious problems to his life. Lane Taylor claims the reality show episode was pre-scripted and says he was fired on television for ratings.

On television, Lane Taylor was fired from his job. He was the bar manager of The Alaskan Hotel & Bar, a job he’d held for two years. But, Taylor says, he was informed that – in reality – he wasn’t really fired:

“I discovered that it was probable that they were still going to air that I was fired on the show when in fact, I hadn’t been fired, and so I felt like I had no choice except to resign. I mean that’s my reputation and if I’m not really being fired, and it’s reality TV, why couldn’t they show that?”

Taylor says he never wanted to be part of the filming, done by New York-based Atlas Media Corp., but felt pressure to sign the participation and release agreement, “I was receiving threats from the producers. My employer was telling me she was going to replace me. I thought, well, if I don’t sign one of these, I’m done.”

Taylor says his televised termination was all part of a pre-scripted plan:

“That episode was rigged. It was flat out set up and anybody that thinks that what they showed on TV has anything with what was really going on has been duped.”

Alaskan Hotel acting general manager C. Scott Fry disagrees:

“I think they have some ideas of which way the show can go. Their mission is not to defame or embarrass anybody. Their mission is to show you better ways to run your business.”

Kelly Mazzei is the executive director of the state’s film office, which handles tax credits for production companies. She says reality TV is technically called unscripted television, but, “it’s still the entertainment industry and it’s still being filmed to make money and to get an audience to watch it.”

She says she hasn’t heard complaints about being intimidated to be on a show or inquiries about labor laws.

After leaving The Alaskan Hotel & Bar, Taylor filed for unemployment benefits, but was denied. He appealed it.

Before the Hotel Impossible episode at the Alaskan Hotel aired Jan. 27, Taylor attempted to block it, claiming his participation agreement was invalid since it was signed under coercion. He never heard from the production company. Now he’s threatening a lawsuit.

A judge has denied a motion to immediately stop work on the City and Borough of Juneau’s massive cruise ship dock expansion. But he’s agreed to hear arguments about a longer term injunction.

The Alaska Commercial Fishermen’s Memorial in Juneau wants to block the project from moving forward until the Alaska Department of Natural Resources completes the transfer of submerged tidelands to the city.

Even though construction on the first of two floating berths on the city’s downtown waterfront isn’t scheduled to start until after the 2015 cruise season, the Juneau Assembly last month approved a $54 million contract award to Seattle-based Manson Construction.

The nonprofit fishermen’s memorial has long been opposed to the docks, citing concerns over how they will impact the annual Blessing of the Fleet, as well as the view of Gastineau Channel from the memorial.

Judge Louis Menendez on Tuesday issued an order denying the group’s request for a temporary restraining order to keep the city from working on the project. Menendez said the nonprofit failed to show it would face “immediate and irreparable injury, loss, or damage.” He also denied the memorial’s motion for expedited consideration of the case. Menendez set a February 24th hearing on the memorial’s request for a preliminary injunction, which could stop work on the project indefinitely.

City Attorney Amy Mead said the law department will respond in writing to the memorial’s motion for an injunction prior to the hearing. While she declined to discuss specifics, Mead believes the city has a good case.

“We’re fairly confident that the fishermen’s memorial is not going to meet its burden in order to obtain from the court a preliminary injunction,” said Mead.

Juneau Port Director Carl Uchytil says the city remains confident the state will approve the transfer of submerged tidelands to the city. The Department of Natural Resources last month issued a final decision approving the land conveyance. But the memorial appealed and the decision was put on hold while it’s under review by Commissioner Joe Balash.

Uchytil says the city considered options that would have appeased the fishermen’s memorial, but the Assembly ultimately decided to move forward with the docks.

“The Assembly pretty much made the decision not to engage in any other discussions, you know, put it to bed,” Uchytil said. “Once the Assembly made that decision, I don’t think it’s proper that another department undermine that decision.”

Attorney and fishermen’s memorial board president Bruce Weyhrauch did not respond to requests for comment in time for this story.

The Alaska Commercial Fishermen’s Memorial in Juneau is asking a judge to stop the city from moving forward with plans to develop two floating cruise ship berths on the downtown waterfront.

It’s the latest attempt by the nonprofit memorial to alter or block the $54 million project.

Attorney and memorial president Bruce Weyhrauch last week filed a motion for a temporary restraining order and preliminary injunction in Juneau Superior Court. The motion seeks to keep Juneau from entering into an agreement or paying any money to build the docks until the State of Alaska completes the transfer of submerged tidelands in Gastineau Channel to the city.

Last month, the state Department of Natural Resources issued a final decision approving the land conveyance. But the fishermen’s memorial appealed and the decision has been temporarily stayed.

The memorial has consistently opposed the design of the docks over concerns about how they will impact the annual Blessing of the Fleet. Weyhrauch says the memorial board would prefer to work with city officials rather than go to court.

“That invitation has always been open to the city to resolve this matter,” Weyhrauch said.

The Juneau Assembly last week voted 6-3 to award a contract to build the docks to Seattle-based Manson Construction.

City Attorney Amy Mead told the Assembly that the hold placed on the state’s land transfer is a formality until DNR Commissioner Joe Balash can rule on the memorial’s appeal.

“This is an automatic stay that went into place once the fishermen’s memorial gave notice that they were appealing the decision,” said Mead. “So the stay will stay in effect until the final decision from the commissioner is made.”

Mead on Friday said the city is waiting hear from the court about the schedule for responding to Weyhrauch’s motion. The case has been assigned to Judge Louis Menendez.

Juneau Port Director Carl Uchytil says the Docks and Harbors Department feels it’s in the best interests of the community to move forward with the project.

“Docks and Harbors, the board, and presumably the Assembly feels that the risk of not acting outweighs the remote chance that Mr. Weyhrauch would be successful in any appeal process,” Uchytil said.

Construction on the docks is not expected to start until September 2015, with completion not expected until May 2017. Juneau gets nearly a million cruise ship visitors a year. The $54 million project is being funded entirely with Juneau’s share of the state’s cruise ship passenger fees.

The bids are in for Juneau’s massive cruise ship dock expansion project, and Seattle-based Manson Construction is expected to get the job.

The company’s $53.7 million bid was the lowest of two accepted by the city. Pacific Pile and Marine – also out of Seattle – bid $58.2 million. Two other companies, Kiewit and Orion Construction, were eliminated for failing to meet the minimum bid requirements.

The city estimated the cost of the project at about $55.4 million to be paid for entirely with state cruise ship passenger fees. It involves replacing the old docks downtown with new floating berths in Gastineau Channel.

Juneau’s Docks and Harbors Board recommended the bid award go to Manson at a special meeting on Thursday. The Juneau Assembly is scheduled to vote on the award at its regular meeting Monday night.

Port Director Carl Uchytil says work on the project won’t get underway until September 2015.

“The way we’ve got it arranged, they start after the last cruise ship leaves in 2015 and they have to have the south berth completed by May 1st, 2016,” Uchytil said. “Then they’ll demobilize and then they’ll come back in September 2016 and complete the north berth in May of 2017.”

Uchytil says the reason for the delay between bid award and project start is the availability of materials, namely the concrete floats used for the berths. He says all the contractors that make those floats are busy with the 520 floating bridge replacement project in the Seattle area.

Juneau’s project has been in the works for almost four years, and has cleared a number of hurdles. The nonprofit Alaska Commercial Fishermen’s Memorial continues to oppose the new docks. The group believes they will negatively affect the annual Blessing of the Fleet.

Also on the agenda for Monday’s Juneau Assembly meeting is a bid award for the Eaglecrest Learning Center. North Pacific Erectors had the low bid to build the new facility at the city-owned ski area. The company’s offer came in just below the city’s estimate of $2.7 million. Construction is being funded by the city’s one-percent project tax on the sale of goods and services in Juneau.

Project labor agreement review process on the agenda

The Juneau Assembly on Monday will vote on a resolution establishing a review process for project labor agreements.

The process was developed the Assembly Public Works and Facilities Committee and would be used to determine if such agreements are warranted on major construction projects undertaken by the city.

A project labor agreement is a pre-hire deal between a developer and contractors, setting basic terms for things like wages, benefits, and working conditions.

While project labor agreement opponents say they unfairly benefit unions, courts have upheld their use by governments, as long as the deal is shown to be in the public’s interest. The Juneau Assembly has adopted a city policy of using the agreements to the fullest extent allowed by law.

The proposed process for determining if an agreement can be used by Juneau departments would put the decision in the hands of a review team led by the City Engineer. Other members of the team would include the head of the department building the project, and someone from the City Manager’s office.

If the team can’t determine whether an agreement is warranted, it can refer the project to the Assembly public works committee.

Years of steady declines in cruise ship traffic to Sitka should be coming to an end — eventually.

Independent cruise industry consultant Andy Nelson told the Sitka Chamber of Commerce this week that because cruise itineraries are planned years in advance, there was nothing to be done about the expected drop in visitor numbers this summer. But after that, things were looking more “bullish.”

Nelson has been hired by Chris McGraw, owner of the Old Sitka Dock, to raise awareness among the cruise lines of the new deepwater facility in Sitka. McGraw’s father, Chuck, was also in the audience.

In his remarks, Nelson told the chamber that there was nothing Sitka could have done to reverse the decline in cruise tourism, which was aggravated by several factors — primarily the US economic recession beginning in 2008.

Sitka had impact of ships leaving, even before the US economy changed. And I just wanted to back up a little bit, because talking with Chuck and Chris, it’s been enlightening for me because I think some people feel that Sitka made a mistake. What did we do wrong that the ships left? And I’m not sure that Sitka did (make a mistake). When 9-11 happened it changed the marketplace in Alaska. Because of the impression that people in the Lower 48 were becoming more resistant to flying — at least right after 9-11 — and they would rather leave from a US port, ships moved from Vancouver to Seattle as far as homeporting. And so for the ships that went to Seattle, not only is the voyage a little bit longer — remember they have to do it twice — it adds a bit of time, and that’s all time that they can’t spend in the ports in Alaska. In addition to that, those ships have to make a Canadian port call, to follow the rules of shipping, which is the Jones Act, where they have to call on a foreign port. So for all of those ships, not only is the voyage longer, but they all had to call in Victoria as well, which took additional time. So the reality is that as that market developed in Seattle, with those itineraries they could only get in at the most three port calls in Alaska, Victoria, and get back to Seattle. So the byproduct of that is that Sitka lost port calls, Haines lost port calls, and some others did as well. And I’m not sure Sitka could have headed that off.

Nelson worked for Royal Caribbean for 25 years before becoming an independent consultant. He offered an insider’s perspective into why things were looking up for Sitka in the not too distant future. Disney, Norwegian, and Carnival cruise lines were all making single port calls in Sitka this summer, to assess passenger reaction to the community.

Nelson himself visited for the first time last October for the Alaska Travel Industry Association meeting. He said Sitka has a way of making a good first impression.

I think Sitka’s in a great position for new itineraries that are departing out of Vancouver. The Vancouver itineraries have time to stop in Sitka, and I think that Vancouver is going to host more ships in the future. In contrast to some other ports — and I’m not just talking about Alaska — Sitka offers a real authentic feel to it. It feels like a functioning village, city, whatever you want to call it. It’s very pleasant. If the experience I had in the fall is anything like the experience guests have in the summer, they couldn’t help but like it. It’s a great place. A lot of natural beauty, really strong history — all things that help the itinerary and help the marketing. You’ve got good shore excursion opportunities. One addition, and certainly I’m biased, is you’ve got a deepwater dock now. And that’s a huge benefit to Sitka. Because as Chris said there are cruise lines that won’t come to Sitka unless there’s a dock. Some will, some won’t. They’re going to make their own decision on that. Our message as we go out to the cruise lines — and yes, we’re hoping that they use the dock — but the message is, Come to Sitka. And my belief is that most of the new lines that come to Sitka are going to use the new dock.

Old Sitka Dock owner Chris McGraw prefaced Nelson’s remarks at the Chamber of Commerce. He said that the dock received 23 ship visits last year, and expected 26 ship visits this year, with the Seven Seas Navigator and Regatta comprising the bulk of those visits.

The first cruise ship call of the 2014 season in Sitka is the Westerdam, on May 7.