Alaska Railroad Greenlights Purchase of New Seward Cruise Port
Photo Credit: The Seward Company
The board of the Alaska Railroad Corporation (ARRC) approved the purchase of a $137 million new cruise facility in Seward. The purchase agreement clears the way for construction to start on the Alaska cruise industry’s largest turn port, marking the beginning or ending of a voyage. The facility is scheduled to open in time for the 2026 cruise season.
Veto Won’t Delay
The announcement came just ahead of Governor Mike Dunleavy’s decision on August 1 to veto House Bill 122, which authorized ARRC to issue revenue bonds to finance the Seward passenger dock and cruise ship terminal replacement. It was one of five bills vetoed that day.
“I vetoed this bill because it was passed by the Legislature after midnight of the 121st day of the second regular session of the Thirty-Third Legislature and the session was not extended by an affirmative vote of at least two-thirds of the membership of each house, in violation of Article II, Section 8 of the Alaska Constitution,” Dunleavy wrote in a letter to House Speaker Cathy Tilton vetoing the bill.
The veto was somewhat expected and won’t change the project timeline, says Meghan Clemens, ARRC director of external affairs.
“Shortly after the end of session, we concluded that the post-midnight bill passage would likely not satisfy the authorization requirement for bond issuance; it’s understandable that the governor vetoed the bill for this reason,” Clemens says.
Current Issue
September 2024
ARRC identified an alternative funding solution to keep the project on track, according to Clemens. The purchase will be funded by a mix of ARRC internal funds, sourced from dock improvement fees assessed to cruise ship passengers between 2022 and 2025—which are required to be reinvested in the dock—$60 million in ARRC revenue bonds the Legislature approved in 2022, and a commercial loan.
“Both the bonds and commercial loan will be secured by a thirty-year pier usage agreement with Royal Caribbean Group, which provides an annual revenue guarantee to match the debt payment for the life of the loan and bonds. It’s an important project for ARRC, for Seward, and has clear economic benefits spanning Southeast, Southcentral, and Interior Alaska as cruise guests travel our state—[we’re] really excited to keep this project moving forward,” says Clemens.
Port of Tomorrow
Photo Credit: The Seward Company
Upon completion, the Alaska Railroad agreed to purchase the new facility at the fixed price of $137 million, including associated debt secured by a thirty-year pier usage agreement with Royal Caribbean Group as the anchor tenant. The agreement grants Royal Caribbean preferential berthing rights. ARRC will continue to own and operate the facility as an open dock with multiple brands calling on Seward.
ARRC board approval was two years in the making, says Mickey Richardson, CEO of the Port of Tomorrow, representing the ownership of property developer The Seward Company.
“Large developments are never easy,” Richardson says. “The agreement guarantees cruise ships will continue to serve Seward for the next thirty years and beyond.”
The 750-foot, state-of-the-art, two-berth floating dock is engineered to accommodate modern cruise ships. Its center-point connections allow the two-part structure to be maintained in the future in Seward’s shipyards. The pier will have built-in support for provisioning fresh water, fuel from a local vendor, and shore power. A 150-foot transfer span connects disembarking travelers directly to an ARRC train or other ground transportation.
“It will be the largest floating pier in the state,” says Jason Davis, president of Turnagain, the marine construction firm contracted to design and build the Seward port. “Alaska’s infrastructure growth—and for that matter, the growth of the tourism industry—depends heavily on projects supported by the cruise industry, global travel partners, and Alaskans.”
The new facility includes a 68,000-square-foot terminal, which will not only welcome travelers and handle provisioning cruise ships but will deliver other economic benefits as the largest community space in the region.
An Important Project for the Region
Photo Credit: The Seward Company
“The existing passenger dock has brought incredible economic opportunities to Seward over its lifetime, but after sixty years of service it’s imperative that we replace this aging infrastructure,” says ARRC President and CEO Bill O’Leary. “We’re glad to have partners that recognize that fact as well, as this project would not be possible without Royal Caribbean’s thirty-year commitment.”
Royal Caribbean Group has had a decades-long relationship with the Alaska Railroad and the city of Seward already. Preston Carnahan, AVP of West Coast destinations, says the Seward port project builds on that history. “This new facility supports our commitment to deliver incredible experiences to our guests while also developing a state-of-the-art facility and community hub. This reinforces our commitment to the Seward community, who has graciously welcomed us to their beautiful home,” Carnahan says.
Richardson adds, “The Alaska Railroad board’s decision to purchase the new facility shows the value of the certainty of the partnership between Royal Caribbean Group, Turnagain, [The] Seward Company, and the executive team at the Alaska Railroad created.”
According to the Alaska Travel Industry Association, the cruise port in Seward is a key infrastructure investment for the future of Alaska tourism, ensuring the continued viability of cross-gulf cruises and supporting tourism development throughout Southcentral and Interior Alaska for decades to come.
O’Leary says, “The new dock represents a great investment in Seward as well as Alaska’s travel industry across the state, and we’re excited to help support the next sixty years of industry growth and opportunity in our state.”
Construction is scheduled to begin after the 2024 Alaska cruise season closes. Turnagain’s intent is to have the foundation for the new terminal in the ground before winter weather engulfs the region. Pier construction is slated for fall 2025 to ensure an uninterrupted summer 2025 cruise season, and it should be ready for a grand opening in spring 2026.
