In the old Pelican Seafoods, Inc. crab plant — a huge dilapidated aluminum building next to the largely defunct fish processing plant on the west end of 1.7-mile long town — Steve Daniels walked through the egg room, formerly used to process salmon eggs, and the salt room, a storage space used to preserve fish caught by commercial fleets fishing in Cross Sound.
A machine to cut the heads off halibut, assembly slime lines, heavy industrial scales and high blast freezers all sit unused in the 40,000-square-foot building that has been shuttered for the past four years.
“It’s all just junk being stored here,” he said.
The mid-morning light streamed through the windows in one of the main rooms. It caught his eye during a recent tour of the facility and caused him pause.
“See this room right here?” he asked. “How the ceilings are so high? This could be the dining area. That’s a 25-foot wall of picturesque windows.”
“This is actually probably one of the best views in town,” added Village Public Safety Officer John Grady, the only person in town with keys to the locked-up plant.
“To use this for 7,000 pounds of fish a year would be a shame,” Daniels replied. “ ... But this here, you could see how this would be a fabulous dining area.”
Daniels and his business partner Kent Craford are proposing investing $2 million to transform the slumbering plant, fish house and adjacent properties into a world-class fishing destination. The two pitched their redevelopment proposal to the city council back in August under their business license Fairweather Development LLC.
“It’s just a tremendously underutilized asset that with some vision could be a huge opportunity to create a really world-class destination,” Craford, the co-owner of Alaska Seaplanes, said. “Much like Waterfall, but with better fishing.”
The proposal not only raised eyebrows from some local residents, who are reluctant to give up the blue-collar feel of the small remote fishing community some 70 miles away from Juneau, but it also gave rise to a counter-offer from a second interested party whose vision for the property is perhaps more aligned with those who see Pelican’s future in reviving its past.
Seth and Anna Stewart proposed to buy the crab plant alone in January to expand their custom seafood processing business in Pelican, Yakobi Fisheries LLC. They offered to purchase it for $125,000.
“A lot of people in Pelican want to keep things toward commercial fishermen, and the majority of the people that are going out there for commercial and sport fishing, there’s no one in that area (processing fish). All the fish is having to be packed (on) another boat with (fishermen going) from Cross Sound to Hoonah, (from Excursion Inlet) to Juneau, so it’s something that’s needed,” Stewart, a 32-year-old born and raised in Pelican, told the Empire Monday.
Fairweather Development came back with an alternative offer last month, to buy the crab plant for $250,000.
Before the plant and surrounding properties can be sold, it first must be divided up into separate lots. The city began that process this year.
It will ultimately be up to the voters to decide which properties should be sold and which should remain city property and held for public use, said Mayor Patricia Phillips. Phillips said the process to get to that point is long and dictated by city code, but she hopes the issue will be on the ballot this October for Pelican’s regular election.
“The lands to be sold will be put on a ballot and put before the community for a vote,” she said.
In the meantime, the city has begun to hear proposals, like those from Fairweather Development and the Stewarts. The city council has much discretion in guiding the process in the direction they see fit.
Some city councilors are trying to wrap their heads around the idea of greeting tourists as guests of honor rather than members of a commercial fishing fleet. Pelican has deep ties to the fleet since the town is ideally located on Chichagof Island in Lisianski Strait, close to the rich Fairweather fishing grounds. The seafood processing plant was the basis of the town’s economy since Pelican Seafoods was established in 1938.
“That’s what Pelican’s pretty much all about,” Tom Andrews, a city councilman and commercial fisherman, said of commercial fishing. “That’s how we survived all these years.”
It would be “strange” to see throngs of tourists walking Pelican’s boardwalk rather than sport or commercial fishermen, Andrews said, although he noted he is keeping an open mind. He’s pleased someone’s interested in the city-owned property at all after years of disuse.
“It’s nice to see interest in the place for sure,” he said. “We’ve had two or three different parties interested in it. It’s encouraging to see that.”
Other residents are eagerly welcoming of a change of pace, given Pelican’s stagnant economy.
“We don’t even have a grocery store,” Rose Miller, the owner of the only bar left in town, Rose’s Bar & Grill, said in wishing Fairweather Development luck. The general store is part of the Pelican Seafoods property and closed alongside it in 2010.
Pelican’s economy was hit hard by changes to the fishing industry in the 1990s, such as the implementation of the Individual Fishing Quota in 1995, fishing and crabbing closures in Glacier Bay and nose-diving salmon prices after farmed salmon flooded the market. Since then, commercial processing has screeched to a halt. The fish house processed 5.5 million pounds of fish in 1995, and by 1998, that number shrunk to a mere 710,000 pounds.
As the seafood plant and commercial fishing fleet went, so too did the economy. The town’s population dwindled to the double digits, and general livelihood diminished as families moved elsewhere.
“It was a huge part of the town,” Phillips said, of the Pelican Seafoods property, where she herself began working in the general store and slime line at 14. “I mean a lot of the activity that happened down there would have this multiplier effect in the rest of the community. We had a restaurant, we used to have two bars and two liquor stores, and now we have one bar and one liquor store.”
Ownership of the property has changed hands four to five times in the past two decades. The city of Pelican obtained it in September 2010 by negotiating a property tax foreclosure with the then cash-strapped Kake Tribal Corp.
Council members had the idea to begin subdividing the properties (which includes the crab plant, the fish house, the general store, seven houses and two bunkhouses) to save their schools, the mayor said. Pelican runs its own school district, but it may shut down due to lack of students.
If the number of students drops below 10, its funding drops to 75 percent the first year, 50 percent the second year, 25 percent the third and will receive zero funding the fourth.
“We may drop below 10 next year,” Phillips said. “We had 12, now we’re under 10 again.”
Phillips said it was too premature to disclose her opinions about the possible redevelopment.
“Where does the community want to go from there, that’s a community decision,” Phillips said. “I have my own opinion (on) how I think it should go, but I’m here to guide the process along.”
It seems, however, that the Fairweather Development offer is at odds with what the city envisions for itself, as it has been positioning itself to regain its connection to the fishing fleet once it obtained the Pelican Seafoods property in September 2010.
The city got its old ice machine back on board last year and began providing free moorage in the harbor for those fishermen who stop by Pelican for fuel and ice. There is also a burgeoning custom small-scale fish processing market.
Daniels, a 60-year-old commercial fisherman turned businessman who owns and operates a lodge in Pelican, and Craford don’t believe fish processing has a certain future in Pelican, at least not on the commercial scale it had in the past. They said, though, that their redevelopment proposal isn’t necessarily mutually exclusive from fish processing. Calling it a “cluster concept,” they said they could rent out space to parties interested in doing that since the infrastructure is still available for use and the building is huge.
“They’re not mutually exclusive,” Craford said. “In fact, they could be complementary, and they could together provide a mass that I think we need to get the economy going there again, keep the school open and provide an economic foundation for Pelican that is sustainable.”
Their proposal made to the council entails redeveloping the crab plant into a multi-purpose lodge, conference facility and adventure center.
“The important distinction there is that unlike places like Waterfall (a resort on Prince of Wales Island), which is really just fishing, the idea is to have some diversity in application and use, and that kind of opens you up to other markets and different people you can attract,” Craford said. “And also, the idea there is to have a year-round use, (although) it would certainly be (heavily) seasonal.”
One of the first priorities, they said, would be putting a new facade on the crab plant, re-opening the grocery store and opening a hardware and marine store. They would also return the seven houses and bunkhouses into a habitable condition and find individual buyers who would continue to invest in upgrading them.
As for the fish house, which is bigger than the crab plant but is in worse shape and has less real estate value, they proposed making it available for purchase or lease to a private party to do what they will. The private party could continue fish processing or open other small businesses in the space.
“We would split off the fish house and hopefully find a buyer, or someone to lease it, or we could work with the city, perhaps, but we’re not particularly interested in fish processing,” Daniels said. “We think that its future is very questionable there, particularly on the scale it has been in the past. But we’re not against it, and we’d like to do whatever we can to facilitate — we don’t want that part to just rot and fall into the ocean. We think maybe a public-private partnership would be the best way to go about it, but that’s not the kind of business we want to run.”
They offered the city $200,000 to purchase all the properties, and proposed investing $2 million in all the properties over a five-year period.
Daniels said their motivation isn’t money — it’s to breathe life back into the town.
“I figure I could put 10 years into this project and basically my life savings, and I’m willing to do that not because I think this is a great way to make money — because the truth of the matter is there’s a lot of easier, surer ways to make money, and I don’t really care about making money ... But I would like to spend the last 10 years of my productive business career thinking that I helped this town find its way into the future.”
Daniels lived in Pelican from 1981 until 1988. He made a living there trolling for salmon as part of his 40-year career in commercial fishing. He also served on the city council and was the high school wrestling coach.
He left Pelican to move back to his hometown of Portland, Ore., but returned a decade later in 1997 and has lived there part-time ever since. He still remembers pulling up to the dock on his first day back to town and hearing a dog bark.
“You could never hear something like that before,” he said, aghast. “The town just had a buzz about it. And then it was like, wow, you didn’t see anybody, nothing was going on. It was the strangest thing.”
He added, “Their whole way of life has fallen down all around them. But back in the late 1970s, people trolling for salmon were making huge amounts of money and living a wonderful lifestyle. There were some golden years. And people thought it would last forever, like we always do.”
Stewart said his counter-offer would also benefit the local economy.
“We believe (the) potential value of the Crab Plant to the City is not in the sale price, but in the benefits the business will bring to the community of Pelican,” he wrote in the proposal. “Last summer Yakobi Fisheries processed almost 7,000 pounds of salmon in Pelican. Obviously this is a fraction of our future business goal, but it does establish Yakobi as the largest commercial seafood producer now operating in Pelican. The city already receives raw fish tax and sales tax resulting from our production and we already employ Pelican residents. This is not a new business endeavor for us; we want to expand our already existing business.”
He added in an interview that the crab plant is big and his business probably won’t require all the space.
“I think that the building can be used for multiple things, whether city wants to maintain ownership and lease it out or sell to one person, it would give us space that we would need to expand, but also it leaves some space for other community members to start other businesses there,” he said. “I just think that it would be a good asset to the community, (and I’m) willing to work with the community and get along with everyone there and get more business there.”
In light of the Stewart’s counter-offer, the Fairweather Development Company offered up an alternative proposal to buy the crab plant alone for the price of $250,000.
“While that (original) offer still stands, we welcome the opportunity to purchase the crab plant ‘a la carte’ and let other investors acquire the remaining properties,” the company wrote to the city council last month. “Our two offers reflect the obvious — the crab plant alone is worth more than the whole package. The other properties represent a negative real present value in our opinion.”
Until local residents cast a vote to decide the fate of the property, a big question looms. From which vessel does Pelican’s savior fisherman disembark: a blue-collar seiner, or a sleek chartered yacht?
• Contact reporter Emily Russo Miller at firstname.lastname@example.org or at 523-2263.