KETCHIKAN - A refusal by the Ketchikan Gateway Borough Assembly to provide land may doom a proposed regional cold storage project.
The Ketchikan Regional Cold Storage Association last week considered disbanding after a 4-2 Assembly vote against providing a site for the project, which would allow storage of large volumes of fish in Ketchikan for value-added processing in non-fishing months.
Association members decided instead to see if the Assembly would reconsider its decision.
Borough officials and the local fisheries committee developed the proposal for a 10-million-pound capacity storage facility.
Keeping frozen products stored within the region could save transportation costs associated with shipping overflow volume south and then shipping it back for processing. The anticipated cost was about $8 million.
However, Assembly members last week rejected the transfer of 4.13 acres of borough land at Ward Cove.
The land is a significant part of the required local match for $7.35 million in state and federal grants, plus commercial loans.
The Assembly vote came after a lengthy discussion that focused on competition with private businesses and the lack of an anchor tenant. The Assembly also noted that the nonprofit association would not be paying property or sales taxes.
The decision was a disappointment to most members of the cold storage association board. Some expressed frustration in what they saw as the borough reneging on a long-standing promise to transfer the property.
Board member Mike Round said it was the borough's original interest in providing land that provided momentum for forming the association.
Board President Leigh Gerber said that the borough had entered into an agreement with the state, and, to a certain extent, a federal agency, to transfer the land.
"If the borough can't come across with their initial promises ... then it's obvious that the Ketchikan Regional Cold Storage Association doesn't have any grants, doesn't have any project," Gerber said.
He also noted that the association had reduced the footprint of the proposed site from 13 acres to 4.13 acres, and had developed a business and financing plan as requested by the borough.
"As a board, we've done just about every consideration, everything that the borough has asked us to do," he said.
The Assembly's decision drew praise from Larry Elliott, president of E.C. Phillips & Son, which owns a private cold storage and seafood processing plant in Ketchikan.
"We appreciate the borough Assembly's support of private business and realizing how tough it is in a competitive industry to compete with public funds, and realizing we need to keep property on the public tax rolls," Elliott said.
Becky Hultberg, a spokeswoman for Gov. Frank Murkowski, reiterated the governor's support for the cold storage.
"We are evaluating the ramifications of the (Assembly's) decision," Hultberg said. "The governor has been and continues to be a strong supporter of the Ketchikan cold storage facility and economic development in Ketchikan."