Owners of Glacier Lands say they will go out of business if the city doesn't stop selling rock to the private sector.
Glacier Lands, which owns a 52-acre gravel pit at Montana Creek, has lost revenue since the city started selling rock from its Stabler's Point Quarry in 2002, said James Wilcox, the company's president.
"We are basically shut down," Wilcox said.
But contractors and developers said they want the city to continue selling rock.
"If the city stops, it will create a monopoly for Secon," a private company that owns a rock quarry in Hidden Valley, said Timothy Miller, general manager of Miller Construction.
"The city and different state agencies have been selling rock and gravel for years. This is nothing new," Miller said.
The Juneau Assembly Lands Committee will review the issue in its next meeting on Monday.
Stabler's Point Quarry is next to Glacier Highway near the Auke Bay ferry terminal. It produces 50,000 to 75,000 tons of rock a year, said Bob Millard, a city engineering project manager who supervises the mining of city quarries.
Millard said about 10 to 20 percent of the rock from Stabler's Point goes to private contractors while the rest is used to build state and city projects. Alaska Glacier Seafood, Juneau's second high school and Don Statter Small Boat Harbor are some projects that have used or will use rock from Stabler's Point.
"Most of it is just management fees," Millard said. "It doesn't generate a lot of revenues. It is a break-even proposition."
In 2002, the Assembly approved the sale of rock to private contractors for $1.60 per ton. City officials said the sale would lower the cost of private projects, promote healthy competition and stimulate the economy, according to a memo from city Lands and Resources Manager Steve Gilbertson to the Assembly.
Once enough rock is removed the city plans to use the quarry area to create a straighter alignment for Glacier Highway.
"There have been fatalities at that corner on Glacier Highway," Millard said. "It is in the city's and the public's interest to produce rock so we can create the new alignment."
In addition to Stabler's Point, the city owns three other quarries: two on the Eaglecrest Ski Area access road and one at Lemon Creek. All three of those quarries provide rock to city projects exclusively.
Wilcox, who mostly sells gravel and sand, said the city has created unfair competition.
"We have to pay mining taxes and property taxes and get a permit from the city," Wilcox said. "The city doesn't have to pay these fees. Of course they can sell the material cheaper."
Miller, who has built roads and subdivisions in Juneau for 26 years, said the city's rock is not cheap at all. He said other government agencies sell rock about three times cheaper than the city. But he still buys rock from Stabler's Point because of its quality and convenient location.
"It is on a major highway and the rock is good," Miller said. "And we like to drill and shoot them ourselves so the size of the rock fits my projects."
I-Chun Che can be reached at firstname.lastname@example.org.
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