Anchorage Assembly approves expanded design for Port of Alaska’s cargo terminals

The Anchorage Assembly on Wednesday unanimously passed three measures critical to moving ahead with the modernization project at the Don Young Port of Alaska, including approval of an expanded design for cargo terminal two.

Wednesday’s votes ended a nearly two-year-long debate over whether to move ahead with the more expensive design for the two cargo terminals. Cargo terminal two will now be built to the same 120-foot width as terminal one, which means both docks will be able to accommodate 100-gauge cranes.

The Assembly also approved a bond sale of up to $180 million to fund work and payments related to the port modernization project in 2025. Another approved measure increases tariffs to pay for the bonds.

“These are big milestones in a very long-term project,” Assembly Vice Chair Meg Zaletel said.

The port’s infrastructure is at risk of failure, threatening a critical piece of the state’s supply chain. Officials have emphasized urgency in the modernization project, which is projected to cost a total between $1.8 billion and $2.2 billion.

“These are really big deals. All three of these actions put us on track to have a rebuilt port, so Mr. Falsey, should there be an earthquake, does not need to look out the window to see if the port fell into the water,” Zaletel said, referring to Mayor Suzanne LaFrance’s chief administrative officer, Bill Falsey.

The city is currently preparing to move ahead with construction of the first cargo terminal. That construction was slated to begin next summer and take about four years to complete. However, officials have said much of the terminal construction work will likely be delayed, possibly by a year, due to a lack of bids from construction companies. City officials say they are currently preparing to launch another procurement process to secure a construction contract.

[Construction of cargo terminal at Port of Alaska could be delayed due to lack of contractor bids]

The second cargo terminal is not yet fully designed, and that will occur after terminal one is built, Zaletel said.

However, “the design has to start now, and the design is essential to make sure we have the correct permitting in place and we can get accurate cost estimates as we pull together the plan of finance for the continued modernization of our port,” she said.

In 2021, the Anchorage Assembly passed an early design concept that called for one wider cargo terminal to be built for using cargo cranes to move freight, and a second, narrower terminal for handling “roll on, roll off” freight — freight that rolls off ocean freighters directly onto the docks.

But officials have said that two uniform cargo terminals would make the port more resilient.

The Assembly on Wednesday, before passage of terminal two’s expanded design, added a requirement that the port’s Design Advisory Board report to the Assembly by Jan. 21 on what would be necessary in order to also have roll-on, roll-off capability added to terminal one.

The tariffs to pay for the project will remain in place for many years, until the bonds are paid off.

With $180 million in bonds issued, the tariff on a barrel of petroleum products will increase to 11 cents next year and 19 cents in 2026, and for cargo, the tariff would rise to $4.80 per ton next year, and then to $8.29 per ton in 2026 and beyond. Tariffs for cement commodities will rise to 46 cents next year, then 79 cents in 2026.

Officials say everyday consumers may start to see a small impacts on the price of goods from the tariffs. The cargo tariff is likely to impact the price of items ranging from groceries to building materials, vehicles and heavy equipment.