A long-shelved railroad to the Mat-Su’s Port MacKenzie could instead become a road

PALMER — Almost a decade after a Matanuska-Susitna Borough rail project that had consumed $184 million in state funding came to a halt, a new push looks to restart work by converting a portion of the rail line into a public access road.

The rail project, first spearheaded by borough officials in 2005, sought to link the existing Alaska Railroad line in Houston to borough-owned Port MacKenzie, a little-used deepwater port across the Knik Arm from Anchorage first developed in 1999.

Envisioned as a way to move goods to and from the Interior and the port, the 32-mile rail line was projected to cost at least $303 million. But work stopped and the project was shelved in 2017 when state funding ceased thanks to the budget crisis. Completing the rail project today would cost an estimated $200 million, according to borough officials, bringing the total price tag to $384 million.

When work ended on the spur in 2017, rights of way spanning the entire planned line had been purchased, and large sections of rail bed embankment and bridges had been completed.

Now the borough wants to use federal funds to shift an 18-mile stretch of the line to a comparatively cheaper $70 million road project. Doing so would link the existing Port MacKenzie Road to Houston and the George Parks Highway via Miller’s Reach Road and eliminate the rest of the rail project.

A federal grant application for the project was approved unanimously by the Mat-Su Borough Assembly on July 18. The Assembly held a special meeting Tuesday to explore the issue with the area’s legislative delegation, state and railroad officials, and to hear public comments.

“There are essentially three options that we have discussed,” Borough Manager Mike Brown said at Tuesday’s meeting. “Number one, complete the rail project estimated at $200 million; option two, convert to a road estimated at $70 million; or option three, continue to do nothing. To be clear, the only option I’m opposed to is option three.”

The conversion project comes amid a series of other high-profile, state-funded transportation projects in the area, including a major widening project on Knik-Goose Bay Road currently underway and the controversial proposed $350 million West Susitna Access Road. That would run 100 miles to the Yentna Mining District, ending near the same spot the rail conversion extension would join the existing road system. A borough rail conversion project would provide a short cut between the access road and the highway.

The state Department of Transportation and Public Facilities, which is currently spearheading the access road project, filed a letter of support with the borough’s federal road conversion grant application.

While the projects are related, they aren’t part of a coordinated effort to build out the road system in the area, Katherine Keith, DOT’s deputy commissioner, said in an interview after the assembly’s Tuesday meeting.

“This is one piece of a much larger puzzle of development in the area,” she said. “In a case like this, we want to follow the borough assembly’s decision in this process and be able to adjust the state needs.”

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Shifting to a road is seen by the borough as a way to rescue the aging infrastructure at Port MacKenzie from total waste, Brown said. A 2021 report predicted that going forward, the port would handle one ship and six barges per year, but would need significant improvements and maintenance to keep it functional.

“The primary concern I have from a management perspective with Port MacKenzie: We’re on a clock,” he said. “We’re over 20 years old, and a lot of the dock facilities were constructed with 20, 25 years of usable life.”

While state legislators attending the meeting said they support somehow moving the project forward rather than continuing to keep it on ice, they worry abandoning the railroad means Port MacKenzie will never be fully utilized.

“Turning this into a road, frankly, you can almost guarantee it will be the death of Port MacKenzie,” said state Rep. Kevin McCabe, R-Big Lake, whose district includes the port. “We are not going to be able to drive enough trucks on the Port MacKenzie rail extension to support a port.”

State Sen. Mike Shower, R-Wasilla, and Rep. Cathy Tilton, R-Wasilla, were also in attendance.

Betting on the port’s ability to draw rail traffic for a line that is not finished and has no viable funding options is a risk the borough shouldn’t take, borough assembly member Stephanie Nowers said at the meeting.

“It’s very deeply frustrating to have a $184 million project that’s sitting there, and it just has to be maintained,” she said. “You look like a genius if you invest right and the market follows you, but you look like a turnip if you put a bunch of money down and then it doesn’t come through. I think the state has examples of turnips where we put a lot of money down.”