Port MacKenzie

PALMER — The Mat-Su Borough Assembly met prior to their regular meeting on Tuesday at a Special Meeting to discuss the future of Port Mackenzie.

Borough Manager Mike Brown recommended that the Assembly include up to $200,000 in the upcoming budget for marketing services for the port, much of which would be to dispel misinformation from draft Environmental Impact Statement processes. Before the meeting started, former Assemblyman Jim Sykes made some drastic suggestions to the Assembly during public comment.

“We have a lot of adverse publicity put in the recent EIS statement for the gas pipeline that they think is going to go to Kenai. Somebody was paid a lot of money to create a lot of fiction throughout the process and all of the sale. Allegations and false maps and everything that was done, the borough debunked but still the final EIS came out and some of that crap is still there,” said Sykes

Sykes suggested that the Borough sue over the inclusion of what he called “financially degrading” information in Federal documents. Sykes noted that while he was not in favor of Port Mackenzie prior to construction in 1999, it has a good location and could provide numerous opportunities including a port authority with the Port of Alaska in Anchorage. Port Operations Manager Therese Dolan detailed for the Assembly the timeline and accurate information about Port Mackenzie. Dolan began with a photo of the 754 foot long JP Azure, which draws 45.5 feet of water and docked at Port Mackenzie in 2010 as the deepest draft vessel ever to dock in Upper Cook Inlet. After construction began in 1999, the first vessel docked at Port Mackenzie in 2002. Beginning in 2004, a $9.8 million dollar bond package was built to construct the deep draft dock, a 1,200 foot long dock at 60 feet of water during low tide.

“We do not dredge,” said Therese Dolan. “We save millions of dollars a year because we do not have to dredge.”

Therese Dolan then noted the 14 square miles of the Port Mackenzie port district juxtaposed to the Port of Alaska’s 125 acres. After promising years at the port between 2005 and 2008 and the bond package that passed in 2009, oil prices plummeted and grant funds stopped flowing to development projects and Dolan said that borough staff worked hard to bring operating expenses down to approximately $500,000 per year, with scheduled maintenance often running over $100,000. Of the $60.5 million put into construction at Port Mackenzie, not including the rail spur, the State of Alaska provided $33 million, the Mat-Su Borough provided $12.5 million, and $12 million came from Federal funding, with $3 million in private funding. The total operating revenue in 2020 was the lowest ever at $87,910, but over $200 in revenue will be brought in by Port Mackenzie this calendar year. In 2022, the port is projected to create $275,000 of operating revenue.

“Things really are starting to look up,” said Therese Dolan.

Brown said that the borough should not limit potential opportunities at the port to bulk commodity exports, which may create competition between Port Mackenzie and the Port of Anchorage. Awaiting state funding for completion of the rail extension, Brown believes that additional advertising will result in increased revenue with no plans to construct additional infrastructure in the near future.

“Our recommendation... is to increase cargo opportunities,” said Brown. “There are plenty of the larger project opportunities but what we’re seeing is there’s already revenue in some of these smaller tenants and customers because of the location, because of access to the property, because the port is there.”

Public Works Director Terry Dolan reported on the maintenance costs at the port and the possible Federal grant through the EDA for $6.7 million which would sleeve all 64 piles and not require the borough to spend monies that have already been set aside for weld repairs. Dolan noted that the deferred maintenance on piles was not an emergency and allowed the borough to wait on possible grant funding. During a typical year, maintenance at Port Mackenzie costs between $50,000-$100,000, but exceptions were in 2015 and 2017 with wye failures. Community Development Director Eric Phillips detailed the leases and existing agreements with tenants at Port Mackenzie. With 14 square miles of land in the port district, 6,000 are developable acres and 65 of those have already been cleared. Terry Dolan recommended replacing small sections of the barge dock as funds become available, but said that stimulus grants could soon become available as well.

“We have a customer with a need and we have a transportation provider in the railroad and we have a railroad that needs about $60 million,” said Terry Dolan. “We’re looking at the possibility of potentially working with AIDEA on that or potentially with the Federal Government or EDA.”

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