In another step toward moving freight barge operations out of downtown and to the former mill property at 6-Mile Zimovia Highway, Alaska Marine Lines has applied to lease a parcel of borough-owned tidelands for a new facility.

The planning and zoning commission Nov. 4 unanimously recommended sending the lease application to the borough assembly for approval.

“This application … represents an initial procedural step, establishing borough and commission support for a tidelands lease in principle,” explained the staff recommendation to the planning and zoning commission. The lease application, however, does not commit the company or the borough to the project.

“This is a piece of the puzzle,” Economic Development Director Kate Thomas told the commission Nov. 4.

The borough and AML signed a memorandum of understanding in August to coordinate efforts toward moving the town’s barge ramp and freight staging area off the downtown waterfront and out to borough-owned property at the former mill site.

“The ultimate objective of this collaboration is to use reasonable efforts to negotiate and execute a binding definitive agreement(s) on or before December 31, 2025, that enables construction of the new barge landing and freight facility in 2026 and implements an ownership and operating structure,” according to that agreement.

“We will continue to follow the plan outlined in the memorandum of understanding (MOU), including going through the process of design and permitting for the construction of a barge facility at the former 6-Mile mill property,” Ryan Dixon, director of marketing and media at AML, said in an email on Friday, Nov. 7.

“Once the design and cost estimates have been determined, we will be able to make a final decision on moving ahead with the project,” Dixon said.

“Basically, the MOU establishes a framework for us to move forward,” Borough Manager Mason Villarma told the assembly in August. “It doesn’t legally obligate us to anything. It’s just a road map for how to proceed with what we’re trying to accomplish. This is the beginning of a public-private partnership.”

The company’s tidelands lease application says the project would include setting four mooring dolphins in the water and placing a 120-foot-long barge ramp at the northern end of the 6-Mile property.

Depending on the final design, the company also would need to lease a portion of the adjacent uplands.

In its Oct. 28 lease application to the borough, AML estimated the cost of the facility at $8 million.

“The proposal represents a relocation of Wrangell’s existing freight operations from the downtown waterfront to an industrially appropriate site,” according to the staff report presented to the planning and zoning commission.

Construction work could start in June 2026, with completion in June 2027, the staff report said.

Barges had tied up at the decades-old downtown facility until spring, when the borough closed it down after an engineering report determined the steel ramp suffered from “advanced corrosion, deformation and risk of failure.” The borough established a temporary site at the Marine Service Center, but it’s crowded and the use of forklifts for loading and unloading is more challenging than a drive-on and drive-off ramp.

The borough purchased about 40 acres of upland 6-Mile mill property for $2.5 million in 2022, with the intent of attracting private investment to develop the land for industrial and commercial use. It traded several acres at the southern end of the property earlier this year to Tideline Construction, in exchange for the company clearing the entire parcel of debris and equipment — including a sunken flatbed railcar used as a bulkhead — left behind by former mill operators.

Tideline is using its acreage for scrap metal recycling operations and as a base for its construction business.

The borough continues to pursue “grants and funding for site planning, subdivision and infrastructure improvements that will enable future leases and sales for compatible industrial tenants” at the 6-Mile property, according to the staff report to the commission.

“The long-term vision is to establish an industrial planned unit development encompassing the 6-Mile site, integrating cargo, maritime and light industrial uses within a coordinated land management framework.”

The state transferred the tidelands in front of the property to the borough more than 30 years ago.