The borough assembly has approved issuing up to $9 million in bonds to pay for waterfront expansion and development work, including a new barge facility. The debt would be paid back from port revenues, not property or sales tax revenues.

Assembly members voted unanimously on July 28 to authorize Borough Manager Mason Villarma to proceed with the bond issuance.

The borough, however, will not proceed with borrowing any money until it has specific plans for the waterfront work and negotiated deals with commercial users that would pay lease, dockage or wharfage fees to cover the debt payments.

The first series of bonds, totaling $5 million, could fund a new barge loading and unloading facility and freight yard.

A second debt issuance, for $4 million, could finance additional fill to the downtown waterfront to accommodate access to a new dock to accommodate smaller cruise ships. The borough is looking at filling in a couple of acres to create more usable land, which also could be used to expand the Marine Service Center.

It would cost the borough about $691,000 a year for 20 years to repay the debt on the two bond issues, assuming a 4.5% interest rate on the debt, according to the borough’s estimate. The debt would be secured by new revenue paid into the ports and harbors fund.

“We’ve got to guarantee to ourselves the ability to pay that debt,” before selling the bonds, Mayor Patty Gilbert explained on Friday, Aug. 1.

The borough first discussed the possibility of issuing bonds in May to build a floating dock and access ramp in the area between the existing barge landing and the Nolan Center. The idea came after a proposal from American Cruise Lines, which is seeking a new dock in Wrangell for its operations. The company runs summer cruises entirely in Alaska waters and often schedules overnight stays for its 279-foot-long ships.

The company wants a 40-year lease on borough tidelands, and has proposed building and owning the new dock. The borough, however, has not decided whether it wants a private party or the municipality to build and own the dock.

An eight-member team of borough officials, formed in early July, will negotiate terms of any deal with American Cruise Lines. Any lease or contract would have to come to the assembly for approval.

Villarma said revenue bonds are different from general obligation bonds, which are repaid by tax dollars. The debt on these revenue bonds would be repaid by fees charged to the companies using the new facilities, including American Cruise Lines and freight companies that use the barge ramp.

“This is different because it doesn’t create a burden for the taxpayer,” Villarma said. “It’s exciting to get this process started, because it’s one of multiple things we’re doing to secure a better future for our local economy.”

He added that assembly approval of the bonds will allow the borough to “act expeditiously” on the waterfront master plan and expand the tideland area for “other retail and commerce opportunities,” if deals can be reached with commercial users.

The need for a new barge ramp became urgent after an engineering report found the downtown barge ramp, which is 47 years old, had significant corrosion and structural issues. The borough in March notified freight haulers that the ramp was closed.

Companies have been using a temporary setup at the former mill dock next to the Marine Service Center.

“Having reliable freight service in Wrangell is significant, and finding a solution that suits the public’s best interest is important,” Villarma said. “The need for reliable freight is the impetus to start the waterfront development plan, which is something that has been discussed for a while.”

He said he is optimistic about the future and anticipates growth and an improved local economy.

The cruise line has said it would like the new dock available for the 2027 tourism season; the borough has said the waterfront fill and construction work could be scheduled for 2026.