The city of Seward is ready to jumpstart development that has been decades in the making.
When Gov. Sean Parnell signed the fiscal year 2015 capital budget May 28, Seward was officially awarded $5.9 million from the state to complete its breakwater and begin full-scale work on what the city calls the Seward Marine Industrial Center.
Total, the city has gathered $25.9 million for the breakwater, to be built in front of Seward Ship’s Drydock. The money came in three chunks: $10 million as part of the $453 million bond package approved by voters in 2012; $10 million in the fiscal year 2014 capital budget; and most recently the $5.9 million approved by Parnell.
At 1,200 feet long when finished, the breakwater will all but enclose roughly 15 acres of water behind it, Seward Community Development Director Ron Long said. That space will be available to anyone wishing to lease it, Long said.
While it may not be momentous or even overly exciting, getting a breakwater in place is the lynchpin to developing the industrial center.
The breakwater will shelter the shipyard’s waterfront and the city’s adjacent cargo dock from the battering Gulf of Alaska waves that periodically make their way up Resurrection Bay.
“The cargo dock never really got any traction because the breakwater was never completed,” he said.
Parties from numerous user groups including oil and gas support companies, barge services and the Western Alaska Community Development Quota, or CDQ, fishing fleets have expressed interest in using the industrial harbor when the breakwater is standing, he said.
All of the CDQ groups currently homeport in Seattle and travel to the Bering Sea to fish.
A 2013 report to the Legislature regarding the $10 million appropriation emphasized that the Coastal Villages Region Fund CDQ group spends up to $10 million on vessel maintenance and nearly $20 million on moorage and other costs each year in Seattle.
According to the city, the CDQ groups could save up to $75,000 in fuel per trip by harboring in Seward versus Seattle.
Once complete, Long said it’s up to the city to be proactive and get firm commitments from the groups interested in using Seward as a base of operations.
“People have been listening to Seward say we’re going to build that breakwater for 25 years; they’re not going to put any money down on the table until they actually see something,” he said.
That time will likely come in about a year. Long said the city can begin dumping rock in October, as to not disturb returning salmon. He said the interim months would give contractors enough time to stockpile rock for the project from the nearby city quarry. Work will continue through April of next year, and if need be, the finishing touches will be put on the breakwater in the fall of 2015, according to Long.
Barring an unforeseen setback, the area behind the breakwater will officially be open for business in the spring of 2016, but access to the shipyard, cargo dock and fuel storage facility also will remain open during construction.
“We want to be careful that we keep those users alive and well during the construction period,” Long said.
Federal marine habitat impact mitigation plans — which the project’s U.S. Army Corps of Engineers wetlands permit is contingent upon — are currently being worked out, Long said.
“Now it’s close enough to fully funded that we’re gong ahead with (requests for proposal) and contracts will be on the street pretty quick,” he said.
When designing the breakwater, city officials took advantage of the state-of-the-art vessel bridge simulator at AVTEC, the state’s local vocational and technical training campus.
Long said variations of a basic breakwater design and extreme weather conditions were plugged into the simulator while vessels ranging from 400-foot tank barges to large catcher-processors and mega yachts were steered through the entrance.
In the end, the city saved the state some money on what was originally a $27.9 million project.
“We crashed tens of millions of dollars of vessels up against the virtual breakwater and as a result we changed a couple minor aspects to the breakwater and wound up peeling about $2 million off the cost,” he said.
The water that will be behind the breakwater is 24 feet deep now, Long said. He doesn’t foresee the need to have a deeper harbor, as users with larger vessels would likely head to the city’s deepwater railroad dock, but it could be dredged to 31 feet before undercutting the existing dock sheet pile would become an issue, he said.
The genesis for the Seward Marine Industrial Center came in 1986 when city voters approved a $30 million general obligation bond to purchase and construct the infrastructure for what shortly after became Seward Ship’s Drydock, Long said. It was then that the first portion of the breakwater was built as well.
Seward recently made its final payment on the 25-year obligation, he said.
The dry dock and the prospective business center are at the end of Nash Road across Resurrection Bay from the city proper.
“A little town of 2,500 people just retired $30 million of debt invested out of their pockets, so there’s a lot of public buy-in wanting to see this area developed,” Long said.
As Long explained it, the breakwater is one of three components to the Seward Marine Industrial Center. The second is the shipyard — in the process of being purchased by Vigor Industrial LLC, the Portland, Ore.-based shipbuilder that operates the Ketchikan shipyard as Vigor Alaska.
Vigor will act as the “anchor tenant” of the industrial center, Long said.
While the shipyard is operated privately, the property is owned by the city.
Vigor Industrial announced its preliminary agreement with Jim Pruitt, the owner of Seward Ship’s Drydock in January. In May, the Seward City Council approved operations and maintenance lease transfers from Seward Ship’s Drydock to Vigor.
Once the final details of the sale are worked out and it is finalized, Vigor Alaska’s shipyard development coordinator Doug Ward said Vigor plans to invest in the Seward shipyard as it did when it purchased the Ketchikan shipyard in 2012, although perhaps not quite on the same scale.
Vigor Industrial currently operates six shipyards in Oregon and Washington in addition to its Alaska facilities.
Working with the Alaska Industrial Development and Export Authority, which owns the Ketchikan property, Vigor has overseen more than $130 million of facilities construction and upgrades at its southern Alaska yard.
Ward said having two of the state’s largest shipyards under congruent ownership should help draw added marine business to Alaska and Long said the city’s discussions with AIDEA about Vigor as a tenant were nothing but positive.
Vigor spent roughly $250,000 on a comprehensive environmental assessment of the Seward shipyard and it came back with a “clean bill of health,” Long said, that was encouraging not only to city officials, but to residents as well.
Also reassuring was Vigor’s emphasis to hire locally when expanding its Ketchikan workforce, he said.
According to Ward, 97 percent of Vigor Alaska’s 161 employees at the end of 2013 were hired from Ketchikan.
“What we expect (Vigor’s) going to do is to keep on doing what they do best,” Long said. “They’ve demonstrated a commitment to the environment; they’ve demonstrated a commitment to their workforce and to doing a good job attracting repeat customers. That’s been their history and their business model and their standard that they’ve used in previous acquisitions. That’s what they’ve said they’re going to do and that’s what we look forward to.”
The remaining component to Seward’s Marine Industrial Center is the uplands, of which the city has more than it knows what to do with, according to Long.
The uplands are ideal for bulk raw commodity storage, he said, and businesses will likely develop around what support the harbor users and Vigor need. Those “self-sorting” needs could include net mending, propeller repair, welding and fabrication shops, warehouse and refrigeration space or even forklift rental, Long surmised.
He said in five years he hopes to be able to see the map of the industrial center’s future — ultimately a “thriving working waterfront” supporting business that “filters out through all facets of the economy that keep a town alive and thriving and a place where people want to be,” Long said. “That’s the kind of thing I’m looking for.”
Elwood Brehmer is a reporter for the Alaska Journal of Commerce. He can be reached at email@example.com.