Alaska Railroad Gets Bond Authority to Upgrade Seward Dock

Jul 27, 2022 | Construction, Government, News, Transportation

Left to right: Senate President Peter Micciche, Alaska Railroad External Affairs Director Christy Terry, House Speaker Louise Stutes of Kodiak and Governor Mike Dunleavy

Left to right: Senate President Peter Micciche, whose district includes Seward; Alaska Railroad External Affairs Director Christy Terry, who is also the mayor of Seward, holding House Bill 127; House Speaker Louise Stutes of Kodiak; and Governor Mike Dunleavy.

Office of the Governor

The Alaska Railroad Corporation (ARRC) has the authority to sell up to $60 million in bonds to fund upgrades to its cruise passenger dock and terminal facility in Seward, now that Governor Mike Dunleavy signed House Bill 127 into law.

Where the Rails Begin

“Seward has been an essential gateway for the Alaska Railroad for decades,” says ARRC President and CEO Bill O’Leary. “Replacing the dock and enhancing our passenger terminal will ensure this important connection remains intact for all Railbelt communities for many more decades to come.”

The bonding authority would pay for the bulk of the $80 million project. Using ARRC’s own bonding powers means none of the project costs will be paid by state dollars. The state-owned railroad plans to issue bonds totaling $60 million, and the remaining costs will be paid through existing dock fees and capital funds.

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ARRC already has interest in the dock upgrades from Royal Caribbean Group, as the two are in negotiations for a multi-year berthing agreement that features an annual revenue guarantee.

“Our cruise brands have enjoyed operating out of Seward for more than twenty years, and with this investment, our guests will continue building memories that last a lifetime,” says Wendy Lindskoog, Royal Caribbean Group’s regional vice president of government relations for Alaska and the West Coast and a former ARRC executive. “Our aligned vision to support this new dock with the governor, legislators, and ARRC means long-term economic benefit to the region and the ability for Royal Caribbean Group to bring our newer, more energy-efficient ships to the market.”

Bank of America Securities, the underwriter for issuing the bonds, sent a team to visit Seward last week to get acquainted with the site. The construction timeline calls for the new passenger terminal to be operational for the 2025 season.

“We are thankful for the strong return of the cruise ship industry after a two-year hiatus,” says Seward City Manager Janette Bower. “We appreciate the support from Governor Dunleavy, Senate President Peter Micciche, House Transportation Committee Chair Grier Hopkins, and Representative Bart LeBon [the lead sponsor], allowing the Alaska Railroad to move forward with this valuable project and the economic benefit it provides through cruise ship tourism dollars for our local businesses, including commercial passenger vessel funds for both the city and borough, the marine industry in Seward, and throughout the state.”

The ARRC also has a project in the works expanding the freight dock and corridor improvements in Seward. In total, the ARRC is on track to invest more than $100 million in its Seward facilities over the next five years.

“We appreciate the governor’s strong support for the railroad and our ability to finance critical Alaska infrastructure,” O’Leary says. “We are on the cusp of celebrating the Railroad’s centennial, 100 years as a critical transportation link. It is fitting to mark the occasion by starting a project that will offer profound benefits to communities all along our rails.”

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