A new building to house Canal Marine Co., a larger space for Oceanside RV Park, new office and retail space or a new restaurant are possibilities for Roger Schnabel’s Portage Cove property.

Construction began this month to spread about 27,000 cubic yards of fill into the water just next to and behind the Lighthouse Restaurant & Harbor Bar.

The work comes more than a year after project manager Greg Schlachter received a U.S. Army Corps of Engineers permit in May 2015. The borough approved a land use permit for the development last year.

The permits were written on behalf of Front Street LLC, a corporation owned by Schnabel and his wife, Nancy Schnabel.

According to the Corps permit, the corporation is allowed to put roughly 25,030 cubic yards of gravelly sand with silt and 2,600 cubic yards of armor rock into 1.16 acres of water. The Schnabel property line is at the 12-foot high tide line, Schlachter said.

The project will extend the RV park’s east embankment seaward onto the beach.

Schnabel could not be reached this week. But Schlachter said Schnabel is directing all questions about the development to him.

Schlachter said one reason why construction started late was because the corporation tried to do it during the same time as the Portage Cove Harbor Expansion project.

Construction on the expansion project will start in early 2017. The Front Street corporation has five years to use the Corps permit.

More than a year ago, Schnabel approached former borough public facilities director Carlos Jimenez to ask if he could use fill dredged from the harbor expansion project. Jimenez OK’d the request if it would not cost the borough any more money than it would to dump the remaining dredged material offshore.

Schlachter said it is up to the contractors, Pacific Pile & Marine, to choose if it is cost-effective to let Front Street use extra dredged material on Schnabel’s property.

Schlachter said earth work will take place now and in the spring. A plan for constructing buildings on top of the fill is not yet set in stone, he said.

Schnabel owns the land and building that houses Canal Marine Co. and Oceanside RV Park. Kerry Town, who owns both businesses with his wife, Joyce, said they’ve operated both for 12 years. Canal Marine – which offers marine services, boat supplies, boat and small engine repair, and more –  has been there for over 30 years, including 12 years with the Towns.

“The goal is to expand the RV park and boat storage while also rebuilding the marine repair facility without impacting their business,” Schlachter said.

Town said Canal Marine and Oceanside RV are still open, but the impact on them has not been problematic because business has slowed going into the winter. Summer construction would have a bigger impact on the businesses, he said.

Front Street originally expected a requirement to provide environmental mitigation for its project.

Front Street’s permit application said it would “provide Alaska Chilkat Bald Eagle Preserve with 3.25 acres of the Porcupine Point Pond, the entirety of the portion privately owned, for restoration as wetlands.” And Front Street would “provide Alaska Chilkat Bald Eagle Preserve with adjacent privately-owned, delineated high value wetland, which we estimate to be 1-1.5 acres.”

But in the final permit, Schlachter said the Corps did not require mitigation. Despite the Corps decision, Front Street is in talks with Takshanuk Watershed Council to work on a joint project.