This story has been updated.
A representative from the U.S. Transportation Department said he’s “extremely concerned” Haines won’t meet a deadline for completing environmental reviews required to move forward with its $25 million Lutak Dock rebuild project.
The news came in a Friday letter from David Bohnet, a grants supervisor for the Transportation Department.
He also wrote that the borough’s contractor, Turnagain Marine, ordered $10 million worth of steel for the Lutak project without proper approval. Now Turnagain says it will sell the steel and presumably buy more to finish the project, should it get approved.
It’s not clear whether a new steel purchase would substantially increase costs of the project. Turnagain’s president, Jason Davis, did not return a call or email for this story. But in a Feb. 16 letter to the borough, Davis said the company had decided to sell the steel “as a result of the Assembly’s harsh criticisms and assertions that Turnagain should not have procured the piling.”
Davis doubled-down on those statements during a Feb. 27 assembly meeting.
“You know I’ve heard a lot of very disparaging comments that Turnagain has an agenda for a megadock,” he said. “We’ve only done what we proposed we were going to do and what we were authorized to do… decide what you want us to do and either allow us to continue on, redirect us or terminate us.”
Mayor Tom Morphet said the memo was mixed news for the borough. He said city leaders already knew that Turnagain’s steel purchase was problematic and the decision was not a surprise.
But Morphet called the news about the potential to miss deadlines for environmental assessments “worrisome.” He said it came as a surprise to the borough, which has been waiting on an environmental assessment from the federal government to undertake Turnagain’s design. The design would entail surrounding the existing dock, which is eroding, with steel walls, in a process called encapsulation.
“We received no information from our consultants that there was any problem meeting our deadline with the encapsulation,” said Morphet, who spoke on the phone with Bohnet, Kreitzer and others on Friday.
The federal government, through the Maritime Administration (MARAD) of the Transportation Department, is funding $20 million of the project. That grant has a deadline of Sept. 30 to complete environmental reviews.
But based on an environmental assessment, the borough could be required to complete a more comprehensive environmental impact statement (EIS), which could take years, potentially blowing past the Sept. 30 deadline.
Borough manager Annette Kreitzer said she didn’t believe there was a risk of not meeting the deadline unless the assembly decides to change the design of the project. She said a draft environmental assessment had been delayed when Chilkat Indian Village, the tribe in Klukwan, asked for an extension for tribal consultation for the National Historic Preservation Act.
She said in a Monday memo to the assembly that she expected the environmental assessment to be ready within the next week, though it’s not clear if CIV’s concerns have been resolved. Kreitzer said the borough requested to be a party to the tribe’s talks with the federal government – which center on a review of historic preservation issues required of federal agencies when making project decisions, but the tribe denied the request.
Kreitzer has repeatedly warned assembly members against changing the design of the project, an idea some members previously floated to reduce financial and environmental risks.
“With a ‘challenging’ timeline already under the current design, there is not time to submit a different design,” she wrote to assembly members in the Monday memo.
Assembly member Natalie Dawson said she wasn’t convinced by the manager’s assessment. She said it isn’t clear whether the borough will meet the deadline with its current design.
She also said the manager is keeping the assembly in “crisis mode,” forcing it to make important decisions about the project on a tight timeline.
“Nobody makes a good decision in crisis mode,” she said.
Dawson said she intends to bring up questions about whether the borough should continue the project with the current contractor now that it has broken federal rules. She also sees the possibility of scrapping the entire project — including the $20 million grant — and restarting the process with a more “robust” public process.
“There is no rush,” she said. “This is an opportunity to reevaluate the entire project and figure out what is best for the community. That may mean that we start over.”
The assembly spent hours taking public comment and talking about the latest news on the Lutak Dock project on Tuesday.
Ultimately city leaders decided to:
Additional reporting by Rashah McChesney