A Lutak Dock deal once suspected by the borough manager to be a bad faith offer is now being described as the product of steel price inflation that could impact other potential dock designs — even though that steel price shock hasn’t been felt elsewhere in Southeast.  

Despite general agreement on the need to make progress on the dock project, none has been made, at least in the public eye, since once-promising negotiations this summer turned sour. That was back in June, when, after the borough thought it had agreed on a new, reduced dock design with Turnagain, the contractor further downsized the offer before an agreement was officially signed. 

The result was a dock design bearing the same price-tag as agreed on in 2023 but with only a fraction of the functionality. For roughly $25 million, Turnagain promised four rebuilt dock “cells” — sections of the dock — instead of the original 10. Other key features of the original design were removed as well, including a system for protecting the dock from corrosion. 

Turnagain’s proposal was widely panned and rejected by borough officials, with both Fullerton and harbormaster Henry Pollan calling it too small to be functional. In fact, Turnagain promised so little for the price tag that Fullerton, after receiving the offer, told the borough assembly she suspected that it was a “walk-away ”: an intentionally poor offer to signal the contractor no longer wanted to build the dock.

But in an interview this week, Fullerton called that an “emotional response.” 

“I thought we had a deal, and the fact that (Turnagain President) Jason Davis handed it to someone else to convey an offer rather than handing it to me himself, I think a little bit of that (contributed),” Fullerton said. 

Now, Fullerton believes that the offer was not intentionally poor, but rather the contractor responding to steel price inflation. 

“What’s been explained to me is it’s not only steel prices, but the tariffs on other countries like China are so high that everybody is buying American steel now… so that drives the price up, and also the wait times,” Fullerton said. The dock project, by law, can only use domestic steel because of its federal grant funding. 

If the large change in what the borough can get for its money is due to global market forces, and not Turnagain specifically, it could be trouble as the borough considers going to other contractors or designs for better value. 

When asked if she expected other potential dock designs to have the same steel inflation priced in, Fullerton said yes, as long as they use significant amounts of steel.

This description, however, of a massive steel price shock doesn’t seem to have been felt elsewhere in the state. 

At the Juneau office of engineering firm Respec, principal engineer Doug Murray said he hasn’t seen a large spike in steel prices in the past year, and has not had to significantly reconsider project costs. The real jump in materials costs, he said, happened from 2021-2023.

“We haven’t seen a significant increase, though there is still uncertainty about how the tariffs are going to play out,” Murray said.

Principal architect Zane Jones of Juneau firm MRV Architects said his firm “typically (uses) a yearly escalation price around 3%.” Currently, Jones said, they’ve increased that figure to around 5%. Steel prices have been included in that bump, having been elevated and unpredictable since the start of the year, he said. But Jones echoed Murray, saying that   materials-cost inflation hasn’t been as significant as in 2021, 2022, and even 2023. 

Those assessments match government and industry data for hot-rolled steel prices, which have risen since the start of the year, but even so remain below price peaks from 2021-2023. 

And even during those post-COVID price peaks, comparable projects do not seem to have had the same downsizing as was seen in Turnagain’s most recent offer. In Cordova, the city rebuilt its municipal boat harbor from 2023 to 2024. That project, like the Lutak Dock rebuild, was funded by a $20 million federal RAISE grant and built by Turnagain. 

Cordova was indeed forced to rescope, cutting back on parts of the initial plan due to inflation, then-city special projects coordinator Collin Bronson said this week. The overall inflation included rising prices for steel, which Bronson referred to as a “huge input” for the project, including galvanized steel pile supporting new docks. 

But according to Bronson, the cut-backs were confined to non-essential parts of the project: for instance, some additional harbor berthing was taken out of the plan and some surfaces were finished with gravel instead of asphalt. Unlike the recent Lutak Dock offer, essential functions — in Cordova’s case the dock and seawall replacements, and construction of a drive-down dock — were not cut. 

“Inflation was our fiscal reality, so we navigated that, pulled out some elements, but kept the most important parts, within what we could afford,” Bronson said. 

Turnagain president Jason Davis did not respond to a request for comment this week on inflation and increased steel prices. Fullerton said that Davis has not responded to her attempts to contact him either, at least since the most recent contract offer. Fullerton also said Turnagain did not provide her with any specific figures on steel prices or steel usage outside of more general costs listed in the contract offer, which is publicly accessible on the borough website. 

“I think at that point we lost interest because (the offer) was so bad,” Fullerton said.

Nevertheless, Fullerton is operating under the assumption that construction costs have indeed risen as significantly as Turnagain says.

A potential clarifying point, a plan to ask the contractor directly whether the offer was a “walk away,” does not seem to have gone through. 

At the Aug. 12 assembly meeting, Fullerton, speaking about the new contract offer, said she had “contacted the borough attorney to ask (Turnagain) if this is a walk-away.”

When asked this week if the attorney had done so, Fullerton did not directly answer. 

“I know that (the borough attorney) was in contact, but part of the problem is, the original (Turnagain) lawyer is having his second back surgery, so it’s been handed over to someone else who doesn’t have a lot of history with it, so the communications are even longer than they were before,” Fullerton said.

The halting communication between the borough and Turnagain comes as many in the borough, including multiple borough officials, have suggested cutting ties with the company and putting the project out for bid again. However, it’s still not clear if, when, and how that might happen. 

The assembly has not taken any action on the issue since a late June vote authorizing negotiations on the preliminary five-cell dock agreement Turnagain later pulled out of. 

Fullerton said this week she is currently consulting with engineers on next steps — specifically whether the design and build components of the project should be re-bid on together, or separately. 

“We have to decide if we’re going back out to a complete design contract or if we’re going back out with a design-build again,” Fullerton said. “That’s the fundamental question that I don’t have an answer to right now.”

Fullerton would not say specifically who she was consulting with, describing it only as “various engineers that I built relationships with over past years.”

“I don’t really want to name anyone because I don’t want them to feel cornered,” she said. 

Fullerton does plan to put to assembly vote the decision of if, and how, to put the project out for rebid. As for a timeframe on when that might happen, Fullerton’s only response was, “yesterday.”

Editor’s note: In a previous version of this story, borough manager Alekka Fullerton is quoted saying that Turnagain Marine had not responded to her request for information about what gauge steel the company was recommending for purchase on the Lutak Dock project. This is incorrect, the company did respond to her. Fullerton later clarified that she forwarded Turnagain’s response to the borough’s owner-advisor R&M asking for the company’s recommendation and did not get a response from R&M.