Council favors reopening lease with Seward Ship’s Drydock

Posted on: November 23, 2009 | musiclover | Comments Off | Print Article | Rate Post:

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Pruitt addresses council

By Heidi Zemach for SCN

The Seward City Council recently told City Manager Phillip Oates to proceed with negotiations with Seward Ship’s Drydock, Inc to determine specific capital improvements that the shipyard wants to make, and whether they are appropriate for a lease extension beyond its current 2029 expiration. The shipyards managers are seeking assurance that the lease with the city at the Seward Marine Industrial Center will be extended for a longer period in order to justify the expense of planned capital improvements; and to obtain financing for future projects, said Jim Pruitt, SSD president.

Since that Nov 10 special council work session, Oates forwarded the shipyard a list of difficult areas that the city has encountered in the past and asked SSD to respond to whether it would consider those as part of the process of reopening the lease. The city also asked the shipyard board for a detailed list of capital improvements they plan to make, their value, and their expectations for a lease extension.

The city and shipyard disagree over what constitutes an automatic lease extension. The council told Pruitt  they would like to re-open the lease in order to clarify the meaning of language regarding automatic lease extensions. The city believes that automatic lease extensions of one year plus five more are mandated in the lease agreement for each $100,000 in capital improvements that the shipyard makes. That, provided that the improvements are acceptable to the council. This provision was included in the agreement in order to enable the shipyard to obtain financing of future projects.

Seward Ship’s Drydock recently received a $1 million grant in Federal American Recovery and Reinvestment Act (ARRA) Maritime Administration Small Shipyards for ship transport cradles, 5,000 ton Syncro-Lift controls and compressed air upgrades. Pruitt wishes to supply $700,000 as the local share of these improvements. By his calculations, Pruitt divided the sum total into $100,000 amounts, and said each separate portion allows for another 6-year leaseextension, thus stretching lease beyond 2029.

Photo reminders of env damage

Not everyone in the community would like to see the shipyard’s lease extended. In fact some residents, including Carol Griswold and Tim McDonald, testified they would like to see the city get out of its lease agreement entirely. “This is a horror story for our grandchildren and I’m stunned that you’d even be considering this!” Griswold said. She held up blow-up photographs, obviously familiar to the council, taken at the site depicting environmental and health hazards that were brought to the city, DEP, EPA, and Coast Guard’s attention for years. “What is this costing the city for the past 20 years? It’s been hugely expensive, and that’s not counting the health effects,”  she said.

ADEC currently “is working with” Seward Ship’s Drydock for air quality compliance and possible ground contamination requirements, in response to complaints, Oates said. When you reopen a lease, you can address any areas of concern, including areas of environmental compliance, Oates said. But the city does not consider overseeing the shipyard’s environmental compliance as its role, he said. Their required compliance with environmental laws already is stipulated in the lease agreement.

The shipyard employs between 45-105 workers, depending upon the job—especially during the busy season September to June, according to recent figures provided by the late General Manager DJ Whitman. Shipyard payroll exceeds $2 million annually, and the company spends some $1.5 million per year on goods and services, he said. The shipyard provides maintenance and repair services to three U.S. Coast Guard cutters a year, on average. Clients range from fishing boat owners and transportation industry vessels to the U.S.CG and National Oceanic and Atmospheric Administration. (comments: heidizemach@yahoo.com)

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