Port of Alaska secures $50 million federal grant for new cargo terminal

The Don Young Port of Alaska has secured a $50 million federal grant from the U.S. Department of Transportation’s Maritime Administration for the port’s ongoing modernization program.

The massive project will replace both cargo terminals and update its shipping infrastructure. The port, with badly corroded pilings and aging docks, is at risk of failure, particularly in the event of a large earthquake. The entire modernization program is estimated to cost $1.7 billion or more.

The federal grant will be spent primarily on demolishing and rebuilding a new cargo terminal, Anchorage Mayor Suzanne LaFrance told reporters Friday.

While this latest federal grant is small in comparison to the project’s price tag, it represents the third-largest port infrastructure grant awarded nationwide this year by the Maritime Administration, said Bill Falsey, LaFrance’s chief administrative officer.

The grant also unlocks another about $23.7 million in state funding that remains from $100 million awarded to the city in 2022, but which requires a matching amount of federal dollars.

To date, the port has secured more than $500 million in federal and state grants to help pay for the project, Falsey said.

Other funding will come through low-interest loans and bond sales, Falsey said.

Earlier this month, the Anchorage Assembly approved up to $180 million in bonds to help fund the modernization program’s next phase, construction of cargo terminal one. The Assembly also approved an expanded design for the terminals.

Those bonds will be repaid through a surcharge, which could result in small price increases for many goods.

Falsey said the city aims to keep surcharges as low as possible and to use the “cheapest source of funds first.” It will soon make public a revised and expanded plan of finance, he said.

On Friday, city officials stressed the port’s role as a critical piece of the state’s infrastructure.

“It supports more than $14 billion in commercial activity and serves 90% of our state’s population,” LaFrance said. “For Alaskans, it is our lifeline to the outside world.”

It is also important to the nation’s security as one of 18 Department of Defense designated strategic ports, she said.

The port’s failure would have “severe” economic consequences, Municipal Manager Becky Windt Pearson said. It would cost about $39 million a week to make up the port’s capacity through air and truck cargo, she said.

A new petroleum and cement terminal and an administrative building have already been built, and the first phase of work to stabilize the port’s north end is almost finished, officials said.

The full modernization program is scheduled to take through 2032.

Then, “you’re going to see a facility designed with a 70-year lifespan that is state-of-the-industry and capable of handling any kind of cargo vessel that is sent here from anywhere,” Port Director Steve Ribuffo said.

The port can no longer handle the same operational load levels that it did when it was built in 1961, Ribuffo said.

“But it hasn’t degraded to the point where we have to start getting creative about (how) cargo gets offloaded,” Ribuffo said. “Are approaching that? Yes. Are we concerned about that? You bet. And the faster we can get at least one new cargo dock online, the less concerned we’re going to be.”

Work to build the first new cargo terminal had been scheduled to begin next year. But after the city received no bids this fall from construction companies, that work will be delayed until 2026, Windt Pearson said.

It’s “a race against the clock,” Ribuffo said, “but so far, we’re on a pace to pull it off.”