The Matanuska Borough discussed its plan for a private firm to take over operations of the borough’s Port MacKenzie under a public-private partnership, borough manager Mike Brown told the borough assembly at its Tuesday, May 3 meeting.

The identity of the company cannot be disclosed in public because talks are at a preliminary stage. Brown said he hopes to have a potential agreement brought to the assembly this summer.

The idea so far is for the borough to retain ownership of the port so as to remain eligible for federal infrastructure funds that cannot go to a private entity, but also to develop a contract with the private party to create incentives for development of the port.

Port MacKenzie sees regular barge traffic during summer but has not seen a large deep-draft vessel call for several years, although a cement ship is scheduled to be at the port this summer, Brown said.

Port MacKenzie was conceived years ago as a bulk commodities port to accommodate loading of timber and commodities like coal. It was never intended to be a general freight port like the Port of Alaska, which is across Knik Arm from Port MacKenzie.

Despite its long-term potential the natural resource developers who could have used the port never developed. There were attempts to develop beetle-killed timber for export but by the timber harvesting was arranged the wood had deteriorated beyond the point where it could be sold.

There were also hopes Usibelli Mines could use the port for coal exports from its mine near Healy, as using Port MacKenzie would reduce the need to haul coal by train to Seward, but Usibelli’s export contracts ended years ago.

The port still has potential including for a bulk fuels terminal which is proposed by a private company, but the inability to secure funds so far to complete a half-completed rail link to the Alaska Railroad mainline track has limited access to and from the port for potential customers.

Part of the proposal will include designating the port as an “economic development zone,” that will allow different incentives to be applied, such as deferral of property taxes and lease fees. The borough may also seek state legislation to allow deferral of state corporate income tax as an incentive, Brown told the assembly.

The overall purpose is to stimulate economic activity to create jobs, with less of an emphasis for the port as a source of general revenues for the borough, Brown said.

In addition, the potential installation of a tidal power generation unit at Point MacKenzie, which is near the port, creates the potential for a power “micro-grid” to power functions at the port like a corrosion-protection system as well as, potentially, to support other operations.

Currently there is no natural gas service to Port MacKenzie, and securing affordable power is a challenge for developers locating there, Brown said. Tidal power through a project being considered by Ocean Renewable Resources Corp. could a source of lower-cost energy. Brown also said he is in discussions with Enstar Natural Gas over the possibility of extending gas service to the port.

A more immediate decision the borough, and the potential private partner, face is on a $7.6 million federal grant for port improvements that will require a $1.9 million local match from the borough.

The money is intended to be used to reinforce piling on the dock that serves deep-draft vessels but part of it could be used to develop a “roll-on, roll-off” capability at the port, which is needed to diversify the types of customers that can be served, Brown told the assembly.

Improvements could also include a mobile harbor crane to give the port capabilities it does not now have. Repairing corrosion on the piles could take place over the next three to five years.

Brown also said the borough is continuing its effort to sell an unneeded conveyor system built to handle loading of bulk products like timber. There have been about 30 inquiries so far to a solicitation to sell and one site visit from a potential buyer, he said.

The solicitation of offers on the conveyor closes in June, he said.

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