Assembly approves 20-year lease to Shellfish Growers Cooperative for borough property at 8900 South Tongass Highway

The Ketchikan Gateway Borough Assembly voted unanimously July 21 to enter into a lease with the Shellfish Growers Cooperative for roughly 7,400 square feet of borough-owned land at 8900 South Tongass Highway.

The assembly approved a motion to enter into an agreement in substantially the same form as presented and adopted an amendment to set monthly rent at $740, with the rent to be adjusted for inflation over the lease term.

The action follows public comment from Paul Foos, president of the Shellfish Growers Cooperative of Ketchikan, who spoke to the assembly before debate and said the cooperative supports a 20-year term so long as renewal clauses remain in the lease. "Primarily, the lease would be 20 years and that's okay with us as long as there's renewal clauses, which there are," Foos said. He told the assembly the reduced land area in the draft lease meets the cooperative's needs and that the project requires seed availability to scale operations.

Why it matters: The lease is intended to enable a local mariculture operation that proponents say will produce seed and aquaculture jobs. Assembly members pressed the cooperative and staff on financial safeguards and whether the lease would cover borough costs; the assembly included a 24-month financing requirement and other conditions in the lease as part of the package.

Details and debate The assembly discussion focused on ensuring the borough recovered costs and on protections to avoid repeating what some members called previous favorable leases granted without sufficient safeguards. Assembly Member Thompson, who offered the rent amendment, said the $0.10-per-square-foot framing discussed earlier in the meeting was reasonable for a commercial operation and noted the borough must ensure leased properties contribute to required local revenues. "This is a commercial operation, and so I think it really should pay its own way," Thompson said.

Paul Foos said the cooperative is organized as a nonprofit and initially expected lower early-year revenue, but after clarification that the amendment equated to $740 a month he indicated the cooperative could incorporate that into its business model. "Well, then I'm not going to object to it. I think we're okay with that. We can build that into our model," Foos said after the amendment vote.

Vote and outcome - Amendment (set rent to $740/month, adjust for inflation): moved by Assembly Member Thompson, seconded by Assembly Member Palmer. Roll-call vote: 7 yes, 0 no; amendment passed. - Main motion as amended (enter into lease in substantially same form): final motion passed by roll call 7 yes, 0 no.

Key terms and clarifications - Lease term: 20 years with renewal clauses (stated by Paul Foos). - Leased area: approximately 7,400 square feet (assembly summary). - Monthly rent as amended: $740 per month; rent to be adjusted for inflation (CPI) over the lease term. - Financial safeguards included in the lease: 24-month financing requirement and adjustments to the borough valuation of the leased land (as captured in the assembly packet and staff responses). - Entity: Shellfish Growers Cooperative of Ketchikan (nonprofit cooperative).

Next steps Staff will finalize the lease documents consistent with the amended terms approved by the assembly and proceed with execution.