Assembly cancels manager's authority to sign lease with Shellfish Growers Cooperative after missing documentation

The Ketchikan Gateway Borough Assembly on Oct. 6 voted to cancel the manager's authority to sign a lease with the Shellfish Growers Cooperative for a portion of borough property at 8900 South Tongass Highway, after staff said the cooperative repeatedly failed to provide required documentation.

Assistant Borough Manager Cynna Smith summarized the history, telling the assembly the borough issued a request for proposals Feb. 28, 2025, and one proposal came from the Shellfish Growers Cooperative. Negotiations produced a draft lease presented to the assembly on July 7 and amended July 21. Smith said staff required additional information from the cooperative—financial statements, IRS 990 forms, and formal acknowledgments of required materials—and set a September 30 deadline. "Since publication of the packet for tonight's meeting, the shellfish growers has submitted multiple emails with miscellaneous documents attached, none of which addresses the outstanding information," Smith said, and staff therefore recommended cancellation of the manager's authority to sign the lease.

Why it matters: Staff said the cooperative's outstanding documentation blocked the borough from negotiating in good faith with other potential users of the property. The parcel includes uplands adjacent to a breakwater and potential seasonal-dock uses; staff said unresolved questions about scope and use impede parallel negotiations.

What the assembly decided: Assembly Member Palmer moved and Assembly Member Bailey seconded the motion to cancel the manager's authorization to sign the lease. The assembly debated the timeline and the type of documentation requested. Smith and other staff said the requested documents are the same materials lenders and state agencies typically require. The motion passed; staff said the cooperative may resubmit a complete application in the future.

Requested documentation: Staff said they were seeking business financial statements (balance sheet, income statement, cash flows), a pro forma for the hatchery project, IRS filings (the cooperative indicated it could provide IRS forms but the borough had not yet received them), proof of signatory authority for the cooperative's president (received Sept. 12), and an insurance quote (provided and accepted as sufficient for now because a lease had not yet been executed). Staff recommended cancellation after multiple follow-up letters dated Aug. 8, Sept. 11 and Sept. 17 and a final notice on Oct. 1 flagged the failure to meet the Sept. 30 deadline.

Assembly comment and outcome: Supporters of cancellation said staff and the assembly had allowed ample time and assistance, including referrals to Grow Ketchikan for help preparing financial information, but the cooperative did not supply documentation that would permit the borough to proceed. Assembly Member Palmer said the process had continued too long without a full packet of documentation and the borough should open the property for other interested parties. The motion passed; the assembly recorded the item as adopted.

Clarifying details: The RFP for the property was issued Feb. 28, 2025, with the first review April 1; a draft lease was presented July 7 and amended July 21; staff set a September 11 deadline and later extended to September 30; staff received proof of the president's authority to sign on Sept. 12; staff said the cooperative provided an insurance quote but did not supply full financial statements or IRS 990s by the deadline. Staff advised that if the assembly cancels authority the cooperative may reapply with a complete package.

Ending: The assembly's cancellation frees staff to consider other proposals for the property; the Shellfish Growers Cooperative may resubmit documentation for future consideration.