Assembly declines to open formal negotiations for proposed shellfish lease at 8.9 miles South Tongass

The Ketchikan Gateway Borough Assembly on Dec. 1 rejected a motion to direct staff to enter negotiations on a proposed lease for borough property at 8.9 miles South Tongass that would host mariculture operations by the Shellfish Growers Cooperative.

Applicant "Mr. Fuse," who addressed the assembly during citizen comments and again during the hearing, urged the assembly to reauthorize a lease so his organization could file a loan application with the state Division of Investments. Fuse told the assembly he has prepared detailed cost‑recovery projections and, he said, Division of Investments staff ‘‘okayed’’ an increase tied to tariff‑driven cost pressure and the loan committee process could take four to six weeks.

Economic‑development staff, however, told the assembly the package before them lacked the documentation required to evaluate the lease and the Mariculture Revolving Loan application. Peter Amelon, economic development manager, told the assembly that the borough requested five years of projected profit‑and‑loss statements as part of the Division of Investments application; the materials provided contained only year‑one projections and other requested items remained outstanding.

Assembly debate focused on two tensions. Several members emphasized economic development potential for mariculture and the borough’s prior investment to prepare the site; others echoed staff concerns about organizational maturity and missing financial and site documentation. Councilmember Bowling said the shellfish group had "been driving the train and has not been willing to put any coal in the engine," citing repeated requests for documentation that remained unmet. Fuse responded that a letter of intent, board resolution authorizing loan pursuit, and additional materials could be provided and that the project would be privately financed through the Division of Investments; he said the group was not asking the borough for funding.

The motion to open negotiations, moved by Assemblymember Thompson and seconded by Assemblymember Ortiz, failed after roll‑call voting. Because the motion failed the assembly did not direct staff to begin lease negotiations; members asked staff to continue pursuing other interested parties and to evaluate alternative public‑purpose uses for the property.

What’s next: Staff indicated there are alternate proposals interested in tidelands access and said it has held other offers pending resolution of this request. The assembly did not adopt any lease terms or enter any binding agreement on the property.

Quote: ‘‘We are prepared to move forward,’’ Mr. Fuse told the assembly, ‘‘and if you reauthorize this lease, we're prepared to move forward’’; staff countered it has repeatedly asked for specific financial projections and site documentation required to recommend leasing borough property.