Anchorage settles 12-year port lawsuit for $191.3 million, all funds go to modernization

The Municipality of Anchorage and the U.S. Maritime Administration settled a 12-year lawsuit Tuesday, with the U.S. paying $180 million to the city. Combined with a prior judgment of roughly $11.3 million, the total reaches $191.3 million, with every dollar committed to Port of Alaska modernization construction. Mayor Suzanne LaFrance called it the largest settlement in the municipality's history and said the money goes straight to work, not legal fees or reserves.

"It's the largest settlement in the municipality's history," LaFrance said. "Every single dollar of this funding will go directly toward construction costs for the Port of Alaska modernization program."

The port supplies roughly 90 percent of Alaskans with food, fuel, and consumer goods. Its modernization program, estimated at roughly $2.7 billion, aims to replace aging docks before they fail. The settlement provides a major share of that funding and reduces how much of the cost falls on port users through shipping surcharges.

LaFrance said every federal or state dollar secured for construction cuts future shipping surcharges by about $2.50. Combined with $25 million in state funds and $61.5 million in federal grants already in hand, she said the settlement leaves Alaskans protected from significant future costs. "We are effectively protecting Alaskans from as much as $694 million in future surcharges on food, goods, and everyday supplies," she said.

How the Dispute Began

The dispute traces to a 2003 agreement in which MARAD acted as the municipality's agent for a port expansion. The work did not meet code. Litigation began in 2014. The Federal Circuit awarded Anchorage $367,446,809 in damages, but the case continued, ultimately leading to the negotiated settlement announced Tuesday.

Port users and shippers have long argued that because MARAD administered the defective project, federal funding should cover a larger share of the $2.7 billion modernization cost rather than leaving elevated surcharges to port users for decades. The settlement addresses that concern in part but does not eliminate the surcharge structure entirely.

Federal and State Officials Weigh In

U.S. Sen. Dan Sullivan said he pushed federal officials directly to end the standoff. "We have won, and the federal government shouldn't just be dragging its feet," Sullivan said. "Enough is enough." Sullivan said he pressed the Maritime Administration director, the secretary of transportation, and Attorney General Todd Blanch to close the case.

Governor credited his general counsel, , with leveraging relationships in Washington to move negotiations forward. "Steve used a lot of his good relationships with the Trump administration to be able to explain really what was happening here with the port," Dunleavy said.