Juneau Assembly Finance Committee votes 6-3 to end gondola project, repay Goldbelt

The City and Borough of Juneau Assembly Finance Committee voted 6-3 on April 1 to end the Eagle Crest gondola project and draft an ordinance to repay Goldbelt and terminate the revenue sharing agreement.

Project costs reached $9.4 million to date. Construction estimates rose from an initial $7 million to $27 million. The Goldbelt loan has grown to $12,045,000 with 7 percent interest compounding monthly at $70,000 per month.

Craig Dahl, special projects manager for the City and Borough of Juneau, presented a detailed analysis of the project's financial status. The city has spent $5.5 million on the gondola, the parts, and shipping, $438,000 in salaries and related expenses, and $2.3 million on engineering and design.

Additional costs loom if the project were to continue. A 50 percent tariff on steel imposed by the Trump administration would apply to the $1.86 million in parts from Austria, plus a fuel surcharge estimated between $16,000 and $20,000. Dahl said the city could avoid $946,000 in tariff-related costs if it does not ship the parts to the United States. The city also faces $173,000 still owed on refurbishment work and potential staging and storage costs.

Dahl said the project could generate revenue if completed, though his presentation framed those figures with significant conditions. Early-year net revenue projections to Eagle Crest ranged from about $3.7 million to $5 million annually after operating expenses, with some modeled scenarios rising to around $6 million in later years. The revenue model assumed an $85 wholesale price for cruise passengers and projected revenue from more than 1.7 million annual cruise ship visitors.

Assemblymember Neil Steininger said the project is profitable, citing the higher-end scenario Dahl presented showing net revenue to Eagle Crest of about $6 million a year in modeled years after operating expenses.

The committee faced a hard deadline. The revenue sharing agreement with Goldbelt required the city to deliver a working gondola system by May 2028. Dahl said construction season had already started. The city could not meet that deadline even if work began immediately. Missing the deadline would trigger repayment of the $10 million loan, which has grown to more than $12 million with interest.

City Manager Katie Kester said the city had met with Goldbelt leadership but was waiting for a formal response after Goldbelt's board meeting. She said Goldbelt had indicated the economic viability of Eagle Crest for them was tied to their West Douglas operation.

Kester recommended the committee consider directing staff to explore what paying off the loan and terminating the agreement would look like. She said the city would have approximately $3.2 million available from the $12.7 million in total project funding to apply toward the repayment. That would leave a net amount of $8.7 million to be found.

The committee debated whether to wait for more information before making a decision. Deputy Mayor Greg Smith said he wanted to see a refined price estimate from the construction manager and hear Goldbelt's response before voting to end the project.

Smith said the committee did not know what Goldbelt would say about renegotiating or doing the revenue sharing agreement. The committee did not have a refined price from the construction manager or general contractor. He said he was not ready to make this move at this time.

Mayor Beth Weldon proposed an amendment to ask the Eagle Crest board to continue searching for other investors. The amendment passed 8-1.

The main motion as amended directs staff to end the project, draft an ordinance repaying Goldbelt and ending the revenue sharing agreement, investigate non-cash compensation options, and ask the Eagle Crest board to continue searching for other project investors.

The motion as amended passed 6-3. Smith, Steininger, and Assemblymember Hall voted no.

The committee then voted 5-4 to direct staff to introduce the ordinance at a special meeting April 29, discuss it at a Committee of the Whole meeting May 4, and hold a public hearing May 18.

Kester said the city would work with the attorney to introduce an ordinance with a title broad enough to give the Assembly options. She noted that conversations with Goldbelt were still ongoing and the city needed to determine how to fund the termination.

Discussions about a gondola at Eagle Crest date back to before 2012. The Eagle Crest board adopted the gondola into their strategic goals in 2021. In 2022, the Assembly passed an ordinance authorizing $2 million toward purchase of a used gondola from Austria. The city entered into the revenue sharing agreement with Goldbelt in June 2023. Under that agreement, Goldbelt would share in ridership revenue once the gondola was operational. The city would repay Goldbelt's investment if it failed to deliver a working system by May 2028.

Dahl said the gondola design is 100 percent complete and ready for construction. The city owns gondola assets that could be sold or used by another investor.

The committee also directed the Eagle Crest board to present a different financial sustainability model and a revised budget with the normal $930,000 general fund subsidy. The board must present capital improvement investments and revenue-generating opportunities, including financing options, at a joint meeting with the Assembly no later than November 2026.