Wrangell’s efforts to add to its downtown waterfront, develop the former 6-Mile Mill property for a possible shipyard and replace its leaking water diversion flume to the community reservoirs will receive a $43 million boost from the federal government.

The borough applied this past spring for a federal Economic Development Administration Industry Transformation Pathway Grant.

The official announcement is not expected until later this month, but Alaska Sen. Dan Sullivan, who is in a tight reelection race, delivered the news last week.

Sullivan, who is seeking a third term, was in Ketchikan for the annual Southeast Conference of municipal, business and community officials, when he gathered Wrangell borough officials to deliver the news on Sept. 29.

“I was told by senior officials at the Commerce Department (parent agency of the Economic Development Administration) that they intend to announce a major investment in Wrangell’s future,” the senator told borough officials in a side meeting room at the conference.

“I told the secretary of Commerce I’m coming out there and want to make this announcement,” Sullivan said.

He said the Commerce Department will release the official news in a week or so.

“We’re so grateful as a community,” Borough Manager Mason Villarma said. 

“I dropped my phone,” Economic Development Director Kate Thomas said when she learned that the grant had been approved.

Villarma said the downtown waterfront project likely will start before the end of the year to add rock fill so that the property is ready for American Cruise Lines to install pilings and a floating dock in the spring for its ships to use next summer.

The waterfront work also will include extending the City Dock, but that will be separate from the immediate need to add fill for the new, smaller dock.

Design work on the large-scale redevelopment of the 6-Mile site is expected next year, with actual construction not until 2028, Villarma said.

Building a new flume to direct water into the reservoirs also needs final design and construction drawings before it can go to bid.

The federal grant would be combined with just over $10 million in borough funds to pay for the three projects.

The work at 6-Mile will include shoreline stabilization, utility extensions, roadways and power to the 42-acre site. The estimated cost totals $38.4 million, with $30.7 million from the federal grant and a borough match of $7.7 million, according to Wrangell’s grant application.

The plan is to prep the site while City Hall and JAG Marine Group, which operates shipyards in Ketchikan and Seward, go after state, federal and private funding to build a full-service shipbuilding and repair yard at the property.

“This is a generational investment for Wrangell,” Villarma said in a prepared statement issued late Friday, Oct. 2. He said the shipyard project would “position Wrangell as a modern maritime industrial hub serving commercial vessels, the U.S. Coast Guard, NOAA (National Oceanic and Atmospheric Administration) and military fleets.”

A consultant hired by the borough and JAG estimated a large-scale shipyard — with a lift capable of hoisting a 38,000-ton ship out of the water and a 560-foot-long assembly hall — could cost as much as $605 million to $726 million to build, targeting work contracts for U.S. Coast Guard, Navy and other federal vessels.

The project could be developed in stages, depending on funding and commitments to use the facility.

The Economic Development Administration grant does not cover any of the shipyard costs.

The borough bought the 6-Mile property for $2.5 million in 2022, looking to develop the site as a deepwater industrial port.

Alaska Marine Lines is planning to build a barge ramp at the north end of the property and relocate its freight operations from the downtown waterfront to the site. Tideline Construction is based at the south end of the property, including its scrap metal recycling operations.

Worker housing would be an issue if a shipyard went in at 6-Mile. Villarma and Thomas both spoke with Sullivan about the borough’s continuing work with the Alaska Mental Health Trust Authority Land Office for the state agency to possibly develop property it owns near 6-Mile for residential use.

In addition to adding fill along Outer Drive, the downtown waterfront project will include an expansion of the work area at the Marine Service Center, which is short of space for the growing business of servicing commercial and recreational boats.

The plans also include developing the new fill area for commercial and community use, and adding a floating extension and a new mooring dolphin to the City Dock to increase its versatility for ships to offload passengers at high and low tides. 

The waterfront work is estimated at $12.6 million, with $10.05 million from the federal grant and $2.51 million from the borough.

Replacing the dilapidated and leaking wood flume that directs water into the town’s reservoirs with a new concrete flume is estimated at $1.99 million.

The project “addresses one of Wrangell’s most critical underlying constraints — water reliability,” Villarma told the assembly this summer. The existing flume poses a risk during peak demand periods and limits the borough’s ability to expand industrial and residential capacity, he explained.