State allows ferry Malaspina to deteriorate, then celebrates by selling it for a song to supporters of Gov. Mike Dunleavy
The Dunleavy administration took the ferry Malaspina out of service two-and-a-half years ago.
The ferry, built in 1963, needed at least $16 million in steel work and Gov. Mike Dunleavy refused to seek funds from the Legislature or maintain the vessel. To no one’s surprise, the deterioration got worse when the state mothballed the ship.
The state has now sold the Malaspina to political supporters of Dunleavy for $128,250. The pattern of neglect that led to this situation needs to be examined as Alaska prepares for the gubernatorial election in November.
The Dunleavy administration concocted this bonehead press release that treats the debacle as good management of state resources. The head of the ferry system even boasts about how much the state has learned about disposing of ships.
Sidelining the Malaspina was in keeping with Dunleavy’s efforts to dismantle the ferry system that began immediately after his election in 2018.
Before the election, Dunleavy told the Ketchikan Daily News, “There is no plan to hack, cut or destroy the marine highway system.”
After the election, he began to hack, cut and destroy the ferry system.
He stood silently by as Donna Arduin, his budget mastermind, complained about the cost of moving cars on highways compared to ferries, never correcting her to mention the lack of highways in most places served by the ferry system.
Dunleavy and Arduin talked of selling ferries, abandoning routes, reducing the number of sailings and cutting the budget by 75 percent.
By the fall of 2019, Arduin was gone and Dunleavy was on the run from the recall, but he went ahead with the plan to park the Malaspina and reduce ferry service.
The state docked the ferry at a private dock 7 miles north of Ketchikan, owned by the Ward Cove group, paying $402,084 a year for storage. With insurance and other costs, the state was paying $75,000 a month for the decaying ship, according to a report by CoastAlaska.
The Ward Cove Group, which contracts with the state to hold mothballed vessels, is owned by the Spokely family in Ketchikan. The Ward Cove Dock Group, which is developing the property, is owned by David and Andrew Spokely of Ketchikan and the Binkley family of Fairbanks. Each family owns half of the enterprise.
“We want to incorporate the history of what the pulp mill meant to the region and redevelop it as a new economic center that’s focusing on the major growing industry in southern Southeast, which is tourism,” Ryan Binkley, owner of the Anchorage Daily News, said in 2019.
The group is developing a $50 million project at Ward Cove with Norwegian Cruise Lines that the cruise ship giant hopes will be a Southeast mainstay for at least 30 years.
David Spokely led a group that crowned Dunleavy and Lt. Gov. Kevin Meyer the “Alaska Dream Team,” while John Binkley announced plans in early 2020 to start his own group opposing Dunleavy’s recall.
You start your own group opposing the recall, when an established anti-recall group already exists, to curry favor with the target of the recall and to distance yourself from whatever the Anchorage Daily News might publish that could irritate Dunleavy.
The close cooperation of the Dunleavy administration has been critical to the Ward Cove Dock Group project to take an EPA Superfund site, former home of the Ketchikan Pulp Co. mill, and make it a major tourist attraction. The site remains on the EPA superfund list, though Norwegian Cruise Lines suggests to customers that the pollution is all in the past.
One sign of that close cooperation with the Dunleavy administration is this bizarre proclamation issued by the state Department of Environmental Conservation praising Spokely and Binkley for the Ward Cove Dock project and what they did to get past the “stigma” of the Superfund designation.
Three months after the state sidelined the Malaspina, Rep. Louise Stutes told CoastAlaska, the Southeast news consortium, that it appeared the Dunleavy administration had written off the Malaspina.
“Clearly they have no intent of running that vessel again,” Stutes said in early 2020.
“It’s inconceivable to see the dereliction that has occurred in the maintenance of these vessels and I don’t know how to refer to it in any other capacity. That captains are frustrated. The engineers are frustrated. The crews are frustrated. They’re abandoning ship. Literally.”
CoastAlaska has provided the best reporting on the Malaspina, mainly the work of Jacob Resneck, who has since left Alaska for a job in Wisconsin.
Resneck reported a year ago on June 22, 2021 “that the decision to do a cold layup went against the advice of union engineers who said without a regular maintenance crew the ship would deteriorate. Freezing temperatures led to some minor flooding in staterooms and a fact-finding tour by coastal lawmakers and aides reported it was clear there was no intention of the ship being used again.”
Meadow Bailey, then a public relations employee of the transportation department, denied that a decision had been made on the future of the Malaspina and said, “if the vessel is needed in the future it can be returned to service.”
But the state was not keeping the Malaspina shipshape for a possible return to service.
On June 1, 2022, the Dunleavy administration finally admitted that there had never been a plan to repair the Malaspina or operate it again.
The Dunleavy administration now says, contradicting previous claims, that it parked the ship in 2019 “when it became clear she would not sail again for AMHS due to the cost of repairs and the advanced age of the ship.”
It’s not clear when the state decided that it wanted to give the ship away, but on May 20, 2021, Dunleavy said the Philippines could have it for free, as CoastAlaska reported at the time.
“This vessel is surplus to our fleet, is in need of some repairs, but does have some service life left,” Dunleavy wrote. “We would be willing to provide the vessel to the Philippine government or to a private ferry company in the Philippines free of charge.”
The Philippines did not take up Dunleavy on the offer.
In February this year, the Dunleavy administration said it had received an offer from an unnamed U.S. company for the ship and solicited letters of interest from others. It received four letters.
The administration chose to sell the ferry to a Spokely-Binkley LLC owned by the Ward Cove Dock Group, the 50/50 partnership between the Spokely and the Binkley family.
John Binkley’s letter of interest offering to buy the Malaspina highlighted the idea that it would be a way to preserve the history of the marine highway system. He said they would like to create a museum on the ship.
Binkley did not mention using the ship as employee housing and for housing the employees of other companies, but said they would look for “additional ways” to generate revenue.
On March 14, the state said it had started negotiations with the LLC owned by the Ward Cove Dock Group and stressed the plan to make the ship a museum and showcase history, never suggesting it was to be used for housing workers.
The resulting news coverage said the Malaspina could be reborn as a museum for the Alaska Marine Highway System.
On June 1, the state announced that it had sold the Malaspina to the Spokely-Binkley group for $128,250.
The state press release said the ship would become the “centerpiece of a historic park.” Something that had not been mentioned in the letter of interest topped the list of priorities—worker housing.
“Mr. Binkley’s vision of keeping the Malaspina as a historic centerpiece allows the beloved ship to stay in Alaska and serve a useful purpose as worker housing and a potential maritime museum, and hopefully a training platform for students working towards a career in the maritime industry,” the state said.
On Sunday, the Anchorage Daily News quoted John Binkley as saying that the 280 beds on the Malaspina could be a “small part” of providing a housing solution for Ketchikan.
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