June 26th, 2025 by Ally Burdett

The $137 million Seward Passenger Dock project is expected to be completed by spring of 2026. The project aims to replace the current failing terminal foundation and will integrate advanced shore power capabilities.

The project is a collaboration between a mix of public-private parties: The Seward Company, Alaska Railroad Corporation, Turnagain Marine, and Royal Caribbean Group. The Seward Company is spearheading the project, with Turnagain Marine contracted to engineer and construct the dock and terminal. 

Plans progressed after the Alaska Legislature passed House Bill 65 on March 6 of this year, approving the Alaska Railroad to issue revenue bonds vital in funding the construction and purchase of the terminal and passenger dock. The Royal Caribbean Group also signed a 30-year Pier Usage Agreement, in which the “agreement grants Royal Caribbean preferential berthing rights” according to a press release by the Seward Company. 

In a statement made by Dunleavy’s office on March 6, 2025, the Royal Caribbean Group “guarantees a minimum of 140,000 guests annually” and cruise guests will be charged a “port improvement fee” that will fund these bonds, with “no impact to state finances.” Cruise ship passengers are also charged a “head tax” in which revenue generated goes to the City of Seward for certain projects. 

After completion, the Alaska Railroad will purchase the new dock and terminal from the Seward Company. 

This major infrastructure venture also comes with collaboration from the City of Seward. 

Kat Sorensen, Seward City Manager, said that one of the city’s main roles in the project was securing a $45.7 million grant from the Environmental Protection Agency (EPA) to install vessel shore power at the new terminal and transitioning the Port of Seward into a green port. This was announced as part of the Clean Ports Program, funded by the Inflation Reduction Act, back in October. 

The Seward Company has also committed to the matching funds for the shore power upgrades, meaning there will be no cost to the residents or electric ratepayers of the City of Seward for this project, Sorensen said. The project is estimated to cost $50.8 million. 

“This is really exciting…to be able to bring this to our community at no cost, and in the long run, see the benefits that it will bring.”

– Kat Sorensen, Seward City Manager

Not only will this upgrade work to reduce emissions as ships will now utilize electricity from the city’s grid instead of diesel, but the city also requested two Battery Energy Storage Systems (BESS) that store power and will help reduce any possibility of a brownout or lack of power. Sorensen also added that the BESS will benefit residents in the winter months when the city is not servicing cruise ships, as the energy stored can be a backup for residents if the power goes out. 

She added that having all the cruise ships plugged into the city’s grid will essentially double the megawatt usage in town, and the city can stabilize and potentially lower rates for the entire community.

The EPA grant is funded through the Inflation Reduction Act of 2022, enacted during the Biden-Harris Administration. Despite the current administration announcing in an Executive Order on January 20, 2025 that “all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022,” there has been no impact on funding so far. 

Among the shore power upgrades, the terminal will see modernized infrastructure, including a double-berth floating pier, a 41,500-square-foot cruise terminal for indoor functionality, and updated parking lots to enhance public safety and flow, according to the Seward Company. 

“One of the key aspects of the cruise ship terminal rebuild is a better transportation flow,” Sorensen said. “Smoothing that process will be beneficial to the community.”

Sorensen also added that the city is anticipating the development of Port Avenue in the near future to make transportation more efficient and safe. She expects conversations to begin this fall, drawing on data from the city’s Comprehensive Plan.