Alaska Invests $135M in Seward Cruise Dock Upgrade Without State Funds

Governor Mike Dunleavy of Alaska has signed House Bill 65, enabling the Alaska Railroad Corporation (ARRC) to issue up to $135 million in revenue bonds for constructing a new passenger dock and terminal facility in Seward. This move represents a landmark upgrade to Seward’s aging cruise infrastructure and highlights the state’s goal of expanding tourism without using state funds.

Seward's Aging Dock to Be Replaced

The current passenger dock and terminal in Seward, originally built in the 1960s, are nearing the end of their operational life. A study conducted in 2023 detailed extensive structural damage that could eventually lead to failure. Despite these issues, the port remains vital to Alaska’s cruise sector, welcoming over 205,000 passengers in 2024. By replacing and modernizing the dock, officials aim to preserve Seward’s status as a premier entry point to Alaska’s interior.

Key Features of the New Terminal

The planned facility will include a modern floating barge dock designed as a double-berth pier. Measuring 748 feet in length and 100 feet in width, it will accommodate Royal Caribbean’s Quantum-class cruise ships, which can carry up to 4,100 passengers per voyage. The terminal will also be open to other cruise lines, ensuring broader industry access. Construction is scheduled for completion by the 2026 summer cruise season, with the existing dock remaining operational through 2025 before being demolished later that year.

Revenue Bonds and Financing Model

Under House Bill 65, ARRC can issue bonds solely backed by project revenue—no state money will be spent. The financing structure aligns with a 30-year agreement with Royal Caribbean Group, guaranteeing a minimum of 140,000 cruise passengers annually. A port improvement fee, to be paid by passengers, will fund the bond repayment, though the exact fee amount has not yet been disclosed.

Governor Dunleavy emphasized the program’s significance, stating, “The new cruise ship dock in Seward demonstrates how the state can foster economic growth without impacting state finances.”

Economic and Tourism Benefits

Cruise tourism in Alaska has grown substantially, with passenger numbers increasing from 878,000 in 2010 to 1.719 million in 2024. Aside from accommodating larger vessels, the new Seward terminal will feature event and storage spaces, supporting year-round use. Bill O’Leary, President and CEO of Alaska Railroad, noted, “We’re excited to advance this needed infrastructure with the strong support of the Governor, the Legislature, and the City of Seward.”

Broader Impacts on Alaska's Cruise Tourism

Seward’s planned improvements spotlight a statewide trend. Other Alaska ports like Juneau are addressing overcrowding, shown by Juneau’s plan to open new terminal facilities on Douglas Island—funded by Goldbelt Inc. and Royal Caribbean Group—by 2027. Collectively, these developments aim to ensure the state can keep pace with rising passenger volumes while refining overall tourism infrastructure.

This commitment to infrastructure improvements signals significant long-term benefits, both for Seward and for Alaska as a whole.

Frequently Asked Questions (FAQs)

What is House Bill 65?

House Bill 65 expands the Alaska Railroad Corporation’s authority to issue up to $135 million in revenue bonds, specifically for financing the new Seward cruise dock and terminal facility.

How will the new Seward dock be funded?

The project will not utilize state funds. Instead, revenue bonds are secured by a 30-year agreement with Royal Caribbean Group, under which a port improvement fee paid by cruise passengers will cover debt repayment.

Why is Seward’s current dock being replaced?

Originally built in the 1960s, the existing structure is deteriorating and at risk of eventual failure. Modernizing the dock ensures Seward can maintain its role as a major Alaskan cruise port.

When will the new dock open?

Construction is expected to finish ahead of the summer 2026 cruise season. The current dock will keep running through 2025 before demolition and replacement commence.

Will the new dock accommodate all cruise lines?

While the 30-year agreement guarantees passenger volumes from Royal Caribbean Group, the facility will also welcome other cruise lines looking to berth in Seward.