Cruise ship group: City’s statue plans are misuse of fees

By Rashah McChesney The Associated Press

JUNEAU, Alaska — A life-sized whale statue has Juneau in hot water after a cruise ship association alleged it’s a symbol of the Alaska city’s misuse of millions in fees paid by visitors.
The Cruise Lines International Association and its Alaska affiliate filed a lawsuit against the city and borough of Juneau on Tuesday in federal court in Anchorage. They’re challenging the legality of so-called head tax fees paid by cruise passengers who visit the state’s picturesque capital.
Cruise ships collect the fees and pass them on the city. Juneau gets a $5 entry fee per cruise ship passenger in addition to a per-passenger port development fee of $3.
The association estimates it has given Juneau more than $35 million in entry fees in the past four years.
The group represents 12 cruise lines, including Carnival, Holland America and Disney. They contend the city has used portions of those fees on projects that do not directly benefit cruise ship passengers and therefore violate federal restrictions on entry fee taxes.
Juneau City Manager Kim Kiefer said the city administration is surprised by the lawsuit.
“We have a long history of using these fees in what we believe are legal, responsible ways to be used to manage our tourism industry,” said Kiefer, who is listed in the lawsuit.
The city of 32,000 is trying to create a supportive, welcoming visitor industry, she said.
“We want to make sure that we facilitate a safe and effective way to do that.”
Kiefer added the city has a public process that involves consulting with the cruise industry for each of the projects it proposes to carry out with the funds.
Listed among the association’s complaints is the $10 million price tag on plans for a nearly 50-foot whale sculpture set in an infinity pool, along with upgrades to the city’s waterfront. The project is more than a mile from the cruise dock.
The lawsuit also lists $22 million spent on government operating expenses, $2 million for city bus services and $447,000 for upgrades to a private dock that cruise ship vessels and passengers are not able to use.
Juneau is in the southeast panhandle of Alaska. It is not on the state’s road system and is reachable only by boat or plane. The city’s easy access to whale-watching, glacier views and hiking has made it a tourism hot spot in the state. Juneau’s Convention and Visitors Bureau estimates that 1 million cruise ship passengers will visit in 2016.
Lawsuits over head tax fees are rare in the U.S., though passengers have sued over the amount of fees levied against them by cruise lines. That’s because while most ports charge a fee, they don’t use the money for non-cruise related projects, said Alaska’s association president John Binkley.
“The Constitution allows you to charge a fee, but it has to be used in conjunction with that vessel,” Binkley said. “You can’t take the money and use it for city operations.”
After consulting with the national association’s lawyers, Binkley said to his knowledge, Juneau’s alleged misuse of the funds is unique among the ports its cruise lines visit.
The lawsuit also names the mayor and finance director.