We conducted a feasibility study for a proposed harbor in Valdez, Alaska, which would address crowding in the existing harbor and a long wait list for space. We used a life cycle cost analysis approach to determine the annualized cost of the new facilities and estimated potential moorage and non-moorage revenues that could be generated by the facility, based on the existing harbor rate structure. The analysis found that a subsidy would be required to operate and maintain the harbor. In order to help the City of Valdez make a decision about what level of subsidy would be acceptable and whether it would need to change its rate structure, we conducted an economic impact analysis using the Harbor Economic Impact Model, a model that we developed under contract with the State of Alaska. The analysis showed sufficient local and regional economic activity from harbor operations to justify the annual subsidy. We also conducted a market analysis, focused on five target markets for the harbor and evaluating competing harbors in the region to identify Valdez Harbor’s competitive advantages and justify demand for the new harbor. Following our work, the City of Valdez decided to move forward with the new harbor under the current rate structure and harbor construction began in 2015. This work took place in 2012–2014.
