How did Carnival Cruise Lines get US taxpayers to buy them a $28 million train depot?

Our friends Harry and Michelle, former Alaskans, stayed with us a few days before catching a Princess Cruise to Vancouver yesterday. Yesterday morning I took Harry to the Ted Stevens Anchorage International Airport to return his rental car. We passed the Bill Sheffield Depot, which in 2004 won an American Institute of Architects Award.[Depot picture not my picture, from AKRailroad site]

Later we took them downtown to catch the bus to Whittier where they get on the cruise ship. Getting the tourists and their luggage from here to there is like an assembly line. I knew this already from taking other visiting friends to catch their buses to the cruise ships and from people who work for the cruise line.
You can get a sense of the enormity of the business from looking at all the luggage lined up at the hotel for just a few of one day's set of passengers.



But what got me thinking, and which you can't see completely on this picture, is the sign on the bus that says "Holland-America Tours" and the sign on the post to the right of Harry's head that says "Princess Tours." People had told me a lot of the cruises were all owned by the same company, so I started googling when I got home. Here's what I found.

The Princess Cruise Line, along with Holland America, is owned by Carnival, the largest cruise line company in the world, with a 2006 net profit of $2.279 billion In addition to Princess and Holland America, Carnival owns, as their website lists, "our brands:"

Carnival
Princess
Holland America
Cunard
Aida
Costa
P&O Cruises
Ocean Village
Seabourn
P&O Cruises Australia

Different financial sites lists their competitors as Royal Caribbean Cruises, the second largest, with 2006 net income of $633.9 million. The other two listed are TUI AG (a German firm) and Hong Kong based Star Cruises.

Alaskans heard a lot from the cruise industry prior to last fall's election because Ballot Measure 2 called for strict regulations of the cruise industry - including putting rangers on all the cruise ships to monitor them in Alaskan waters and requiring them to disclose the commission they get from Alaskan vendors they send passengers to. Despite a very expensive industry sponsored campaign against it, Ballot Measure 2 won. In this last legislative session there's been a lot of public concern because of legislative attempts to water down the new regulations. So, we aren't ignorant of the cruise industry and its influence. But I started thinking.

Back to the Bill Sheffield Depot at the airport. Anyone who asks a few questions knows that, despite the arguments when it was first proposed that supporters argued that it would help ease commuter traffic in Anchorage. The Alaska Railroad's 1998 Annual Report says about the Depot:

Anchorage International Airport
What It Is: A $28 million project to develop a state-of-the-art rail
station at the Anchorage International Airport. The station will be
the centerpiece of all passenger services development at the
Railroad, connecting Seward, Whittier and Girdwood, making
commuter services to Wasilla and Palmer a more viable option. (p.10)

In the Chairman's message it even gives a time estimate:

And by 2005, we hope to be
carrying commuters from the Matanuska-Susitna Valley and Girdwood into
Anchorage with safe, cost-effective, environmentally friendly rail transit.(p. 1)

The originally arguments that this train spur would help Anchorage commuters was never too convincing since it only would go from the airport to downtown and that's not where most commuter traffic goes. There's nothing here about cruise lines, yet today, in May 2007 the only people who ever use the airport depot to get on or off a train are cruise ship passengers.

While googling I found out that on May 7 of this year, Anchorage Daily News published a letter from a David McCargo of Anchorage:

"About a year ago I called Ted Stevens Anchorage International Airport to inquire about scheduled train service to and from downtown Anchorage. The person who took my call was not even aware that there was a train station at the airport, which started me wondering why we spent almost $30 million to build one. My next call was to the Alaska Railroad, which was worse than trying to get through to an airline representative in Bangladesh. After considerable persistence, someone finally called back to say that the only way that I could get to the airport by train was to book a cruise from Vancouver."

I further found a Railways enthusiasts' website that had a page entitled "Lines with obscure passenger services" with this interesting tidbit:


"Anchorage, Airport Branch Junction, AK - Anchorage Ted Stevens International Airport US28
This spur line - approx. 2 miles long - is used only by chartered trains for various cruise companies (including Holland America, Princess, Carnival, Royal Celebrity and Radisson). On days when a relevant cruise vessel arrives at Seward, a train leaves there for the airport in the morning (journey time 4½ hours) and returns at about 1330 from the airport to Seward to connect into the vessel's evening departure. Tickets are obtainable only from the cruise line concerned. Reported: August 2005"

So how did the cruise lines, Holland America, Princess Lines, and Carnival principally, get this $28 million depot and train spur between downtown Anchorage, and the ports of Whittier and Seward to take their passengers directly to the Anchorage Airport? Rattling some old brain cells and working google leads to this narrative.

Bill Sheffield (for whom the Depot at the airport is named) owned Sheffield Enterprises, which eventually was a chain of 16 hotels in Alaska and the Yukon.
1982 - Sheffield is elected Governor of Alaska and serves until 1986
1987 - Sheffield sold Sheffield Enterprises to Holland America. His number two man at Sheffield Enterprises, Al Parish, eventually became a vice president of Holland America.
And from the Alaska Railroad website we get the following:
April 1995
Former Governor Bill Sheffield is appointed to the Board of Directors and elected chairman.
1997
Former Governor Bill Sheffield becomes CEO and President of the Alaska Railroad and John Binkley is named Chairman of the Board of Directors.
1997
Alaska Railroad develops a program of projects with plans to build new depots and docks, improve rail infrastructure and modernize through new technology.
2001
Former Governor Bill Sheffield retires from the Railroad. Patrick K. Gamble, former Four Star Air Force general, named new CEO and President of the Alaska Railroad Corporation.

So, Sheffield has close ties with Holland America - which eventually gets bought by Carnival which owns most of the ships cruising in Alaska - because he sold his company to them and his number two man becomes a VP for Holland America. When he retires as governor he becomes head of the Alaska Railroad and pushes for a train depot (which bears his name) at the Anchorage airport. Uncle Ted, as Alaska's senior US Senator is affectionately called, gets $28 million funneled to Alaska from US taxpayers to build the depot at the Anchorage Airport (which bears his name.) Since it was completed in 2002 it has only been used by summer cruise line passengers and is closed most of the year.

Now I think Sheffield and Stevens believe that what they were doing was in the best interests of the State of Alaska. And most Alaskans appreciated the federal largess that Stevens has sent our way, though many have smirked a bit at some of the excesses like the train depot. But the so called "bridges to nowhere" have brought attention to the cumulative effect on the US budget of all the special earmarks Congress has slipped in. And in this case, there is a project whose sole beneficiary in its first five years has been the cruise ship industry.

Did I mention that Carnival and its subsidiaries also own in addition to the Sheffield Hotels, a series of Princess Hotels, where many, if not most, cruise passengers sleep when they are on land. And they own Grayline of Alaska which their cruise passengers travel in when they aren't on the railroad. And they steer their passengers to shore based shops and services for which they get a hefty commission. One of the reasons Ballot Measure 2 passed was to give passengers more information about the business relationships between their cruise ships and the businesses they recommend.

Oh, I forgot to mention that the Baranof Hotel in Juneau, where the Veco executives were taped by the FBI bribing Alaska politicians, is part of Holland Alaska.

June 7 update: For a more recent post on cruises see New Pirates of the Seven Seas
For more on the Airport RR Depot,
click here.