The City of Kodiak is handing over more control of its shipyard to contractor Highmark Marine Fabrication. The City Council approved an updated agreement with the company last week on Oct. 23, giving it price-setting authority in conjunction with the city manager.
Highmark took over operation of Kodiak’s shipyard from the city five years ago on Sept. 1, 2020. Under the initial agreement, the city set service rates and Highmark paid the city $5,000 a month plus 15% of the gross earnings from shipyard services which has since been amended. There was an amendment made to this agreement in November of 2024 updating the amount the company would pay the city each month. Since that change, the city reported receiving $131,250 from Highmark from December, 2024 to June, 2025 in total rental income. According to Highmark's operating budget from last year, the company made $40,931 in net income from the shipyard.
Highmark operates and maintains Kodiak’s largest boat lift, a marine Travelift which was built in 2009, that services commercial fishing vessels, towing tugboats and other vessels up to 660 tons. The company says in the last two years, it worked to decrease the number of days that vessels were dry docked, and increased the number of vessels it hauls out or serviced by 35%.
During a city council work session last month on Sept. 23, Dee Monroe, a representative with the company, said that it’s time to raise rates to adjust for inflation and market conditions. This would be the first time Highmark has raised rates at the Kodiak shipyard since it took over operations on-site.
“We’ve tried to hold off this increase as long as possible. Maybe it’s arguable from a business standpoint, and maybe this increase should have been implemented about two years ago," he said. "But given the dire circumstances of the economy, we were kind of in agreement with the council to sort of forestall this.”
Last month Highmark asked the city to amend the agreement so it would be able to set its own prices in conjunction with the city manager. Monroe and Highmark owner Cooper Curtis said that could also allow the company to offer discounts, specifically in instances when commercial fishing is down and the company can utilize those discounts to offset that, “especially for a local customer."
Outgoing city manager Randy Robertson told the council last week on Oct. 23 that he met with Highmark’s owner Cooper Curtis before he recommended the city council approve the updated agreement.
“One of the things I've learned in the short time I've been here is how special the relationship we have with Highmark [is]. They had a long history of providing top quality and out-of-the-box thinking services to the community, to the city," Robertson said. "In this one, it allows them some flexibility to be more competitive while responding in a faster time to the market needs."
The city expects to earn over $230,000 from Highmark this fiscal year after increasing the monthly payments it receives from Highmark on July 1. The agreed rate schedule between Highmark and the city includes 3% annual gains for the city through June 2030 with the same monthly payment in 2029 and 2030 of $21,736.39.
The city is also letting Highmark quadruple the square footage of its on-site storage area within the shipyard. According to city documents, the company will go from having 2,000 to 8,000 square feet on site.
But the city says it’s not expected to impact local port and harbor operations or revenue. Highmark says this will allow the company more space to set up temporary shelters for conducting industrial coatings for vessels at the shipyard.
This updated agreement also requires the company to obtain a survey of the shipyard depicting the boundaries of the site, including the storage space and various improvements made by both the city and Highmark.
The new terms went into effect immediately after the Oct. 23 council meeting, just ahead of the uptick in winter work Highmark typically gets from the local trawl fleet from November until January.
Highmark has 50 full-time employees, 85% of whom are year-round residents in Kodiak according to the company. It also finalized an agreement with the Sitka Assembly earlier this year to operate the city's new marine haulout.
Editor's Note: This article has been updated to include more detailed information about the payments Highmark makes to the city, the revenue Highmark takes in from the shipyard and how rates will be determined going forward.
