It was the authority's first board meeting since Gov. Frank Murkowski took office and appointed new members to the AIDEA board. In other actions, the board elected Mike Barry, an Anchorage economic consultant, as its new chairman, and local businessman Ronald Miller as its new executive director. Miller will begin full-time at the authority in mid-February.

The state development corporation purchased the Skagway terminal for $25 million in 1990 to allow concentrates to be shipped through Skagway from lead-zinc mines in the Yukon Territory. The facility was originally developed by the White Pass & Yukon Route in 1967.

The Yukon's major zinc mines shut down in 1992 when markets softened, and the terminal has not been used regularly since then. The last ore ship from Skagway sailed in 1998, according to Jim McMillan, AIDEA's deputy director for credit, who made the presentation to the authority's board.

Meanwhile, corrosion created by lead and zinc residues left in the building have now weakened its structure and roof, to the point that it is a serious safety hazard, McMillan said.

AIDEA has hired R&M Engineering Inc. to study possible repairs, "but the best solution now is to demolish the structure," McMillan said.

The authority's plan is to leave as much of the ore loading infrastructure as possible. The floor of the building will be capped with concrete, and the ore loading facility will also remain.

A ship-loading unit, a conveyor system, a shop and office building at the terminal can be saved, according to John Wood, the authority's manager for projects.

"It's likely that mining will resume again in the Yukon when base metals markets turn up, but our estimates indicate it will be a number of years before that is likely," McMillan said.

The City of Skagway would like to leave as much of the ore terminal left so that if mining activity resumes a new structure can be built, he said.

"Tourism has become a major industry for Skagway but diversification is very important to the community, and they do not want to lose the option of having this industry," McMillan told the board.

AIDEA could consider transferring ownership of what's left of the terminal to the city, he said.

Redfern Resources, a Canadian company planning the Tulsequah Chief mine in British Columbia, east of Juneau, has indicated a desire to ship ore concentrates through Skagway, but the soonest the mine could be in production is in four or five years, McMillan said. The building won't last that long.

It's now a safety hazard for tourists who disembark from cruise ships near the structure, he said.

However, tourism has grown so fast in Skagway that there could be future conflicts for dock space between cruise and ore ships during the summer, if mining resumes, Wood said.

Under the city's agreements for use of Skagway's docks, cruise ships have priority over ore ships, he said. On some days during the summer, Skagway has four cruise ships in port at the same time, and there are dock expansion plans that could allow five cruise ships.

It can take two or three days to load an ore ship, so there could be problems for ore ships in getting dock space in the summer, Wood said.

Because the terminal has not been used in years, AIDEA has already written off most of its investment in the project, according to Valorie Walker, AIDEA's deputy director for finance. One writedown was in 2001, and another was in the late 1990s, she told the AIDEA board.