US to Pay Anchorage $180M to Settle Long-Running Port of Alaska Litigation

The United States and Municipality of Anchorage, Alaska, reached a settlement agreement to conclude more than a decade of litigation related to the upgrades to the Don Young Port of Alaska expansion project. The municipality sued over failed efforts led by the Maritime Administration for the port’s modernization.

Under the terms of the settlement, the United States will pay Anchorage $180 million to conclude the litigation for the alleged fault in the incomplete port expansion project. While the amount is about half what the municipality had sought, officials said it roughly equals the value of the initial project. Anchorage's mayor called it a "massive victory."

In addition to the $180 million, the municipality had won an additional $11.3 million in a 2024 ruling, which will also be paid. The state and federal governments have also committed to providing a further $86.5 million.

Anchorage and the federal government first agreed in 2003 to begin improvements on the port, with further agreements in 2011. The project, however, was found to be faulty in 2010 when damage was discovered with the installed sheet piles, which led to failures at the port. A subcontractor also alleged they were not properly reimbursed.

Alaska’s primary inbound-cargo port, the operation in Anchorage, handles containers, liquid bulk, dry bulk, break bulk, and cruise ships. It handled 5.5 million tons of fuel and freight in 2025, about half of which was delivered to final destinations outside of Anchorage – statewide, including Southeast.

“Reaching this fair and reasonable resolution allows both parties to move beyond many years of litigation and instead focus on what matters most: modernizing and beautifying the Port of Alaska, while lowering costs for consumers,” said Acting Attorney General Todd Blanche.

The modernization project calls for replacing two cargo docks as well as the terminal used for offloading fuel and cement. It will replace the current corroding terminals with larger facilities that also adhere to seismic design standards for the area that is prone to earthquakes.

After years of delay and the earlier failures, the project is now expected to be completed in 2035. Construction for the new terminal one began at the end of June and is scheduled to be completed in 2029. Construction on the second terminal will begin in 2029 with a target completion date of 2032. The estimated price tag for the project is now set at $2.75 billion.