Fishermen in Homer will have one less fish buyer in town in 2018. The Auction Block announced via Facebook on Dec. 20 that it would officially be closing its doors. The fish buyer and processor entered bankruptcy back in September and has been working on selling the business to California-based Southwind Seafoods. But the deal may be in jeopardy after the City of Homer objected to the sale.
The Auction Block has been one of Homer’s larger fish buyers for about 20 years and the business may live on under the Southwind Seafoods banner, but according to court documents, Auction Block owes over $100,000 to the city for crane and ice services. The city land the business sits on is also sub-leased from Harbor Leasing, which owes about $140,000 the city in back rent.
In the motion to sell Auction Block for just under $2 million, court documents say about $1.6 million would be paid to Alaska Growth Capital, the largest creditor in the case.
The city argues the sale can’t happen because state law requires the lease to be paid up to date in order for it to be transferred to Southwind. But the profits from the sale aren’t enough to satisfy the roughly $2.5 million owed to creditors, and the city’s objection has put a halt on the sale for now.
The longer the bankruptcy proceedings take, the more money the city misses out on, not just on rent from the land, but a closed down fish buyer means the city sells less crane time for unloading fish and ice services on the fish dock.
“Auction Block was a major player in Homer, and we’re feeling the impact of their not being in business now,” Brian Hawkins said, Homer’s harbormaster.
Hawkins explains that the city operates its fish dock in a unique way. Rather than one fish buyer signing a contract with the city and controlling the dock, any buyer in town has access, which means prices in Homer can be more competitive.
“Fishermen generally get more per pound for fish in Homer then they do in other communities around the state,” Hawkins said.
Those competitive prices have made the longer run to Homer worth it in the past, but Auction Block’s closure is coming at a time when Halibut and Pacific cod stocks are down, making the extra fuel for a run to Homer more of a barrier.
Auction Block owner Kevin Hogan declined to comment on the bankruptcy proceedings, but he did say that the business primarily purchased halibut, but also dealt in salmon and other markets. The business also acted as a middleman for other buyers around the state and did some processing work.
With fewer markets accessible in Homer and declining fish stocks, it may make it more enticing for fishermen to unload their boats in Seward or Kodiak, which also have the advantage of being closer to the fishing grounds.
“If you have a declining quota and say you have less fish in your hold,” Hawkins added. “Normally you’d have 50,000 pounds, but you only have 10,000 pounds, the amount of run time it takes to get to market is a major factor and all of those things play into it.”
Fewer fish coming across Homer’s docks could also mean less fish tax for the city. There are about seven active fish buyers left in Homer, which could potentially fill the gap left by Auction Block, but Homer-based Commercial Fishermen Buck Laukitus said that’s not a given.
Laukitus adds that it’s not just less fish that will impact the community, it’s also a matter of jobs.
“When we come in and offload, you have an offload crew that’s taking the fish off, you have processing workers, you have someone in the office who probably just lost a job doing the paperwork for the landing. You have an accountant, etc,” Laukitus said. “So, it’s a big blow to the community to lose a processor.”
Hogan said Auction Block employed about 10 to 60 people throughout the year.
It’s unclear whether Southwind will pull out of the deal as a result of the city’s objection, and company representatives were not available to comment in time for this story.