The rumors I heard of this area are as follows: Under the houses across from the Ferry Terminal is a cave, which was used by the military during WWII as storage for a submarine base. My source claimed to have seen fuel drums and other objects inside the cave when he was younger, and that there were some ventilation pipes or shafts in the woods near the houses. He also reported a mine tunnel leading from the gas station (Petrolane?) through the cliff out to the road just south of the Ferry terminal area, where it was sealed off during road construction.
The tunnel we found is in the area of the cave (under
the houses) but appears to be a mine tunnel. The entrance has been sealed
with dirt and rubble but has eroded enough for people to gain entry, there
was some trash inside but no footprints so I am uncertain if my group was
the first to fully explore after it became open again or not. The tunnel
extends back for several hundred feet, and branches off twice to dead ends.
The supporting beams which stand in several places are very rotten, and
many areas had partially collapsed. In adition there are 3 or 4 wooden
ore chutes leading up into stopes, the mouths of which were filled with
several tons of boulders and loose rock when I examined them. Several of
these looked incredibly dodgy, as if the slightest touch would send their
loads crashing down on anyone dumb enough to bump them.
We found nothing to indicate that the tunnel had ever been used by the military, the only artifacts were some strands of electrical wire and broken lightbulbls, the ubiquitous tram rails, and an old bottle. The tunnel didn't match my informant's description of the mine, having only one entrance and being in the wrong area of the road. In fact it lay closer to where the "cave" was reported to be, but lacked the ventilation pipes or old oil drums my source told me were in the cave. There may in fact be some other cavity in the area, either a cave, more mine workings, or the mythical military base. Rumors of such "secret" bases and bunkers are common in Sitka, so it's likely another urban legend.
Other sites of interest nearby include historical Tlinket / Russian camps, the ferry docks, a shooting range, old logging roads, a part time hippie campsite, and some other oddities, so any Sitka area explorer can have a day or two of fun messing around in this area.