Legislature(2003 - 2004)
03/24/2003 03:36 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CSHB 139(RES)-CLOSING CERTAIN LAND TO MINERAL ENTRY REPRESENTATIVE MIKE HAWKER, sponsor of HB 139, gave the following explanation of the measure. This is a rare opportunity for me to come before you and ask you to extend for 10 years a moratorium against mining claims. It's kind of an unusual circumstance. HB 139 affects a certain area in the upper Girdwood Valley - an area that is immediately adjacent to the current Alyeska Ski Resort development area. This land, 5,740 acres, that exists adjacent to the current ski resort, was closed to - or a mining closure was issued on this 10 years ago. That order has expired. This bill - and actually then, through the process, the Administration reauthorized the order. We, as the legislative body, need to affirm that authorization for it to remain in effect and we have until April 20 for that closure to remain in effect. This is a 10-year extension of the moratorium on new mining claims in this area, specifically to allow the owners of the property, which is a combination of the State of Alaska, the Municipality of Anchorage (MOA), Heritage Land Bank, to issue a request for proposal and seek for additional major world class alpine ski resort development. The area that is subject to this closure had been mined in the late 1800s. It pretty much ceased being mined in the mid-20th Century. There were additional claims staked on it in the 1980s by the Toohey (ph) family, who operates commercial and recreational mining areas on the other side of the valley - also I was going to say on the far side of this particular parcel. When the mining area was first closed 10 years ago, there were no takings - I have to emphasize - there were no takings involved. The claims that folks had were purchased out, fee simple purchases, and the entire community concurred that the best and highest development for this property would not be for the commercial mining but would be for recreation resort development. Your bill package includes the spectrum of endorsements we've got to extend this closure - probably the most important to us is the Alaska Miners' Association has specifically endorsed the continuation of this closure, then all of the community interests - the Girdwood Board of Supervisors, Heritage Land Bank, Municipality of Anchorage, the Department of Natural Resources (DNR), as well as personal conversations I've had with the Toohey family of not only non-objection, but endorsement of this project. It's important to note the [Department of] Natural Resources document here indicates that the prospect of commercial development in this area is minimal. There's very little [indisc.]. From the standpoint of mining, it's really at best a recreational mining area. The use for recreational mining is not incompatible with ski resort development. It's my understanding that that use would not be closed by this order. This order again would apply only to commercial development that would impede the ability to use this land or to further lease this land for ski resort development. I would be very happy to entertain your questions but, again, would certainly hope you'd be able to continue to help us move this bill along and get it to the Governor before April 20th. CHAIR OGAN announced that Senator Lincoln joined the committee shortly after the meeting convened. He then asked if voting in favor of this bill would ruin his zero rating with environmental groups. REPRESENTATIVE HAWKER expressed concern that might occur. He then said this is a unique opportunity in which very diverse interests have agreed that the highest, best, economic development of this area is for recreational activities. CHAIR OGAN asked who is anticipated to develop this area. REPRESENTATIVE HAWKER said he learned, in his conversations with the current management at Alyeska, that Alyeska is interested but doubts it would be the prevailing party. This bill will actually bring competition to that area. CHAIR OGAN asked if a 10-year moratorium will create a situation in which no development will occur for 9 years and whether it would be more advantageous to implement a 5-year moratorium to encourage development sooner. REPRESENTATIVE HAWKER said if commercial development does not begin within 10 years, the area would automatically reopen to mining. There has been some debate on the time frame and window but, considering the magnitude of the projects under consideration and current world economics, he believes a 10-year window is appropriate. 3:45 p.m. SENATOR LINCOLN read from the Alaska Miners' Association letter: ...Our concern is that lands not be permanently closed to mineral entry in the case that the ski area is not developed. She then said, according to the memorandum dated March 6 from Kathryn Kurtz, legislative counsel, Section 4 of the bill has an effective date of 2012 and provides that the repeal in Section 4 will take effect unless the commissioner of natural resources certifies on or before April 2 that development of a resort has begun in the closed area. She asked whether a minor structure would fit that description. REPRESENTATIVE HAWKER said the reference she made to the letter from the Alaska Miners' Association referenced the first draft of this bill. It required that an affirmative action be taken by the administration of the State of Alaska for the area to be reopened to mining. The Alaska Miners' Association preferred that the reopening happen automatically, rather than requiring an affirmative action. The bill that passed the House is a committee substitute (CS) in which the Alaska Miners' Association concern was accommodated. SENATOR LINCOLN asked Representative Hawker to cite that section in CSHB 139(RES). REPRESENTATIVE HAWKER said that can be found on page 3, lines 3 through 7. He explained that section provides important parameters in that someone will not be able to slap together a structure at the last minute and ask to keep the area closed to mining. The development must be in concert with the comprehensive land use plans developed for this area by the state and MOA. SENATOR LINCOLN said she does not interpret that section to apply to development of the full resort or to a specific stage of development. It only adds that the development plan is in a land use plan. She asked if the Alaska Miners' Association has endorsed CSHB 139(RES). REPRESENTATIVE HAWKER said it has. He repeated the 10-year window is for the beginning of the construction of a viable resort as described. It is not for completion of that facility. SENATOR ELTON asked if anyone is planning to develop the ski resort at this time. REPRESENTATIVE HAWKER said no one is "waiting in the wings" at this time. He said this is not special interest legislation and, in fact, the current issue of the Turnagain Times features this resort in the Girdwood 2020 organization. The article says the next step, following the passage of CSHB 139(RES), is a two-year plan to update a 10-year old feasibility study and issue a formal request for proposals to develop the area. SENATOR ELTON asked if the only reason CSHB 139(RES) is necessary is to preclude staking that might be done on speculation. REPRESENTATIVE HAWKER said that is correct; CSHB 139(RES) is preemptive. SENATOR LINCOLN asked if the subsurface rights on the 5,740 acres will remain with the state. REPRESENTATIVE HAWKER deferred to George Cannelos for an answer to that question. CHAIR OGAN said the state will still own the subsurface rights and could not lease those rights to anyone during that time. MR. GEORGE CANNELOS, Heritage Land Bank, MOA, said he believes the state would maintain ownership of the subsurface rights but deferred to DNR for more detailed information. MR. BOB LOEFFLER, Division of Mining, Land and Water, DNR, affirmed that the state would maintain ownership to the subsurface rights. He noted that of the 5,740 acres, 1,000 acres are owned by the MOA and 4,700-plus acres are owned by the state. CHAIR OGAN asked if the MOA land is fee simple. MR. LOEFFLER said it is fee simple only with respect to the surface rights. The state retains the subsurface rights. MR. CANNELOS stated support for CSHB 139(RES) as it provides an opportunity for the state, the MOA, and the private sector to partner together to test the feasibility of developing the Glacier Winner Creek area as the next major alpine ski resort area for Girdwood. The Heritage Land Bank wants to do two things this year. First, it would like to issue a request for a proposal to update the development concept and look at the economics of the project again. Some excellent studies were done about 10 years ago, but they need to be updated. Second, when that is concluded, it wants to go out to the private sector and solicit interest from a prime developer. Regarding the question asked about the participation of Alyeska, while Alyeska has said it probably will not be a direct partner, the $200 million hotel was located halfway between Alyeska Mountain and the new Glacier Winner Creek resort. Regarding the 10-year period, he agrees with Representative Hawker that a project of this magnitude will be built in phases so 10 years is a reasonable time frame. SENATOR STEVENS arrived. MR. LOEFFLER stated support for CSHB 139(RES) and said DNR has reviewed this bill with a critical eye. There being no further questions or testimony, SENATOR DYSON moved CSHB 139(RES) from committee with individual recommendations and its zero fiscal note. CHAIR OGAN noted that without objection, the motion carried. He then announced the committee would take up SB 70.