Legislature(2019 - 2020)BUTROVICH 205

04/05/2019 03:30 PM RESOURCES

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Audio Topic
03:30:54 PM Start
03:31:24 PM SB95
03:52:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 91 NUYAKUK RIVER: HYDROELECTRIC SITE TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
*+ SB 95 ALASKA RAILROAD CORP. LAND TRANSFERS TELECONFERENCED
Moved SB 95 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 5, 2019                                                                                          
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Chris Birch, Chair                                                                                                      
Senator John Coghill, Vice Chair                                                                                                
Senator Cathy Giessel                                                                                                           
Senator Scott Kawasaki                                                                                                          
Senator Jesse Kiehl                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lora Reinbold                                                                                                           
Senator Click Bishop                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 95                                                                                                              
"An Act approving the transfer of certain Alaska Railroad                                                                       
Corporation land; and providing for an effective date."                                                                         
                                                                                                                                
     - MOVED SB 95 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 91                                                                                                              
"An  Act  relating   to  the  development  and   operation  of  a                                                               
hydroelectric site at the Nuyakuk  River Falls; providing for the                                                               
amendment  of  the management  plan  for  the Wood-Tikchik  State                                                               
Park; and providing for an effective date."                                                                                     
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 95                                                                                                                   
SHORT TITLE: ALASKA RAILROAD CORP. LAND TRANSFERS                                                                               
SPONSOR(s): SENATOR(s) COGHILL                                                                                                  
                                                                                                                                
03/22/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/19       (S)       RES, FIN                                                                                               
04/05/19       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RYNNIEVA MOSS, Staff                                                                                                            
Senator Coghill                                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented an overview of SB 95 on behalf of                                                               
the sponsor.                                                                                                                    
                                                                                                                                
BARBARA BLAKELEY, Board Vice President                                                                                          
Whittier Manor Condominium Association                                                                                          
Whittier, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 95.                                                                            
                                                                                                                                
JIM HUNT, City Manager                                                                                                          
City of Whittier                                                                                                                
Whittier, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 95.                                                                            
                                                                                                                                
JIM KUBITZ, Vice President, Real Estate                                                                                         
Alaska Railroad Corporation                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 95.                                                                            
                                                                                                                                
VIKKI JO KENNEDY, representing self                                                                                             
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 95.                                                                            
                                                                                                                                
NORM BLAKELEY, representing self                                                                                                
Whittier, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 95.                                                                            
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
3:30:54 PM                                                                                                                    
CHAIR CHRIS BIRCH called the Senate Resources Standing Committee                                                              
meeting to order at 3:30 p.m. Present at the call to order were                                                                 
Senators Coghill, Kawasaki, Kiehl, Giessel, and Chair Birch.                                                                    
                                                                                                                                
        SB 95-ALASKA RAILROAD CORPORATION LAND TRANSFERS                                                                    
                                                                                                                                
3:31:24 PM                                                                                                                    
CHAIR BIRCH  announced the  consideration of  Senate Bill  95 (SB                                                               
95), sponsored  by Senator  Coghill. He  stated his  intention to                                                               
move  SB 95  from  committee, barring  any  strong objections  or                                                               
issues being raised.                                                                                                            
                                                                                                                                
SENATOR  COGHILL, Alaska  State  Legislature, sponsor  of SB  95,                                                               
explained that  the legislation is  a good solution for  10 years                                                               
of negotiations for  a property issue between  the Whittier Manor                                                               
Condominium  Association, the  City of  Whittier, and  the Alaska                                                               
Railroad Corporation (ARRC).                                                                                                    
                                                                                                                                
3:32:45 PM                                                                                                                    
RYNNIEVA MOSS, Staff, Senator  Coghill, Alaska State Legislature,                                                               
Juneau,  Alaska,  explained that  the  issue  of identifying  the                                                               
exact  address  of  the  Whittier   Manor  Condominium  has  been                                                               
resolved.                                                                                                                       
                                                                                                                                
She detailed the background information for SB 95 as follows:                                                                   
                                                                                                                                
   • Whittier Manor Condominium entered a lease with the                                                                        
     Railroad Corporation on February 15, 1980:                                                                                 
        o The Railroad Corporation was federally owned at the                                                                   
          time.                                                                                                                 
        o President Regan approved transfer of the railroad to                                                                  
          the State of Alaska in 1983.                                                                                          
        o The railroad was officially transferred to the state                                                                  
          in 1985, resulting in ARRC becoming the landlord of                                                                   
          the Whittier Manor Condominium.                                                                                       
   • Whittier Manor Condominium entered a management contract                                                                   
     with the City of Whittier to manage the railroad's property                                                                
     a few years after ARRC was transferred to the state:                                                                       
        o The City of Whittier is party in the property                                                                         
          discussion to be made whole for their management                                                                      
          contract with ARRC.                                                                                                   
   • Over a 10-year period, discussions have resulted in an                                                                     
     agreement   between    the   Whittier    Manor   Condominium                                                               
     Association, the City of Whittier, and ARRC.                                                                               
   • The City of Whittier and ARRC have presented resolutions                                                                   
     relating to the sale of land to the Whittier Manor                                                                         
     Condominium Association.                                                                                                   
                                                                                                                                
She explained  that as the  current lease for the  Whittier Manor                                                               
Condominium  Association nears  the end  with ARRC,  the property                                                               
sale addresses several issues:                                                                                                  
                                                                                                                                
   • Land does not belong to the Whittier Manor Condominium                                                                     
     Association:                                                                                                               
        o Condominium values are not as high as they could be.                                                                  
        o Land cannot be collateralized to pay for the 39-year-                                                                 
          old facility's deferred maintenance and improvements.                                                                 
   • Whittier Manor Condominium's 58,000 square foot lot was                                                                    
     appraised at $170,000:                                                                                                     
        o Land purchase price is $170,000.                                                                                      
        o City of Whittier will be able to collect property                                                                     
          taxes and possibly raise the city's tax-base value.                                                                   
                                                                                                                                
3:35:56 PM                                                                                                                    
SENATOR KIEHL asked what is expiring in 2020 and 2033.                                                                          
                                                                                                                                
MS.  MOSS  explained  that  the  City  of  Whittier  offered  the                                                               
Whittier   Manor   Condominium   Association  a   13-year   lease                                                               
extension,  but the  association  would rather  own the  property                                                               
because the lease in not bankable.                                                                                              
                                                                                                                                
SENATOR KIEHL asked for clarification  of the meaning of the City                                                               
of  Whittier resolution  that  refers  to a  split  of the  price                                                               
between the  city to  compensate for  its leasehold  interest and                                                               
the railroad and the bill that  says the railroad may accept cash                                                               
equivalent to the fair market value of the land.                                                                                
                                                                                                                                
MS. MOSS explained that it means  ARRC will reimburse the City of                                                               
Whittier  for  the  share  that  they  own  to  get  out  of  the                                                               
management contract.                                                                                                            
                                                                                                                                
SENATOR KIEHL  asked Ms.  Moss to  specify how  much the  City of                                                               
Whittier and  ARRC will  end up with  from the  $170,000 purchase                                                               
price.                                                                                                                          
                                                                                                                                
3:37:16 PM                                                                                                                    
MS. MOSS  replied that she  would need to review  the resolutions                                                               
before answering.                                                                                                               
                                                                                                                                
CHAIR BIRCH noted that individuals  from the City of Whittier and                                                               
ARRC were available to answer questions.                                                                                        
                                                                                                                                
MS. MOSS said  the percentages are in one of  the resolutions but                                                               
it  is  up to  ARRC  to  pay the  city  due  to their  management                                                               
contract.                                                                                                                       
                                                                                                                                
SENATOR GIESSEL referenced ARRC  resolution number 2019-04, dated                                                               
March 21, 2019.  She said on page 2 the  third "WHEREAS" from the                                                               
bottom  says ARRC  will  receive between  42.2  percent and  43.4                                                               
percent  and  the City  of  Whittier  will receive  between  56.6                                                               
percent and 57.8 percent.                                                                                                       
                                                                                                                                
MS. MOSS concurred with Senator Giessel.                                                                                        
                                                                                                                                
SENATOR KIEHL  said he  understood that  Ms. Moss  explained that                                                               
ARRC  will accept  the full  $170,000 and  then pay  the City  of                                                               
Whittier its share.                                                                                                             
                                                                                                                                
SENATOR GIESSEL asked for clarification  that the address for the                                                               
Whittier Manor Condominium in the bill was correct.                                                                             
                                                                                                                                
MS. MOSS confirmed the address was correct.                                                                                     
                                                                                                                                
3:39:13 PM                                                                                                                    
CHAIR BIRCH opened invited testimony.                                                                                           
                                                                                                                                
3:39:44 PM                                                                                                                    
BARBARA   BLAKELEY,   Board   Vice  President,   Whittier   Manor                                                               
Condominium Association,  Whittier, Alaska, testified  in support                                                               
of  SB 95.  She  explained that  the  Whittier Manor  Condominium                                                               
Association has been working for  years to purchase the land from                                                               
ARRC. All parties have agreed to  the sale of the property to the                                                               
Whittier Manor Condominium Association.                                                                                         
                                                                                                                                
She noted  that condominium sales  have not occurred  because the                                                               
Whittier  Manor  Condominium  Association's  lease  is  about  to                                                               
expire.  She  added  that  condominium  owners  have  seen  their                                                               
investment lose value due to the lease situation.                                                                               
                                                                                                                                
She  said  the process  that  the  association went  through  was                                                               
complicated  by a  master  lease agreement  between  the City  of                                                               
Whittier  and ARRC.  The Whittier  Manor Condominium  Association                                                               
has come to  an agreement with all entities to  purchase the land                                                               
and all  the association needs  is for the Alaska  Legislature to                                                               
sign off on the deal.                                                                                                           
                                                                                                                                
3:43:03 PM                                                                                                                    
JIM  HUNT,  City Manager,  City  of  Whittier, Whittier,  Alaska,                                                               
testified in support  of SB 95. He said the  ten-year process has                                                               
resulted  in  everybody  coming  together for  the  good  of  the                                                               
landowners.                                                                                                                     
                                                                                                                                
3:44:44 PM                                                                                                                    
JIM  KUBITZ,   Vice  President,  Real  Estate,   Alaska  Railroad                                                               
Corporation, Anchorage,  Alaska, testified  in support of  SB 95.                                                               
He said the  process has been long, but the  result turned out to                                                               
benefit everyone.                                                                                                               
                                                                                                                                
3:45:36 PM                                                                                                                    
CHAIR BIRCH opened public testimony.                                                                                            
                                                                                                                                
3:46:08 PM                                                                                                                    
VIKKI JO  KENNEDY, representing  self, Kodiak,  Alaska, testified                                                               
in support  of SB  95. She  said she  supports the  state selling                                                               
land to make money.                                                                                                             
                                                                                                                                
3:47:08 PM                                                                                                                    
NORM BLAKELEY, representing self,  Whittier, Alaska, testified in                                                               
support of SB 95.  He said he did not see  any reason where there                                                               
should be  any resistance  to the  land sale  and noted  that all                                                               
parties involved have agreed.                                                                                                   
                                                                                                                                
3:48:03 PM                                                                                                                    
CHAIR BIRCH closed public testimony.                                                                                            
                                                                                                                                
SENATOR KAWASAKI asked  Mr. Kubitz to explain the  meaning of the                                                               
following "WHEREAS" on page 3 of the ARRC resolution:                                                                           
                                                                                                                                
     Whereas,  the  Board   of  Directors  specifically  and                                                                    
     expressly finds that (i) the  Property is not currently                                                                    
     necessary for  railroad purposes,  but might  become so                                                                    
     in the  future, and (ii)  the sale  of the land  to the                                                                    
     Association would be, if made  subject to the retention                                                                    
     by ARRC  of certain rights to  repurchase and/or redeem                                                                    
     the  Property, in  the best  interest of  the State  of                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
MR.  KUBITZ   explained  that  the  Whittier   Manor  Condominium                                                               
property  is  immediately  adjacent   to  the  ARRC  railyard  in                                                               
Whittier and has always been  identified as a potential expansion                                                               
area. ARRC has no current plans  for expansion but wanted to hold                                                               
back the  possibility for expansion  so they negotiated  with the                                                               
City and the condominium owners  for handsome compensation should                                                               
ARRC  ever need  to  expand  its yard.  Normally,  ARRC does  not                                                               
include  repurchase language,  but the  land is  adjacent to  its                                                               
yard in Whittier and that is why the language was inserted.                                                                     
                                                                                                                                
MS. MOSS  added that  the resolution does  say that  the proceeds                                                               
from the sale  would be split such that ARRC  receives 42 percent                                                               
and the City of Whittier receives 58 percent.                                                                                   
                                                                                                                                
3:50:32 PM                                                                                                                    
SENATOR GIESSEL moved to report  SB 95, version 31-LS0678\U, from                                                               
committee  with  individual  recommendations  and  attached  zero                                                               
fiscal note.                                                                                                                    
                                                                                                                                
CHAIR BIRCH said  there being no objection, SB 95  moves from the                                                               
Senate Resources Standing Committee.                                                                                            
                                                                                                                                
3:50:54 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
3:52:10 PM                                                                                                                    
CHAIR BIRCH called the committee back to order.                                                                                 
                                                                                                                                
3:52:31 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Birch adjourned the Senate Resources Standing Committee                                                                   
meeting at 3:52 p.m.                                                                                                            

Document Name Date/Time Subjects
SB95 Sponsor Statement.pdf HRES 5/6/2019 1:00:00 PM
HRES 5/8/2019 1:00:00 PM
SFIN 4/15/2019 9:00:00 AM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 Version U.PDF HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 Fiscal Note DCCED-ARRC 3.29.19.pdf HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 Whittier CIty Resolution 3.12.19.pdf HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 ARRC Resolution 3.21.19.pdf HRES 5/6/2019 1:00:00 PM
HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 Whittier Condominiums Photos.pdf HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95
SB95 Weolber & Cole Letter 3.29.19.pdf HRES 5/6/2019 1:00:00 PM
HRES 5/8/2019 1:00:00 PM
SRES 4/5/2019 3:30:00 PM
SB 95