05/06/2003 01:25 PM Senate TRA

            HB  97-LONG-TERM LEASES OF ALASKA RR LAND                                                                       
                                                                                                                                
VIC KOHRING,  bill sponsor, explained  the bill extends  the lease                                                              
of  a  piece  of  railroad  leased  land  on  Government  Hill  in                                                              
Anchorage from  55 to  75 years. An  Anchorage developer  wants to                                                              
build  senior housing  on the  land and  needs to  have a 75  year                                                              
lease to  receive federal grant money.  The railroad is  only able                                                              
to give him a  55 year lease, but HB 97 would  provide legislative                                                              
approval  for  the  20 year  extension.  It  would  authorize  the                                                              
railroad  board to  offer the  extension at  their discretion.  He                                                              
added there would be no state funds  involved; HUD 202 grant money                                                              
would be used.                                                                                                                  
                                                                                                                                
CHAIR COWDERY  said he  understands the  railroad couldn't  extend                                                              
the lease without legislative approval.                                                                                         
                                                                                                                                
REPRESENTATIVE KOHRING  agreed and  added the developer  must have                                                              
the application in by June 13, 2003.                                                                                            
                                                                                                                                
MARK  MARLOW,  contractor  and facilitator  for  Alaska  Franchise                                                              
Facilities, testified  via teleconference to say the  lease on the                                                              
property began in September 2002.                                                                                               
                                                                                                                                
CHAIR COWDERY asked  how much money the project  would inject into                                                              
the Anchorage economy.                                                                                                          
                                                                                                                                
MR. MARLOW said there would be a  $3.7 million grant for 20 units.                                                              
                                                                                                                                
CHAIR COWDERY  asked if it was  true that the railroad  could stop                                                              
the project even if the Legislature  granted them the authority to                                                              
extend the lease.                                                                                                               
                                                                                                                                
MR. MARLOW said that was correct.  The railroad board considered a                                                              
resolution  at the last  meeting and  authorized the extension  of                                                              
the lease subject  to passage of HB 97 and the  acquisition of the                                                              
grant.                                                                                                                          
                                                                                                                                
SENATOR GEORGIANNA  LINCOLN remarked the committee  heard the same                                                              
legislation in SB  153 and asked if there was  anything other than                                                              
a title change and the upward limit that was different.                                                                         
                                                                                                                                
REPRESENTATIVE KOHRING said he didn't believe so.                                                                               
                                                                                                                                
SENATOR LINCOLN  asked what  the title meant  when it  referred to                                                              
Alaska Railroad Contract No. 8371.                                                                                              
                                                                                                                                
WENDY  LINDSKOOG,  director of  external  affairs  for the  Alaska                                                              
Railroad  Corporation,   explained   contract  8371  refers   very                                                              
specifically  to  the current  lease  the  railroad has  with  Mr.                                                              
Marlow and eliminates the need to list the legal description.                                                                   
                                                                                                                                
SENATOR THOMAS  WAGONER asked  what would  happen to Mr.  Marlow's                                                              
lease if he weren't successful and  is his lease predicated on the                                                              
extension of time on the lease and this specific project.                                                                       
                                                                                                                                
MS. LINDSKOOG  replied Mr.  Marlow currently has  a 55  year lease                                                              
with  the  railroad and  he  would  continue  to have  that  lease                                                              
whether the HUD financing comes through  or not. The current lease                                                              
document  says multi-family  housing units  would be  built so  it                                                              
would be that or senior housing.                                                                                                
                                                                                                                                
SENATOR  WAGONER  said  he  remembers  previous  public  complaint                                                              
regarding  the  quality of  housing.  $3.7  million for  20  units                                                              
translates to $185,000  per unit so you would expect  the units to                                                              
be quite nice.                                                                                                                  
                                                                                                                                
SENATOR  LINCOLN noted  the committee  heard  from the  Government                                                              
Hill  Community  Council  previously  and  they  objected  to  the                                                              
project.  She asked  if there  was continuing  objection now  that                                                              
changes had been made.                                                                                                          
                                                                                                                                
REPRESENTATIVE   KOHRING  replied  there probably  was  continuing                                                              
objection. He isn't  sure what their objections  are specifically,                                                              
but if the developer  doesn't get his federal grant  he'll use the                                                              
55 year  lease to build  a different  facility. That  would likely                                                              
result in a more dense type facility.                                                                                           
                                                                                                                                
He noted the House passed a letter of intent to encourage the                                                                   
parties to work together.                                                                                                       
                                                                                                                                
SENATOR LINCOLN applauded Representative Kohring for being one of                                                               
the sponsors of the letter of intent.                                                                                           
                                                                                                                                
SENATOR WAGONER motioned to move HB 97 am version \H.A from                                                                     
committee with individual recommendations. There being no                                                                       
objection, it was so ordered.