03/20/2002 03:35 PM Senate RES

      CSHB 298(L&C)-LEGISLATIVE APPROVAL OF RAILROAD LEASES                                                                 
                                                                                                                                
CHAIRMAN  TORGERSON   announced  CSHB   298(L&C)  to  be   up  for                                                              
consideration.                                                                                                                  
                                                                                                                                
MS.  ROBIN  PHILLIPS,  staff  to  Representative  Lisa  Murkowski,                                                              
sponsor of HB 298, gave the following synopsis of the bill.                                                                     
                                                                                                                                
     The Alaska  Railroad Corporation  (ARRC) requested  this                                                                   
     bill, which  extends the length  of time they  can lease                                                                   
     lands from the current 35 years to 55 years.                                                                               
                                                                                                                                
     This  change in  statute  will help  cultivate  economic                                                                   
     development in communities along  the Railbelt by making                                                                   
     commercial   and  residential   development  on   Alaska                                                                   
     Railroad lands  more viable. The current  35-year leases                                                                   
     are  an obstacle in  leasing lands  to large  commercial                                                                   
     and residential developers who  need to secure long-term                                                                   
     financing for  their investments. Financial  lenders are                                                                   
     reluctant  to invest in  large scale projects  requiring                                                                   
     substantial   equity  participation   when  there's   no                                                                   
     guarantee the  land will be  available for 35  years. HB
  will also make  the ARRC's  leasing practices  more                                                                   
     consistent   with  other   state   agencies.  Both   the                                                                   
     University  of  Alaska  and the  Department  of  Natural                                                                   
     Resources can lease land for up to 55 years.                                                                               
                                                                                                                                
     The proposed  extension of the  allowable lease  term is                                                                   
     supported by  the following businesses,  individuals and                                                                   
     organizations: Anchorage Historic  Properties, Anchorage                                                                   
     Neighborhood  Housing Services,  Mel Tipton (Ship  Creek                                                                   
     tenant   and  commercial   developer),   Seward   Ship's                                                                   
     Drydock,  Inc., Dowl  Engineers,  Northrim Bank,  AIDEA,                                                                   
     Yukon Fuel,  Kantishna Holdings, Inc.,  A&A Construction                                                                   
     and  Development,   Inc.,  the   Anchorage  Chamber   of                                                                   
     Commerce,  City   of  Seward,  Anchorage   Assembly  and                                                                   
     Fairbanks Chamber of Commerce.                                                                                             
                                                                                                                                
MR. JIM KUBITZ,  Vice President, Real Estate Division,  ARRC, said                                                              
there  really hadn't  been much  controversy about  this. It  came                                                              
from a demand  from their tenants and leaseholders  who really are                                                              
looking for longer terms to lease lands.                                                                                        
                                                                                                                                
CHAIRMAN TORGERSON said he didn't know of any opposition either.