Legislature(2023 - 2024)BARNES 124
04/18/2024 01:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska's Ports and Harbors | |
| HB395 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 395 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 395-TRANSFER OF RAILROAD PROPERTY
[Contains discussion of HB 199.]
1:55:54 PM
CHAIR MCCABE announced that the final order of business would be
HB 395, HOUSE BILL NO. 395, "An Act approving the transfer of
land owned by the Alaska Railroad Corporation to the City of
Nenana; and providing for an effective date."
1:56:36 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, introduced HB 395 on behalf of Representative
McCabe, prime sponsor. She paraphrased the sponsor statement
[included in the committee packet], which read as follows:
House Bill 395 aims to facilitate the transfer of land
from the Alaska Railroad Corporation to the City of
Nenana. This transfer is significant because the city
has been actively managing this land since 1981,
investing approximately $29 million in infrastructure
over the years.
The location of the land holds strategic importance
for industrial development, given its proximity to the
river system, the Alaska Railroad, the Parks Highway,
and the Nenana Airport, which collectively serve as a
vital transportation hub. By acquiring ownership of
this land, the municipality aims to leverage it for
further economic growth in the region.
The goal for the municipality to own the land under
the infrastructure will further economic growth in the
region, and the city has a development plan that
includes Nenana's Municipal Boat Launch. This boat
launch serves as an access point for many rivers such
as the Tanana, Totatlankia, Teklanika, Tolovana,
Kantishna and the Yukon. The City of Nenana has
invested $300,000 in the boat launch alone and is a
central piece of infrastructure which is located on
the railroad property that will be conveyed under this
legislation.
Overall, HB 395 seeks to empower the City of Nenana to
take ownership of the land it has been managing and
investing in for decades, enabling it to further its
economic development goals and utilize key
infrastructure assets for the benefit of the community
and the region.
1:58:59 PM
MS. MORRIS gave the sectional analysis [included in the
committee packet] for HB 395, which read as follows [original
punctuation provided]:
Section 1 amends the uncodified law of the State of
Alaska by amending a new section that approves the
transfer of real property to the City of Nenana. The
Alaska Railroad corporation is authorized to convey
the convey the interest in the surface estate of
approximately 188 acres of rail land to the City of
Nenana and provides for the legal descriptions of the
property conveyed.
Section 2 provides for an effective date under
AS.01.10.070(c).
1:59:55 PM
CHAIR MCCABE, as prime sponsor of HB 395, explained that the
City of Nenana has first rights of refusal; therefore, the bill
now references the City of Nenana first. He welcomed invited
testimony.
2:00:57 PM
JOSHUA VERHAGEN, Mayor, City of Nenana, gave invited testimony
in support of HB 395. He stated that prior to his involvement,
a former mayor had worked diligently to get this accomplished
and he thanked the Alaska Railroad Corporation (ARRC) for its
willingness to work with Nenana. He provided a history of
Nenana and how it was built as a railroad town, and that the
town had a long history of barging. He noted that Nenana had 13
years left on a lease with ARRC and he expressed the
difficulties in wanting to invest more in property and having to
pay more just to use the infrastructure. There are subleases on
the property as well, and there is significant interest from
other investors, he said, and the investors are anxious for the
City of Nenana to own the land. As for financial matters, he
explained the city had $10.5 million in debt when he took
office, but the debt has since been eliminated by 95 percent.
He stressed that HB 395 could help with the goal of becoming
debt free. He thanked the committee for the opportunity to
testify for the betterment of the community and the region.
2:07:39 PM
REPRESENTATIVE MINA questioned how Nenana had been working on
the purchase since the 1980s and what factors were behind the
delay.
MAYOR VERHAGEN responded that in the 1980s, the city put an
initiative on the ballot to take out a bond, which was supported
by the community. He said he was not sure of all the reasons
why a bill was never put forward, but a factor that may have
come into play was that there was an economic industry that
included the barge, and the revenue was substantial but did not
cover the cost of the lease; therefore, the city fell behind on
payments. He noted hesitation from the community in investing
in land owned by ARRC but offered his understanding that the
community would be more interested if the land were owned by the
city.
2:10:42 PM
CLINT HALL, Hall Quality Builders, Inc., gave invited testimony
during the hearing on HB 395. He provided a professional
background and history of his business' involvement throughout
the state. He noted the limited supply of logs and that in
Nenana, there appears to be a supply of timber and logs;
therefore, the timber supply is an attraction and the railroad
to Seward is as well, so they can get their patented product on
a barge, he stated. He added that barging on the river is also
an attraction related to affordable homes in the community, and
he offered his support of having a facility in Nenana. He
opined that it would create jobs and new companies on the road
system.
2:15:25 PM
CHAIR MCCABE commented that he saw the design of Mr. Hall's
homes and he described them as "fabulous." He added that the
company was well-poised to make a difference in the state.
2:16:07 PM
CHAIR MCCABE opened public testimony on HB 395.
2:16:29 PM
MICHAEL WALLERI, Attorney, Nenana Native Association, testified
in opposition to HB 395. He noted that there were many issues
that should be addressed. He referred to HB 199, which the
tribe would prefer, he said. He mentioned the right of first
refusal, but as the mayor had pointed out, the city is in breach
of its leases and from a legal standpoint, the right of first
refusal is dependent on them complying with the leases but they
are out of compliance. He noted the many reasons why the tribe
thinks it would be a better steward for the lands. Another
concern of the tribe he noted was the contamination on the fuel
docks causing much of the land to be contaminated, which
presents a health risk to the residents. He said the city
neither acknowledges that the contamination exists nor has a
plan to remediate it. He mentioned the various liabilities that
would stem from the clean-up. He stated the Tribe would prefer
cooperation, not litigation, to address the contamination.
2:21:33 PM
MR. WALLERI spoke to old letters of support and reiterated
addressing the contamination issues before discussing
redevelopment. The city has been in a state of decline due to
loss of port tenants and the population has dropped, which is
legally important, he explained, because it does not meet the
criteria to become a first-class city.
2:23:50 PM
CHAIR MCCABE requested that a report on contamination be
forwarded to him.
2:24:25 PM
ROMY CADIENTE, Administrator, Nenana Native Association,
testified during the hearing on HB 395. In relation to the fire
department being disbanded, he explained that the tribe supports
the fire department in salaries, purchases, and notably the
purchase of a new ambulance due to trips back and forth to
Fairbanks. He mentioned the Nenana bridge and that the tribe
has worked with the Department of Transportation and Public
Facilities (DOT&PF) to complete the project and the financial
reports. He stressed that the tribe sought to work with all in
a meaningful, cooperative, respectful way that benefits the
Nenana residents. He summarized accomplishments of projects in
which the Tribe had a part.
2:27:50 PM
CHAIR MCCABE, after ascertaining no one else wished to testify,
closed public testimony on HB 395.
2:28:34 PM
REPRESENTATIVE MINA asked Mayor Verhagen for his response to the
contamination issues and liability to the city and railroad.
MAYOR VERHAGEN replied that he was surprised by the accusations
being made because they have not been accurate in relation to
communication. On the environmental side of things, he said,
the City of Nenana is aware of the contamination which is due to
three fuel sites that were not operated by the city, and one
predated the city's lease. Monitoring is done every year, and
the city receives a report of any changes, he explained, and the
contamination is a concern of the city and would be addressed.
Grants and funds to clean up the issue are being looked into, he
noted, as well as collaboration with the railroad on this
environmental issue.
2:32:13 PM
The committee took an at-ease from 2:32 p.m. to 2:34 p.m.
2:34:01 PM
CHAIR MCCABE invited questions from committee members.
2:34:16 PM
REPRESENTATIVE VANCE inquired about the obligation of the
railroad to begin the conversation.
CHAIR MCCABE imparted that HB 395 would allow the sale of land
but not require it.
2:35:13 PM
BRIAN LINDAMOOD, Vice President and Chief Engineer, Alaska
Railroad Corporation, addressed Representative Vance and
explained that the bill as written is permissive for ARRC to
sell any property and does require a board of affirmative
action. Both the legislature and the ARRC board must approve,
he said.
REPRESENTATIVE VANCE brought up the [first right of refusal] for
the City of Nenana and inquired whether that was under ARRC's
purview.
MR. LINDAMOOD answered that he could not speak for the board on
its preferences. He noted that ARRC has been working with
Nenana for many years to come up with something that works.
REPRESENTATIVE VANCE asked for clarity on who legally has the
first right of refusal.
MR. LINDAMOOD said he did not have the lease in front of him,
but typically, the first right of refusal is in the lease
documents, and he would field the inquiry to Ms. Terry.
2:38:18 PM
REPRESENTATIVE C. JOHNSON said that he believed much of the
revenue generated from the railroad is from real estate
holdings, and he asked what kind of loss of revenue would be
generated and whether it would run afoul of the procurement
code.
MR. LINDAMOOD directed the inquiry to Ms. Terry.
2:39:47 PM
CHRISTY TERRY, Vice President of Real Estate, Alaska Railroad
Corporation, addressed Representative C. Johnson and confirmed
there were no other lands for sale at this time. As for the
procurement code, she said that the decision would rest with the
board.
REPRESENTATIVE C. JOHNSON recollected that there were parcels of
land on Ship Creek and there were attempts to purchase land in
that area, and he asked whether that was up for discussion and
if it could be included in this piece of proposed legislation.
MS. TERRY replied that the land is unique, and the railroad had
significant real estate holdings; therefore, selling land is
something the railroad does not take lightly (indisc. - noise
interference). She said much work would still need to be done.
REPRESENTATIVE C. JOHNSON asked what kind of lost revenue to the
railroad would occur after a sale.
MS. TERRY reiterated that the ARRC had significant real estate
holdings, but it would be something for the board to review and
take the totality into account.
2:44:42 PM
CHAIR MCCABE inquired about an agreement of terms between the
railroad and Nenana and whether that would cure the lease and
allow the city to maintain its first right of refusal.
MS. TERRY responded that there had been discussions, but nothing
had been finalized at this time. She said ARRC's legal team
could better speak to the terms.
2:45:38 PM
REPRESENTATIVE MINA asked for background as to why the railroad
decided not to sell the land after Nenana passed the bond
proposal in the 1980s.
MS CLEMENS replied that she did not know the backstory to why
that happened in the 1980s.
2:46:25 PM
REPRESENTATIVE VANCE moved to report HB 395 out of committee
with individual recommendations and the accompanying fiscal
notes.
2:46:41 PM
REPRESENTATIVE MINA objected.
A roll call vote was taken. Representatives C. Johnson, McKay,
Vance, and McCabe voted in favor of HB 395. Representative Mina
voted against it. Therefore, HB 395 was reported out of the
House Transportation Standing Committee by a vote of 4-1.