04/09/2003 09:05 AM Senate FIN

                                                                                                                                
     SENATE BILL NO. 153                                                                                                        
     "An Act authorizing a long-term lease of certain Alaska                                                                    
     Railroad Corporation land at Anchorage; and providing for an                                                               
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken explained  that this legislation  "would allow  the                                                            
Alaska Railroad  to lease certain corporation land  in Anchorage for                                                            
a period  in  excess of  55 years  without  reserving  the right  to                                                            
terminate the lease."                                                                                                           
                                                                                                                                
RICHARD SCHMITZ,  Staff to Senator John Cowdery, explained  that the                                                            
purpose  of  this   legislation  is  to  allow  Alaska  Enfranchise                                                             
Facilities, Inc  to build a multi-family, senior housing  project on                                                            
leased  Alaska  Railroad  land  on  Government  Hill  in  Anchorage,                                                            
utilizing a federal Housing  and Urban Development (HUD), Section 2,                                                            
grant.  He continued that  "the way  the law now  reads, the  Alaska                                                            
Railroad  can approve  leases in excess  of 55  years; however,  the                                                            
railroad  must reserve  the right  to terminate  the  leases in  the                                                            
event  the  land is  needed  for  railroad  purposes."  However,  he                                                            
continued,  recently enacted federal  regulations require  a minimum                                                            
75-year lease,  and in  order to accommodate  this grant's  timeline                                                            
requirement, this  bill seeks to remove the termination  clause from                                                            
the lease agreement.  He noted that State statute  allows the Alaska                                                            
Railroad to request this  language exemption as exampled by previous                                                            
legislation, CS HB 344(FIN) [copy on file].                                                                                     
                                                                                                                                
Mr.  Schmitz noted  that  Alaska Enfranchise  Facilities,  Inc.  has                                                            
received  a  55-year   lease,  but  requires  this  legislation   to                                                            
accommodate the federal grant provisions.                                                                                       
                                                                                                                                
                                                                                                                                
SFC 03 # 43, Side B 09:52 AM                                                                                                    
                                                                                                                                
                                                                                                                                
MARC  MARLOW, Alaska  Enfranchise  Facilities,  Inc., testified  via                                                            
teleconference  from Anchorage  to explain  that Alaska Enfranchise                                                             
Facilities, Inc (AEF) is  a 501-C3 non-profit entity, which proposes                                                            
to construct senior  housing on the property it is  leasing from the                                                            
Alaska Railroad. However,  he continued, in order to qualify for two                                                            
federal  grants to  fund the  project, a  75-year lease  must be  in                                                            
place.                                                                                                                          
                                                                                                                                
SUSANNE DIPEITRO,  Co-President, Government  Hill Community  Council                                                            
(GHCC),  testified  via  teleconference   from  Anchorage  to  voice                                                            
concerns regarding  this lease. She informed the Committee  that two                                                            
entities were  interested in leasing  the land and applying  for the                                                            
HUD grants; and,  she opined, Mr. Marlow signed the  lease paperwork                                                            
with the knowledge  that the 55-year  lease did not qualify  for the                                                            
HUD grant.  Now, she continued, after  eliminating "the competitive                                                             
process," he is  "asking for you to essentially change  the terms of                                                            
the  lease,"  so that  he  can  qualify  for money  that  the  other                                                            
applicant does not have the benefit of."                                                                                        
                                                                                                                                
Ms. DiPeitro  continued that the GHSS  would like to participate  in                                                            
the  discussion  regarding  what is  constructed  on the  site.  She                                                            
continued that  she has furthered this request with  Mr. Marlow, and                                                            
she voiced  that "an understanding"  about this communication  could                                                            
be  possible;  however, she  stated,  the  Community Council  is  on                                                            
record in opposition to this legislation.                                                                                       
                                                                                                                                
Co-chair  Wilken noted  that  the Committee  has a  letter [copy  on                                                            
file] from the GHSS, dated  March 21, 2003, stating its position. He                                                            
specified  that  the  information  supplied  by  Alaska Enfranchise                                                             
Facilities,  Inc.  titled  "Providing  safe,  Clean  and  affordable                                                            
Housing for Alaskan Seniors"  [copy on file] has also been received.                                                            
                                                                                                                                
Co-Chair  Green asked  Mr. Marlow  for information  regarding  other                                                            
legislation that he has previously submitted to the Legislature.                                                                
                                                                                                                                
Mr. Marlow responded  that he was involved in legislation  "to amend                                                            
Alaska Statute  45 that would have allowed municipalities  to extend                                                            
property tax relief to  projects that would provide for facilitating                                                            
urban redevelopment."                                                                                                           
                                                                                                                                
Co-Chair  Green asked  the  name of  the building  that legislation                                                             
involved.                                                                                                                       
                                                                                                                                
Mr.  Marlow  identified  the  building  as  the  McKay  Building  in                                                            
downtown Anchorage.                                                                                                             
                                                                                                                                
Co-Chair  Green asked  whether the  previous  request involved  more                                                            
than one piece of legislation.                                                                                                  
                                                                                                                                
Mr. Marlow  stated that the bill was  introduced in one Legislative                                                             
session,  but was not acted  upon. Therefore,  he continued,  it was                                                            
re-introduced the following session.                                                                                            
                                                                                                                                
Co-Chair Wilken ordered the bill HELD in Committee.