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.