HB 306-CONVEY HATCHER PASS TO MAT-SU BOROUGH CO-CHAIR RAMRAS announced that the next order of business would be HOUSE BILL NO. 306, "An Act making certain land available for selection by the Matanuska-Susitna Borough." CO-CHAIR SAMUELS moved to adopt the committee substitute (CS) HB 306, labeled 24-LS0907/F, Bullock, as a working document. Hearing no objection, Version F was before the committee. 2:35:23 PM REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, said he introduced HB 306 at the request of the Matanuska-Susitna Borough regarding "the ski and resort development project that the borough has been advancing for a number of years." It is not without criticism, including his own, he stated. The area became a public-use area in the 1970s with broad community support. He noted that he wanted to make changes to the bill to include setbacks from the river and to require a public vote. He said he is the facilitator, and the advocates for the borough and the developers will speak with more passion than he has. The project has been talked about "for a number of years." 2:38:22 PM RON SWANSON, Director, Community Development, Matanuska-Susitna Borough, said the bill would make 200 acres available under the municipal land entitlement, which has not been fulfilled from the promise made by the legislature back in 1979. This 200-acre piece is important to economic development, he opined. The land transfer is consistent with the Municipal Land Act, but it is a public-use area, so it takes action by the legislature. The public-use area is 5,200 acres and was established for recreation, fish and wildlife, and water quality protection. The area follows the Susitna River from the Hatcher Pass area to its headwaters. The Matanuska Moose Range is to the east. 2:41:06 PM MR. SWANSON said the Hatcher Pass Management Plan was amended in 1989 to provide for a ski area and residential and commercial development. A lease was issued to a Japanese firm and it included the land in HB 306. The state turned over the development to the borough, which has assumed complete management and ownership for the lease. He said he wants to make sure Hatcher Pass is developed in a way to protect the environment and the public-use area "even if it is excluded from the area." He said the borough is in the final stages of adopting a special land use district, which will include setbacks of at least 200 feet from the [Little] Susitna River-a goal of Representative Stoltze. He said the borough has been doing water monitoring to establish baseline information. The special use area was developed by a wide variety of citizens, and full public participation will continue. A master plan will be developed by the developer and then be approved by several entities, he explained. There are strict development guidelines including densities. Open areas and greenbelts are included, he noted. The legislation states that the transfer of the land will be subject to the Hatcher Pass Management Plan. All current protections, other than the development, will continue, he said. The alpine ski area will be located in the northern portion of the Hatcher Pass area. The housing development has been moved away from the river to the Nordic ski area, which will be a world-class facility, he stated. 2:45:16 PM MR. SWANSON said, "This piece is very key to the development in that...it will be actually the gateway to the southern portion of Hatcher Pass." Other access points don't provide the same visual impact, and billboards "will never happen." The bill will consolidate management to just the borough. He said the borough will continue to manage the Hatcher Pass area with the Department of Natural Resources, but for development, it is difficult to work with a variety of entities. REPRESENTATIVE SEATON asked about the land remaining under the Hatcher Pass designation, which he doesn't see in the bill. 2:47:42 PM MR. SWANSON said the conveyance of the land would require it to be consistent with the Hatcher Pass Management Plan throughout. He said he supports that, and it goes farther with more restrictive zoning in certain ways. REPRESENTATIVE GATTO asked about the southern boundary. MR. SWANSON referred him to a map showing the Nordic and residences in the southern portion and the alpine area to the north without residences but with an Alyeska-type operation. 2:50:10 PM JOHN DUFFY, Manager, Matanuska-Susitna Borough, said the borough supports HB 306, as written, because it provides lands for development and a Hatcher Pass ski area. The project fulfills municipal entitlement for economic development, diversification of the tax base, and recreational opportunities. Electrical power has been installed, and the project will provide a return on those investments, he stated. He said the borough has completed an economic analysis showing 360 jobs provided by the ski area and 1,350 jobs for the south-side development. There will be a special-use district with a setback from the Little Susitna River. He opposed a proposed amendment on a public vote because "it might send a chill in other economic development projects in the borough. For instance, we have the Lucky Shock Mine that is currently being reviewed and proposed for development." He spoke of a port at Pt. McKenzie that the public would not have voted for. He is against that requirement because there has been "more than enough public participation." 2:53:47 PM REPRESENTATIVE GATTO asked if the land transfer is essential for the project. MR. DUFFY said that is correct; the private developer said that the land is needed for access and development. REPRESENTATIVE GATTO asked about the setback to the river. MR. DUFFY said the borough has a 75-foot water body setback, and the Hatcher Pass Management Plan already has a 200-foot setback. 2:55:14 PM REPRESENTATIVE CRAWFORD asked if the 200 acres will be transferred to the borough which will then transfer it to JL Properties for residential home building. MR. DUFFY said that is correct, in part. He added that some of the areas would be used for access, and there are hopes for the development of picnic areas near the river. REPRESENTATIVE CRAWFORD asked if the property will be sold or given to JL Properties. MR. DUFFY said it is a little bit of both. Some of the property will be retained in borough ownership, and the residential development property would be transferred to JL Properties. 2:57:08 PM REPRESENTATIVE SEATON asked if the land within the setbacks can be transferred. MR. DUFFY said it could be transferred but not developed. REPRESENTATIVE GATTO asked how much land will JL properties get. MR. DUFFY said he doesn't know exactly, but it will be about 20- 25 percent of the transferred land. REPRESENTATIVE GATTO asked if the current access to the area will be affected. MR. DUFFY said no. 2:58:49 PM JEAN WOODS said she worked on setting up the special use area many years ago. She said JL properties can "do their development without this 200 acres." She was told they only wanted about 25 acres of this parcel for the commercial development, "and I told them if they would leave the 200 acres alone, that I would drop all opposition to this project." She sees this as taking land from the public to convey to a private developer. She said the project can be done without this land. She said if the developers get it, she wants a 600-foot setback so their village center would not be visible from the road. REPRESENTATIVE GATTO asked if she meant the road or the creek. MS. WOODS said if there is a 600-foot setback from the creek, the development could not be seen from the road. 3:01:41 PM ROB WELLS, Executive Director, Matanuska-Susitna Resource Conservation and Development Organization, said his organization supports this project. The economic spin-off and recreation opportunities are the driving reasons for the support. The special planning effort is making the development standards stricter than the plan. Allowing an alternate access will minimize the impact in the nearby neighborhood, he opined. The ski area project will affect a few thousand acres, and there are still over 200,000 acres of public use land to the north. To the east is the moose range that is 150,000 acres, he stated. 3:03:49 PM DAVID GERMER, Project Manager, Hatcher Pass Project, JL Properties, said his company was solicited to create a ski area, so JL Properties developed a preliminary plan composed of three pieces: alpine area, residential/recreational area, and a Nordic area. The three need to be integrated for each piece to succeed, he opined. The additional 200 acres is necessary for financial viability. He said, "JL will actually be developing very specific CR&Rs for development within this area...to insure integration of the new buildings, the infrastructure, the landscaping into their natural settings." He said the next step is to initiate due diligence, and he would like to start that work this summer to begin construction by the spring of 2008. 3:06:52 PM RICK THOMPSON, Acting Deputy Director, Division of Mining, Land, and Water, Department of Natural Resources, said he has been involved "over the years," and DNR supports the legislation. CO-CHAIR SAMUELS asked about an amendment for a 1000-foot setback on the [Little Susitna River]. MR. THOMPSON said he doesn't have a problem with setbacks, per se, but he has not seen the amendment. 3:08:33 PM ROD ARNO, Alaska Outdoor Council, said the council opposes the bill because urban sprawl in nearby areas makes Hatcher Pass "extremely important to us." He said the state land should remain as state land. Public access has been better with the state rather than the borough and its lakes management plan. REPRESENTATIVE GATTO asked if the borough and the state have had different positions on lake access. MR. ARNO said lakes management plans are incorporated into the borough's coastal management plan. In the past, people who own property on a lake can vote to make the lake non-motorized. He was told that the state couldn't assert its authority without suing the borough. REPRESENTATIVE GATTO asked if the land would have grandfathered rights for access. 3:12:38 PM MR. ARNO said that is a major concern, and the access rights to the Knik River public use area are cumbersome. He doesn't know if traditional access will be protected or not. REPRESENTATIVE GATTO said Ms. Woods testified that the developers don't need 200 acres. MR. ARNO said he doesn't want to give up an inch of state public use areas close to urban areas. REPRESENTATIVE STOLTZE asked about his proposed amendments requiring the set back and a public vote. MR. ARNO said he supports the set backs and the public vote. The committee took an at-ease from 3:15:58 PM to 3:19:20 PM. CO-CHAIR SAMUELS offered Amendment 1, written by the sponsor as follows [original punctuation provided]: Page 2, following line 22, following: Insert a new subsection to read: "(d) That portion of the land selected under (b) of this section that lies within 1,000 feet of the line of ordinary high water of the Little Susitna may not be developed or improved." REPRESENTATIVE SEATON objected and offered a conceptual amendment to Amendment 1 to change the 1,000-foot setback requirement to 600 feet. He said, "And on line 5, after 'may not be improved' inserts 'except for trails and may not be transferred from public ownership'." Hearing no objections, the amendment to Amendment 1 was adopted. 3:20:25 PM REPRESENTATIVE SEATON withdrew his objection, and a roll call vote was taken on Amendment 1. Representatives Gatto, Crawford, Olson, Ramras, and Samuels voted in favor of the amendment. Amendment 1, as amended, was adopted by a vote of 5 to 0. CO-CHAIR SAMUELS offered Amendment 2, as follows [original punctuation provided]: Page 2, line 7, following "(b)": Delete "The" Insert "Subject to authorization by a majority of the qualified voters in the borough voting on the question at a general or special election, the" REPRESENTATIVE CRAWFORD asked if a vote will delay the project. REPRESENTATIVE STOLTZE said a borough election and primary election are coming up; it could be put on a number of local or state elections. He added that it is a multi-tier process of significant scope. It is exciting project, but not without some controversy so it merits local discussion, including the financial involvement of the local government and other issues. 3:24:51 PM CO-CHAIR SAMUELS asked if the vote could occur at another point in the process rather than during a simple land transfer from the state to the borough. The vote would really be about the ski area, he explained. REPRESENTATIVE STOLTZE said not that he has any control over. REPRESENTATIVE GATTO said the bill refers to a general or special election. REPRESENTATIVE STOLTZE said his legal advisors said that general election covers all elections. 3:27:27 PM Hearing no further objections, Amendment 2 carried. REPRESENTATIVE GATTO moved to report HB 306, labeled 24- LS0907/F, Bullock, 2/1/06, as amended, out of committee with individual recommendations and the accompanying fiscal notes. Hearing no objections, CSHB 306 (RES) passed out of the House Resources Standing Committee. 3:28:53 PM