DENALI BOROUGH, ALASKA

RESOLUTION NUMBER:  02-01

 

A RESOLUTION SUPPORTING LEGISLATION AUTHORIZING THE ALASKA RAILROAD TO LEASE LAND FOR 55 YEARS.

 

 

WHEREAS, legislation authorizing the Alaska Railroad Corporation (ARRC) to lease land for 55 years will cultivate economic development in Alaska communities along the railbelt by making commercial and residential development on ARRC lands more feasible; and

 

WHEREAS, ARRC’s current statutory limit is a 35 year lease.  Proposed legislation would amend AS 42.40.285 (4) enabling the ARRC to lease lands within its Anchorage, Fairbanks, Seward and Healy Terminal Reserves for up to 55 years rather than 35 years without first gaining legislative approval.

 

WHEREAS, today, ARRC can extend lease beyond 35 years subject to a termination clause defined by AS 42.40.285 (4).  The clause states ARRC can terminate any lease with a term in excess of 35 years in the event the land is needed for railroad purposes after the initial 35 years; and

 

WHEREAS, financial lenders are reluctant to lend on large scale projects requiring substantial equity when there is no guarantee the land will be available beyond 35 years; and

 

WHEREAS, ARRC’s statutory constraints limit the ability for developers of large scale commercial and residential projects to secure financing because certain banking regulations require ground lease maturity to exceed loan maturity by 10 years; and

 

WHEREAS, when developers provide significant infrastructure or operational improvements, it is beneficial to have a lengthened lease term allowing companies to amortize debt over a longer span of time; and

 

WHEREAS, increasing the lease term to 55 years would increase financing options, and therefore investor interest.

 

WHEREAS, this change would result in increased business activity on railroad property by making improvements more attractive to investors/users.  This also creates long term benefits to the surrounding communities by providing and economic and tax base.

 

NOW, THEREFORE BE IT RESOLVED that the Denali Borough views legislation authorizing ARRC to lease land for 55 years as an important step toward promoting economic development in railbelt communities where certain high value Railroad lands are currently underdeveloped.

 

NOW, THEREFORE BE IT RESOLVED, that the Denali Borough supports and seeks to assist ARRC in obtaining legislative approval to lease land for up to 55 years in its Seward, Anchorage, Healy and Fairbanks Reserve Lands.

 

PASSED and APPROVED by the Denali Borough Assembly this 13th day of January, 2002.

 

 

 

SIGNATURE ON FILE

Mayor

 

SIGNATURE ON FILE

Attest                                             Borough Clerk