Version C


INTRODUCED BY: Assembly Member Jim Caswell







BE IT ENACTED by the Assembly of the Denali Borough, Alaska that:


Section 1.  Classification.  This ordinance is of a general and permanent nature.


Section 2.  Purpose.  Under Title IV, Chapter 23, Section 7 of the Denali Borough Code of Ordinances, the Denali Borough is authorized to obtain lands for industrial purposes which will benefit the Borough.  Pursuant to an action of the Alaska State Legislature, the uncodified law of the State of Alaska was amended to allow the Denali Borough an opportunity to obtain land from the State for economic development; specifically, land to support the design, construction, development, operation, and maintenance of a railroad and facilities to support such a development project from near Healy, Alaska to the eastern boundary of Denali National Park and Preserve.  This ordinance provides the means for the Borough to explore this economic development opportunity.


Section 3.  Applicability.  Implementation of this ordinance will create a new chapter, Chapter 28 of Title IV of the Denali Borough Code of Ordinances, and will provide for a study and granting of State land to the Borough for a railroad and utility corridor for economic development.


Section 4.  Authority.  An uncodified law of the State of Alaska, HB 244, Denali Borough Code of Ordinances, Title IV, Chapter 23, Section 7.


Section 5.  Study Implementation.  The Denali Borough has an interest in providing diverse economic opportunities within the Borough for the benefit of the Borough as well as its citizens.  HB 244 provides that the State of Alaska, Department of Natural Resources shall grant the Denali Borough up to 3,500 acres of state land for the purpose of enabling Kantishna Holdings, Inc. and its successors and assigns in interest (hereinafter KHI) to create a specific economic development project.


In conformance with HB 244, and in recognition of the Borough’s desire to insure that any economic development opportunity be properly developed in accordance with applicable law and regulation, the Borough hereby authorizes KHI to analyze and identify a railroad and utility corridor which runs from near the community of Healy, Alaska to the eastern boundary of Denali National Park and Preserve.  KHI’s efforts are to include analysis of construction options, safety and environmental considerations for the proposed railroad utility corridor.  Where appropriate, KHI shall identify required ancillary land which may be required to support economic development in conjunction with the railroad development project.


Section 6.  Study Costs.  KHI is to pursue this effort for the mutual benefit of KHI and the Borough.  KHI will undertake this effort at its own expense provided, however, that when the Borough becomes the owner of the railroad corridor, and executes a lease with KHI, study costs incurred by KHI directly related to the economic development project [shall] may be partially credited against any future lease payments, rents or fees, or revenue generating agreements established by and between the Borough and KHI.  The incentive credit shall not exceed fifty percent (50%) of any payments or fees owed the Borough and shall be eliminated after ten years.  The Denali Borough advises KHI that there is an ongoing concurrent analysis under way under the Transportation Equity Act which is evaluating northern access routes into Denali National Park and Preserve.  The Denali Borough recommends that to the extent practical, KHI utilize such information as is generated from the northern access route study.


Section 7.  Identification of Valid Property Rights. KHI shall contact the State of Alaska, Department of Natural Resources within 180 days of passage of this ordinance and work with the Department, as required by HB 244, to identify all valid property rights on the following described land over which the railroad and utility border may pass: 


Township 12 South, Range 7 West, Range 8 West, Range 9 West, Range 10 West, and Range 11 West, Fairbanks Meridian.


Section 8.  Time to Complete Study and Route Selection/Reporting.  KHI shall complete its analysis on route and land identification as well as legally applicable environmental, construction and safety concerns as soon as reasonably possible and in no event later than September 1, 2009.  KHI shall provide the Borough, at least annually, written reports of its efforts being pursued in conformance with this ordinance and of its tentative and ongoing findings.


Section 9.  Grant of Lease Right.  In consideration of the foregoing by KHI, the Denali Borough shall grant to KHI the exclusive right to demonstrate to the Denali Borough that the project along the identified lands has addressed economical feasibility, environmental soundness and physical safety.  KHI shall have until September 1, 2009 in which to consummate a lease with the Denali Borough for the construction of the economic development/railroad project as identified by HB 244.  The lease shall be for a period not to exceed 55 years, with one renewal option not to exceed 20 years on such terms as are mutually agreeable between KHI and the Borough.  In the event that the Borough and KHI do not have a lease in place by September 1, 2009, then the Denali Borough shall have the opportunity to use the information provided to it by KHI in accordance with this ordinance to negotiate with any additional third parties who may have an interest in pursuing the economic development opportunity represented by this ordinance and HB 244.


The entering into a lease agreement contemplated herein will be subject to a separate ordinance at the time of negotiation. 


Section 10.  Effective Date.  This ordinance becomes effective upon adoption by the Denali Borough Assembly and signature of the Mayor.


                                                DATE INTRODUCED:  December 11, 2002


                                                FIRST READING:  December 11, 2002


                                                PUBLIC HEARING:________________________



PASSED and APPROVED by the DENALI BOROUGH ASSEMBLY this ____ day of ______________, 2002.







ATTEST:                                                       _____________________________

                                                                                    Borough Clerk