HomeMy WebLinkAboutRes2001-136
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CITY OF SEWARD, ALASKA
RESOLUTION 2001-136
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, 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 Tenninal Reserves for up to 55 years rather than 35 years without first gaining legislative
approval; and
WHEREAS, today, ARRC can extend leases beyond 35 years subject to a tennination clause
defined by AS 42.40.285 (4). The clause states ARRC can tenninate any lease with a term in excess
of35 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 oftime; and
WHEREAS, increasing the lease term to 55 years would increase financing options and,
therefore, investor interest; and
WHEREAS, this change would result in increased business activity on railroad property by
making improvements more attractive to investor/users. This also creates long term benefits to the
surrounding communities by providing an economic and tax base; and
WHEREAS, the proposed legislation would make ARRC's leasing practices more consistent
with other state agencies. The University of Alaska and the Department of Natural Resources can
both lease land for up to 55 years.
CITY OF SEWARD, ALASKA
RESOLUTION 2001-136
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City of Seward 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.
Section 2. The City of Seward 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.
Section. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 22nd
day of October, 2001
THE CITY OF SEWARD, ALASKA
Le-, I ~ .-f.-1-1 ~-J
Edgar Blatchford, Mayor
AYES: Blatchford, Brossow, Branson, Calhoon, Clark, Orr, Shafer
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
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