Community Perspective

It might appear that the Borough Assembly is strong-arming the Alaska Railroad Corp.

by asking the Legislature to transfer railroad riverfront property to the Fairbanks North Star Borough.

It might appear so. But it is not and here’s why.

By resolution, the assembly requested that all north-side riverfront land between Cushman Street and Peger Road under title to the state be transferred to the borough, including the property that Ice Alaska’s park sits on. The purpose of this request is to preserve the riverfront for public use and community enhancement — namely, to expand Pioneer Park into where Ice Alaska is, and will continue to be, if this land deal is approved. The remaining land is a strip that will protect the riverfront from being further inappropriately developed.

These particular parcels likely became federal railroad land when the feds took over the Tanana Valley Railroad, so it is a part of our history. Next, this land was transferred to the state when the railroad was purchased in 1985. The Alaska Railroad Corp. was formed and by default and became the owner-agency at that time. However, the Legislature retained ownership oversight of all corporation land.

Further, we should remember that the railroad is a curious animal with features of both a corporate citizen and a state agency, giving it a unique ability to take the persona of either to suit the circumstances.

But beneath it all, the railroad remains a stateowned corporation with no stockholders, other than the Legislature, which of course represents all of us.

The railroad has many parcels of land within our borough. They, like other state agencies, do not pay property taxes on land hosting direct agency operations or for any of their vacant land. If the railroad leases land to a private business, the lessee becomes obligated to pay taxes.

Not even the borough can easily show us just how much railroad land lies within the borough or its status. Unless the land is under lease, it is generally lumped with other state-owned parcels. The borough Web site shows approximately 390 parcels of state land linked to the railroad. Some of that is duplication, because the list contains both unique parcels and umbrella collections containing the unique parcels.

It ought to be clear by now that the public has a bona fide fiscal interest in railroad lands and a legislative voice on how they are used. Local government has the right to make this request. And it’s only prudent to do so when the lands border our most unique gift from nature — the Chena River.

It’s important that this transaction be done quickly. The railroad corporation has a few of the affected parcels under leases, which of course are legally binding. We would not expect otherwise. The troublesome part is that the railroad has leased one parcel for heavy industrial manufacturing.

Using a beautiful river front parcel for industrial purposes is 1950s mindset.

We can expect more of that if the railroad continues to be the owner agency.

I think it’s unnecessary to trade borough land for undeveloped railroad land, but I would not oppose an exchange should the borough chose to do so. However I strongly believe the railroad ought to be compensated for transactions containing parcels that are under lease or where the railroad has made substantial investments. Both apply to some of these riverfront parcels.

The railroad has records showing investment costs; and the present worth of leases can be easily computed. Once calculated, these values represent the worth of the property to be traded by the borough.

Once traded, the borough would become the landlord of current leases. Any other concept ends up legally messy.

This equitable concept allows the borough to continue collecting taxes and, as landlord, to collect rent payments. I would suggest that all rent payments be dedicated to enhancing these riverfront properties.

It also allows the borough to negotiate directly with the leaseholder to better buffer the riverfront, and of course, when the lease ends, convert the land to a more compatible land use.

It would please the community if the railroad were to support the borough’s request. It gives them an opportunity to gain borough land needed for pending rail realignments and more importantly, a chance to commemorate their corporate service and contribution to community enrichment — the hallmark of a proud corporate citizen. Plus, it would allow Pioneer Park to grow and assure Ice Alaska that they’ll always have a home.

Bob Thomas of Fairbanks is a professional engineer and member of the Railroad Safety and Development Group, an ad hoc organization focused on Fairbanks economic issues.