The Fairbanks North Star Borough Assembly’s Resolution 2010-10 is a request to transfer a tract of state-owned land to the borough so Pioneer Park can be expanded across the Chena and upriver on the north side, ending near Cushman Street. The state acquired this land when it purchased the Alaska Railroad from the federal government and this property remains in the state’s railroad’s land inventory.
Critics argue that the Alaska Railroad is a private corporation and the borough’s request is a government takeover of privately owned land. The argument is flawed. The railroad is a state-owned corporation having no formal stockholders, it pays no dividends, and it exists under the oversight of the Legislature. In reality, all Alaskans are owners.
Further, railroad land is exempt from local property taxes. Nominally, this taxfree privilege is limited to state and federally controlled lands and managed for the public’s collective best interest — recreational, income, protection, etc. Any income goes into the public coffers and theoretically reduces our tax burden. But state lands entrusted with the railroad are the exception. The railroad enjoys tax-free status while competing with the private sector. Property tax kicks in only if the property is leased to the private sector, and then it is the responsibility of the lessee.
This session, the Legislature recognized and addressed this status inconsistency by adopting HB 357, which encourages the Alaska Railroad Corp. to divest itself of all land not associated with tax-exempt railroad operations. Even though HB 357 is a bit ambiguous, it is a step toward a state land disposal policy for the railroad.
But HB 357 cuts both ways. It encourages outright sales to the private sector and gives leaseholders a first right of refusal. But by not limiting first rights to current leaseholders, HB 357 — perhaps inadvertently — created a loophole whereby one can gain preference rights by first entering into a lease and then exercising HB 357’s first right of refusal.
This loophole cracks the door for cronyism. The land requested by the borough to expand Pioneer Park is zoned General Use, which is incompatible for the anticipated public use.
Because it’s riverfront, the property is extremely attractive to private developers, and, using HB 357’s loophole, these unique and rare parcels could be rushed to private ownership and forever thwart its prime use — that of public enjoyment and community enhancement.
Also, there are several leased properties within the boundaries of the area being requested by the borough.
These leaseholders already have first purchase rights.
And no one should object should they exercise their rights. But it illustrates just how vulnerable the entire area is to development and underscores that if our community ever wants to expand Pioneer Park, now is the time to acquire the space while the remainder is still available.
Resolution 2010-10 puts the Alaska Railroad and the Legislature on notice of the borough’s interest in the remainder of these rare parcels.
Having dibs, can the borough afford to purchase? The railroad has always had the ability to transfer land to local municipalities — usually at the prompting of the Legislature. In Southcentral, such land has been donated for public recreational purposes. Railroad records show transfers within the Fairbanks borough have been limited to Geist Road’s right of way.
It’s probably unrealistic to expect the railroad to match the Pioneer’s original land gift for Alaskaland, but a symbolic token parcel from the railroad would be nice.
Better yet, a land swap provides a win-win solution.
Currently, the railroad is engineering a move out of North Pole to the Tanana River levee. Land the railroad will need from the borough exceeds the area the borough wants along the Chena River.
Plus, the borough has $1.8 million to sweeten the pot.
It comes from a legislative grant given to Ice Alaska for new facilities. But Ice Alaska’s future fell into limbo for want of a home; so their directors gave the funds to the borough. These funds can be used to reimburse the railroad for its investments, which include streets, utilities and a footbridge to Pioneer Park. And the borough could make a concessionaire agreement with Ice Alaska and assure ice carvers of the world a venue for their ice art.
It sounds easy, but the devil is in the details. And it’s these devils that will scuttle the concept unless all parties are focusing on the same goals. It’s up to all of us to make sure they are.
Bob Thomas of Fairbanks is a professional engineer.