House OKs Longer AK Railroad Land Leases (HB 314)
HB 314 gives ARR option to give 95 year leases to businesses, promotes long-term development and high-value buildings
Wednesday, March 14, 2012, Juneau, Alaska – Businesses on Alaska Railroad Corporation land, or prospective tenants, are one step closer to securing an incentive to invest in building improvements or construction thanks to a bill that passed the Alaska House today.
House Bill 314, sponsored by the House Labor & Commerce Committee, grants the Railroad the option to extend property lease terms from 55 to 95 years. Rep. Kurt Olson, the L&C Committee Chair, said legislators have heard from tenants or prospective tenants that it’s oftentimes hard to secure construction loans from lenders because the timetable for their leases isn’t long enough to invest in high-value construction or improvements.
“It comes down to planning,” Olson, R-Kenai, said. “Longer leases encourage high-value construction by assuring developers and financiers that the developments will retain their value for future buyers. The extension is a winner for the Railroad, the state and for leaseholders. Businesses want long leases to plant roots and we want the Railroad to generate more land lease revenues to stabilize their balance sheet in such a cyclical industry.”
The Municipality of Anchorage, the cities of Valdez, Seward and Whittier, as well as various leaseholders and developers throughout the Railbelt region support the bill.
HB 314 now moves to the Alaska Senate for consideration.