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Fairbanks Assembly Approves Land Sale to Chena Hot Springs Resort

By | November 15, 2013

The Fairbanks North Star Borough Assembly voted during their regular meeting Thursday to approve a land exchange sale between the Borough and Chena Hot Springs Resort.

It’s a deal that’s been in the works for more than a decade.  It stalled earlier this year after a disagreement over the appraised value of the property.

Assemblyman Michael Dukes has been unhappy with the negotiations to sell nearly 1,500 acres of Borough property to Chena Hot Springs Resort for most of the year.

“I cannot support it based on all the shenanigans,” he said.  “Even just the appearance of shenanigans in my opinion at this point.”

Resort owner Bernie Karl originally agreed to purchase the land at fair market value. The property was appraised at $390 per acre in the spring, but Karl told the Assembly he didn’t believe he was getting a fair deal.

In July, Borough Mayor Luke Hopkins’ administration proposed an ordinance that applied a credit of more than $282,000 to the total purchase price for improvements and access easements.

Dukes says the credit fundamentally changes the terms of the original purchase agreement.

“The whole reason this land sale exchange has gone forward as an exchange was because there was something being offered and it was the easements,” he told the Mayor. “The access at no costs to the borough, meaning they weren’t going to get a credit for it.”

Lance Roberts offered an amendment to raise the purchase price of the land based on his estimation that trail improvements made by the Resort, would directly benefit Chena Hot Springs.

“There’s going to be more public out there using those trails and this is going to get the resort more business because of a better trail system out there,” Roberts said.

The amendment failed after a lengthy debate.

John Davies pointed to the Resort’s reputation arguing that what’s good for the Resort is also good for the Borough.

“The role that Chena Hot Springs has played in increasing winter tourism in this town is in no small measure due to the marketing and attraction that the Karl’s have created out there at the Hot Springs,” Davies said.

In his closing remarks, Presiding Officer Karl Kassel told the assembly he believes negotiations went poorly, but he doesn’t think either party could have fared better.

“The bottom  line for me is that we’ve gotten to what I feel is probably a fair price for the property and it’s within our best interest to move forward even though I’m not happy about the process of how we got here,” Kassel said.

The Resort will pay more than $297,000 for the land with 10 percent down at 6 percent interest over 15 years.  The Borough will survey the boundary at a cost of $15,000.

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