Senate passes Petersburg land grant bill

The Petersburg Borough with its final boundaries. (File photo)
The Petersburg Borough with its final boundaries. (File photo)

Legislation to increase the Petersburg Borough’s land grant from the state passed the Alaska Senate on Monday (April 10). The bill would transfer more than 14,000 acres to the new borough, which hopes to develop or sell off some of the property.

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Senate Bill 28 was heard in the Senate Resources committee. It and a companion bill in the House would grant 14,666 acres of state land to the borough government. As part of the process of borough formation, Petersburg is entitled to 1,439 acres under state law but is asking for more.

Resources committee member Anchorage Republican Senator Kevin Meyer wondered about justifying such a land grant.

“I’m not so concerned about the number of acres but the value of acres because like you said we’re in tough times, in Petersburg, but we are as a state as well,” Meyer said. “So for me to go back to my hometown of Anchorage and say well we just gave $68 million worth of land to the Petersburg borough, we have to justify that in these time when we’re $2.8 billion in the hole.”

The state’s Department of Natural Resources values the full 14,666 acres that Petersburg is seeking at $5,375 an acre or a total of more than $78 million. Taking out the entitlement the borough already is allowed, the additional land Petersburg wants is valued at more than $68 million. Under the bill Petersburg would be granted 95 percent of the available state land in the borough that hasn’t been designated for another use.

Marty Parsons, the deputy director of the state’s Division of Mining Land and Water said the lands sought by Petersburg were a mix of parcels close to Petersburg and further out in the borough. “They’re settlement lands, they’re lands that the state would have developed material sites on for road construction,” Parsons said. “It has some timber to the lands. And there is some muskeg involved but it’s quite a varied variety of lands but there are some areas that have relatively high value residential subdivisions.”

Petersburg officials say the increased acreage would be more on par with legislative land grants for other municipalities. 15 of the other 18 boroughs in Alaska have received land grants through the legislative process. Haines and Wrangell were the most recent in 2010.

Petersburg’s community and economic development director Liz Cabrera told the committee that the land could help diversify Petersburg’s economy.

“You know there’s some remote property,” Cabrera said. “It may be suitable for development for tourism opportunity. There’s also some property that could be available for resource development, specifically sand and gravel.” Other land could be sold for residential homes, increasing the property tax base for the borough.

The bill’s sponsor, Sitka Republican Senator Bert Stedman, who grew up in Petersburg, also told the committee that some of the lands had a history of use already. He pointed to Whitney Island near the mainland north of Petersburg.

“Whitney Island used to have a post office,” Stedman said. “There used to be families living there a hundred years ago, or even less than a hundred years and now it’s all just grown over. So some of this land has been used before. In fact there’s remnants of the old fox farm rail road, little funky railroad that went around the island to feed the minks, when you go in there and anchor up. So it’s very suitable land for anchorage, for boats and potential development.”

Petersburg officials are hopeful the bill could pass this session. The transfer of lands could take years after that.

So far there’s been little opposition from legislators. The city and borough of Juneau, which sued over the northern boundary of Petersburg’s borough, has supported the legislation to transfer the additional state land to Petersburg.

After moving out of the Senate resources committee, the vote on the Senate floor was 20 in favor and it next moves onto the House for consideration.