City and Borough of Juneau Docks and Harbors board members discuss a lease extension agreement with the University of Alaska Southeast during its Thursday evening meeting. The agreement would include the city offering a variety of “education benefits” to university students in exchange for a less than fair market value annual lease cost. (Clarise Larson / Juneau Empire)

City and Borough of Juneau Docks and Harbors board members discuss a lease extension agreement with the University of Alaska Southeast during its Thursday evening meeting. The agreement would include the city offering a variety of “education benefits” to university students in exchange for a less than fair market value annual lease cost. (Clarise Larson / Juneau Empire)

Board approves hefty benefits to UAS in exchange for land lease extension

Free Eaglecrest lift tickets, bus passes to students OK’d by Docks and Harbors.

The City and Borough of Juneau Docks and Harbors Board has agreed to offer a variety of “educational benefits” to the University of Alaska Southeast in exchange for a lease extension for a valuable piece of waterfront land it has rented from the university for decades.

Some of the benefits agreed upon by the city include offering UAS students free Eaglecrest Ski Area lift tickets and discounted gear rentals, no-cost bus passes and no-cost access to city pools, fieldhouse and ice rink.

The parcel of waterfront land is located off Egan Drive and across the street from Juneau-Douglas High School: Yadaa.at Kalé, between Harris and Aurora harbors. The parcel is home to the Juneau Fisheries Terminal, a centralized location that commercial fishermen often use to move products and change fishing gear.

According to Carl Uchytil, port director for CBJ, the city essentially manages the area and operates a crane dock which is considered to be critical for boatyard activity and the commercial fishermen that frequent the area.

The city has leased and conducted operations on the parcel since 1988 and has been able to do so while only having to pay the university around $12,000 per year — considerably low compared to its current annual estimated fair market value of $230,400 and an assessed value of around $2.8 million.

The low cost to the city was negotiated between the two entities back in 1988 when the city offered UAS a $500,000 grant for the construction of the Egan Library in exchange for the favorable lease agreement.

However, after 33 years that lease is set to expire on May 4, and instead of the university continuing to offer the parcel to the city for $12,000 per year, the university proposed an amended lease that offers a one-time, four-year lease extension for $100,000 per year with the agreement that “education benefits” are then offered by the city.

That $100,000 per year will be pulled from the Docks and Harbors budget.

According to Uchytil, the “education benefits” were negotiated to essentially lower the annual cost of the parcel below its estimated fair market value of $230,400.

The benefits outlined in the agreement include:

■ Free Eaglecrest Ski Area lift tickets and 50% gear rental to UAS students.

■ No-cost bus passes provided to UAS students.

■ No-cost student access to city pools, fieldhouse and ice rink.

■ Internship opportunities offered to students pursuing outdoor recreation degrees.

■ No-cost snow removal provided by the city at the UAS downtown UAS Technical Education Center facility.

■ No-cost kayak storage and launch services at Don D. Statter Harbor.

■ Paid maritime internships to a minimum of three UAS students.

Uchytil said it has long been in Docks and Harbors’ interest to purchase the property, but UAS has not been willing to agree to sell as he said it’s still deciding if the decision is in its best interest.

“We can’t force them — it’s their property — and they own it and they don’t have to sell it to us,” he said. “I don’t like it, but it’s certainly their call.”

The decision to approve the agreement was met with reluctance and disappointment from the board Thursday night, with members expressing their dissatisfaction with the university’s unwillingness to sell the property, along with concerns about the general unknown state of what will happen in four years when the lease extension expires.

On Wednesday during the Assembly Finance Committee meeting, where the topic was briefly discussed, Mayor Beth Weldon shared similar views and said the increase to $100,000 per year is “way too high” for her satisfaction, and she was not in favor of the agreement.

“I have a problem with that, and I think they’re trying to play hardball with us,” she said.

However, the decision does not fall on the mayor or Assembly members, Uchytil explained, because the decision is a lease amendment, not a new lease, so the responsibility falls on the board and city manager.

Michael Ciri, vice chancellor of administration at UAS, said the decision to extend the lease for just four years is to allow for the university’s incoming chancellor to be involved in what the university wants to do with the parcel long-term. He said nothing is set in stone for what the university plans to do at this time.

“We certainly could sell the land, but it’s not clear right now that is something that would be in our long-term interest, but it’s not clear that it couldn’t be,” he said. “It would be premature to sell it a month before the chancellor arrives and it’s important to know what the new chancellor’s vision will be for UAS and for the downtown facility.”

Ciri also noted that when the topic was discussed by the UAS Board of Regents, members expressed “skepticism” about whether selling the land to the city would be in the university’s best interest in the long-term.

“There’s a reason why the city wants it, it’s a strategic piece of land, and I think the board would want us to have a compelling argument why it would be in the institutions best interest to sell it — so we will be looking for what is in our best long-term interest,” he said.

The agreement still requires final approval by City Manager Rorie Watt, who is expected to receive it from the board in the coming days.

Contact reporter Clarise Larson at clarise.larson@juneauempire.com or (651)-528-1807.

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