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House Passes Railroad Lease Extension Bill
HB 298 Would Allow 55-Year Terms to Encourage Development

(JUNEAU) - Commercial development of Alaska Railroad-owned land will be a more attractive and likely proposition under a bill passed by the House today to extend the allowable term of such leases from 35 years to 55 years.

Rep. Lisa Murkowski (R-Anchorage) introduced the bill at the request of the Alaska Railroad, to make it easier to attract financing for long-term development of land owned by the state-owned railroad, which helps support its passenger and freight operations by leasing excess land out for development. Railroad land near its yards by Ship Creek in Anchorage is a perennial magnet for development plans that never seem to materialize, she said.

"Whether it's an aquarium, or a fishery center, or condominium developments, or possibly now a convention center, there's always some great optimism about what we can do with this beautiful chunk of land right in downtown Anchorage," Murkowski said.

However, such plans are often derailed because current law allows the railroad to terminate such leases after 35 years, and many financial institutions that finance such development require assurance that their investments may be in place for longer than 35 years, she said.

HB 298 would extend that lease term to 55 years, providing lenders with a more stable investment and making it more likely railroad land will be put to productive use instead of being held vacant. Murkowski noted that the bill could be applied first to a prospective project on 15 acres of railroad land in Anchorage's Government Hill neighborhood.

HB 298 passed the House unanimously, and moves next to the Senate for consideration.

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