Economy

A U.S. District Court judge in Anchorage has ruled against the state of Alaska in an 11-year-old legal dispute that has significant implications for the Arctic National Wildlife Refuge and state finances.

On Wednesday, Judge Sharon Gleason ruled that laws and regulations setting the western border of the Arctic National Wildlife Refuge are “ambiguous,” but federal regulators made a reasonable decision when they declared the border to be the western bank of the North Slope’s Staines River, rather than on the western bank of the Canning River.

There are 20,000 acres of potentially oil-rich land between the two waterways, and the state of Alaska had sought ownership of the area — sited just to the east of the Prudhoe Bay oil field — for oil and gas drilling.

While the federal government is now advancing plans for oil and gas leasing in the disputed area, the decision to keep it under federal control means that if oil and gas are discovered there, the state of Alaska would receive far less revenue than it would if it were state-owned land.

“The state of Alaska is disappointed that the court failed to recognize the state’s ownership of this disputed area on the border of the Arctic National Wildlife Refuge,” said Patty Sullivan, communications director for the Alaska Department of Law, which brought the case against the federal government.

“This land may hold significant resource potential for the future of energy for Alaska and the United States and would likely be thoroughly explored and developed under state management. We will evaluate our options and are glad to, at least, have a federal administration currently in place that recognizes the importance of responsible resource development in this area,” she said.

Attorneys for the U.S. Department of the Interior and the U.S. Department of Justice did not return messages seeking comment.

The state’s dispute with the federal government revolves around whether federal mapmakers viewed the Staines River as a separate river from the Canning, or simply a “distributary,” a different channel of the same river, in 1957.

The Bureau of Land Management used the boundary drawn that year to create the Arctic National Wildlife Range in 1960, and it became the refuge in 1980. Maps published at that time show the border running along the Staines River.

As Gleason explained in her 74-page order, “If the Staines River was considered to be part of the Canning, then the extreme west bank would follow the west bank of the Staines distributary of the Canning River. But if the Staines and the Canning were considered to be two separate rivers, then the boundary would follow the west bank of western-most channel of the main Canning River.”

The dispute also included a marker designating the northwest, seaward boundary of the refuge, but the main issue was about the river-defined border.

In 2014, the Alaska Department of Natural Resources requested ownership “of certain lands west of” the Arctic National Wildlife Refuge.

The Alaska Statehood Act, which remains partially unfulfilled more than 65 years after statehood, allows the state to select more than 100 million acres of federal land for state ownership.

In 2016, the U.S. Bureau of Land Management responded to the state’s request, saying the state had already selected all available land in the area. The state protested, saying that federal officials were drawing ANWR’s border west of where it should have been because they were relying on the Staines River, not the Canning.

The state appealed to the U.S. Interior Board of Land Appeals, which ruled in favor of the BLM. The state sued over the issue in 2022 and won an early victory when Judge Gleason ruled the following year that the land appeals board failed to consider a 1951 map that showed the Staines as a separate river from the Canning.

But in 2024, the land appeals board again ruled against the state, which promptly renewed its case in the U.S. District Court and requested summary judgment, a request that was answered Wednesday.

Explaining her order, Gleason noted a 1906 U.S. Geological Survey dictionary that labeled the Staines and the Canning as the same river, but “on the other hand, some contemporaneous maps label the two rivers separately, indicating that the Staines and the Canning may have been considered to be two separate rivers. And yet other contemporaneous maps do not label the Staines or do not separately label the Canning River at the mouth,” she wrote.

While that might have favored the state’s position, Gleason concluded that the land appeals board’s interpretation of the border was reasonable, not arbitrary, was supported by substantial evidence and wasn’t contrary to law, meaning that the state doesn’t have grounds to overturn it.

Gleason concluded, “the court upholds the IBLA’s finding that the northwest boundary of the refuge follows the Staines River, a distributary of the Canning River.”

If the state chooses to appeal Gleason’s decision, it will have 30 days after final judgment.

A proposition on Juneau’s local ballot this year asks voters whether to lower the cap on the local property tax rate, also known as the mill rate. Advocates say the proposition will help make Juneau more affordable. 

Proposition 1 seeks to cap the rate the city uses to determine how much residents pay in property taxes each year. 

“Everyone who owns property in Juneau pays property tax to the city based on the value of their property. This would be capping the rate at which the Assembly can charge them for that,” said Assembly member Christine Woll. 

The proposed cap is only slightly lower than what property owners are already paying currently. 

Right now, the city caps the mill rate at 12 mills. That limit excludes debt service, which goes toward paying off the city’s existing bonds and loans.

If voters pass Proposition 1 this election, that cap would be lowered to 9 mills. Juneau’s current rate, when excluding debt service, is 9.16. But the rate has been higher before, and the Assembly wants the flexibility to charge more in the future. 

But an advocacy group called the Affordable Juneau Coalition says the city needs to focus its spending on things it needs to fund, and not what it wants to fund. Angela Rodell is the treasurer of the group. 

“I think it’s really imperative that the city show its residents that they care about affordability and want to really focus on the things that make this community very livable,” she said.  

So, what would the change actually mean for your wallet? The city estimates that owners with property valued at half a million dollars or less would save about $80 per year in property taxes if the proposition passes. That’s assuming the home value stays the same. 

Now, let’s compare that to the top commercial property owner in the city: Hecla Greens Creek Mine. It owns property valued at just under $285 million based on its 2024 assessment. With the proposed cap, it could save just over $45,000, assuming the value stays the same. 

According to census data, more than a third of Juneau households are renters. And renters might not see any benefit from a cap — landlords have no legal obligation to pass any savings from the change on to their tenants. 

So, the winner in this scenario is those who own a lot of property in town. The city is the loser. That’s because the Assembly would have less money to fund city services. 

“The question that’s being asked this year is, ‘Do you think we should be focusing on making this a community that has services for our lowest-income people, or do you think that we should cut taxes for the wealthiest in the community to make things more affordable?’” Woll said. 

The change would result in a roughly $1 million loss in revenue to the city year over year. The rate cap wouldn’t be immediately devastating to the city’s roughly $140 million in annual discretionary revenue. But less revenue equals less money to pay for services. Woll says over time, the Assembly may need to make cuts to the budget if the proposition passes. 

For each dollar the city collects in property taxes, a bit more than 50 cents goes toward education and a little under 40 cents goes toward city services. 

“When I think long term, it’s maybe less about the money and more about the city’s ability to respond to changing environments,” Woll said. 

It’s unclear what services the Assembly might choose to cut. It would make those decisions after the election.

Rodell said she thinks the city can handle the change, and in doing so, it will prove to constituents that it, too, can tighten its belt. 

“We know that the city can deliver a lot of services for 9 mills,” she said. “What we’re asking the city to do is to continue to be really thoughtful about how and where and when they collect tax and spend that tax.”

If approved by voters, the rate cap would be applied next city budget season. Election Day is Tuesday, Oct. 7. 

Find the latest local election coverage at ktoo.org/elections.

Construction to get Eaglecrest Ski Area’s controversial gondola up and running is finally underway. 

The ski area announced Wednesday that work has begun to develop the access road to one of the gondola’s stations on Douglas Island. That means that the mountain will be closed off to the public beyond the main lodges for the foreseeable future. 

The road construction comes more than three years after the city bought the used gondola from Austria. 

And now, the ski area’s future is riding on it. 

In the coming years, the ski area is slated to run into a multimillion-dollar deficit. That is intentional – it’s part of a plan to repair some broken and aging infrastructure while boosting pay to employees and preparing to operate year-round. The plan to dig out of the deficit relies heavily on revenue from the gondola.

Eaglecrest General Manager Craig Cimmons said the road construction marks a major step for the ski area.

“It’s really exciting,” he said. “Like I’ve been saying all along, the summer revenue is going to change the course of Eaglecrest forever, and having these crews here working on this really solidifies that this is happening. It’s really going to be a big deal.”

Cimmons said the goal is to have the gondola up and running by the summer of 2028. This January, the ski area will celebrate 50 years of operation. 

A local Alaska Native corporation, Goldbelt Incorporated, invested $10 million in the gondola in 2022 in exchange for a revenue-sharing agreement. Goldbelt announced last fall that it plans to develop a cruise ship port a few miles north of Eaglecrest on Douglas. 

Cimmons said the ski area will provide updates regularly about the status of the closure. 

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In Bridget Cove, Meta Mesdag grows thousands of oysters arranged in rows of floating mesh bags. She owns Salty Lady Seafood Co., the only Pacific oyster farm in Juneau.

Some years, naturally occurring toxic algal blooms have shut down her farm for weeks at a time. That motivated Mesdag to ask researchers: Can she predict when it will happen? 

“It’s such a mystery,” she said. 

On Mondays, Mesdag takes samples of her oysters and sends them to the state lab in Anchorage to test for toxic algae called Alexandrium catenella. The algae produce a neurotoxin that builds up in shellfish when they eat it. Just one milligram can kill a person. Testing is federally regulated. 

If the test comes back clean, she harvests. But if the oysters test over the FDA limit for the toxin, the farm shuts down.

In 2023, Mesdag said she had to shut down for half of her 20-week harvest season. 

“When you’re not making any money, but you’re spending money on labor, that can be really expensive and hard,” she said.

Since the farm couldn’t sell oysters at the time, she said she lost clients and had to lay people off. Once a closure is in place, the farm has to pass a series of tests to reopen. 

“We just have to wait, and we don’t know how long it takes,” she said. 

That loss of sales isn’t great for business.

The federal government is invested in boosting mariculture in Alaska’s waters, and there are still questions about how the environment here affects the health and quality of oysters. The state is invested in those questions too – about a decade ago it set a goal to grow Alaska’s mariculture into a $100 million industry by 2040, with 40% of that revenue coming from oysters. 

Researchers studied Mesdag’s oyster farm between 2021 and 2023 to understand the environmental conditions there and what it might say about the challenges and opportunities for growing shellfish in Southeast Alaska. So far, 20 oyster farms have permits in the region.

The study had a humble start. Mesdag’s question about harmful algal blooms landed on Courtney Hart’s desk when she was studying paralytic shellfish poisoning as a graduate student at the University of Alaska Southeast. Now she’s a crustacean shellfish program manager with the Port Gamble S’Klallam Tribe in Washington. 

“The first year, I was just trying to figure out if there was an easy way to monitor for Alexandrium or harmful algal blooms on her farm so I could help warn her essentially when a bloom was coming,” Hart said. 

But she hit a dead end.

“We didn’t really solve that problem,” she said. 

Sometimes the researchers would detect the toxic algae in the water and not see it in the oysters. Other times they’d see it in the oysters but not the water. Hart said the problem is not unique to Alaska — harmful algal blooms are notoriously unpredictable.

“Whether that bloom becomes toxic for shellfish really depends on so many factors that scientists have been studying for a long time and haven’t quite pinned down,” she said. 

But Hart said the study morphed when NOAA researchers joined. They wanted to answer a bigger question: What environmental conditions impact the overall health and quality of oysters in Southeast Alaska?

The scientists found that the spring phytoplankton bloom provides oysters a feast for only a short period, and they practically starve over the winter. 

“Often it may mean that it takes three years for your oysters to reach the right size, versus just two years, which is more typical down here in Washington,” Hart said.

The research team also looked at salinity. In the summer, during the primary harvest season, freshwater flows into the cove from melting snow and ice, making Mesdag’s farm less salty. Calm seas can prevent the freshwater from mixing into the saltwater below. 

When that happens, Mesdag said she can taste the difference — sometimes her oysters aren’t briny at all. 

But there are benefits too. The consistently cold water prevents oysters from spawning, so they retain high levels of lipids — healthy fats that make for a high-quality oyster. 

“As far as health of an oyster for humans, it’s good,” Hart said. 

While environmental conditions play an important role in how the industry develops, Bobbi Hudson said reaching the market is key. 

Hudson is the executive director of the Pacific Shellfish Institute. She splits her time between Washington state and Gustavus and is working with Southeast Conference, the region’s economic development agency, on an upcoming report about investments in the mariculture industry. 

“Alaska can have tremendous goals, but at the end of the day, if there’s not a market for those products, or a really strong market for those products, they’re not going to be able to reach those goals,” she said. 

She said that scaling up production, setting up cold chain distribution networks and making paralytic shellfish toxin testing more efficient could help Alaska’s shellfish farms grow. 

The Alaska LNG Project netted two more agreements earlier this month during an energy conference in Italy. Both agreements are nonbinding, but proponents say it’s proof of ongoing positive momentum. The developments come as the company behind the project aims to decide whether to move forward with development, or not, by the end of the year.

Adam Prestidge remains optimistic about the Alaskan LNG Project’s commercial viability. He’s the project president under Glenfarne Group, which assumed majority ownership earlier this year.

“We think it is a fantastic project from an infrastructure fundamental standpoint,” he said. “Its commercial attributes, we think, make it a really attractive project, and put it in a really advanced state.”

The idea of a natural gas pipeline between the North Slope and Southcentral has been tossed around for decades.

If it’s built, the three phase project would extract and treat natural gas on the North Slope, move it through an 800-mile long pipeline to Southcentral and then liquefy it in Nikiski for export overseas. The project already has the necessary land and permits. What it needs now are customers – and, of course, to be built.

Since taking over, Glenfarne’s secured five nonbinding agreements with potential project customers. Two of those were signed at the Gastech Conference earlier this month in Italy.

One agreement is with JERA Co. – Japan’s largest power generation company – to purchase a set amount of liquefied natural gas from the project over two decades.

The other agreement outlines a “strategic partnership” with POSCO International. The company is the sales representative of POSCO Group, Korea’s largest steel producer, and also imports liquefied natural gas.

Prestidge says he’s aware of the skepticism around nonbinding contracts. But he says the scale and scope often require a drawn out negotiation process – sometimes up to one or two years.

“They’re enormous contracts, and they don’t just turn into binding agreements overnight,” he said.

Glenfarne Communications Director Tim Fitzpatrick says four of the agreements are at the first in a three-step process to get to a binding agreement.

The agreements come as project owners prepare to make a final decision whether to move forward with development – a decision expected by the end of the year.

Glenfarne enlisted another firm to update the project’s current cost estimate. Prestidge says Glenfarne does not expect construction costs to be “significantly more expensive” than previous estimates, but they’re keeping the final construction price tag secret.

“You wouldn’t normally be publishing publishing costs for a project – for a private project, kind of on a recurring – rolling updates,” he said. “And so the ultimate cost to complete is going to be something that is most likely not going to be made public.”

Glenfarne says construction costs are only one part of the equation. Prestidge says steel tariffs and the cost of liquefied natural gas will ultimately dictate final project costs, and Glenfarne thinks its commercially viable.

Larry Persily is a former state revenue commissioner and Federal Coordinator of the Alaska Natural Gas Transportation Projects. He suspects Glenfarne’s decision won’t sit well with Alaskans.

“I think keeping it secret, which is another way to say private, will just increase the skepticism among Alaskans who think this thing has been a multi-million dollar wasted effort over the years,” he said.

And Persily is doubtful project costs will come in at previous estimates, around $44 billion, pointing to rising labor costs and project overruns in other parts of the country. In the mid-2010s, the total estimates were between $45 billion and $65 billion. In 2020, the estimate dropped $37.5 billion, but then came back up, in part, due to inflation.

“It’s really hard to believe that is going to come in at that [Alaska Gasline Development Corporation] estimate,” he said. “Mega-projects like this are notorious for going over budget.”

Prestidge says Glenfarne’s team is up to the challenge.

“We’re very appreciative of the reception that we’ve gotten from Alaskans,” he said. “We know, we know that we’re new in the state, and we’re going to continue working, working really hard to deliver this fantastic project for the state.”

Glenfarne and the Alaska Gasline Development Corporation will hold an open house Oct. 8 at the Nikiski Community Recreation Center from 5:30 to 7:30 p.m. to share project updates and meet with residents.

Renters living on Juneau’s historic Telephone Hill have a week to pack up their belongings and vacate their homes before the city’s Oct. 1 eviction date. 

In the basement of a red-trimmed house with cedar siding on Telephone Hill, John Ingalls played a carbon fiber bass flute on Tuesday afternoon. He’s rented this space for decades. 

For the last 15 or so years, he’s been making flutes on the hill in his well-loved shop. There’s hardly an inch of open space on the tables and walls in there, all filled with tools, varnishes or half-finished flutes. 

“It’s amazing the things that have happened in this little shop here — all the things we’ve built,” he said, looking around. 

But before next Wednesday, all of it will need to be packed up and taken off the hill. In December, the city plans to demolish the homes there in hopes of making way for newer, denser housing. The city does not yet have a developer signed on to the project. 

Juneau is facing a housing crisis — there are simply not enough homes to keep up with demand. Alarms of a crisis date back more than a decade. The Telephone Hill redevelopment would add more than 100 new housing units to downtown.

Sitting in his dining room alongside some of his neighbors on Tuesday evening, Ingalls said this isn’t the first time he’s had an eviction scare on the hill. 

“When I was younger, I sort of had a plan if I got evicted, that I would build a platform and scaffolding up on the roof, and hang up on the roof with a squirt gun,” he said, laughing. 

All the people living on Telephone Hill are renters, and have been since the state took ownership of the neighborhood in the 1980s. It was originally intended to be redeveloped to build a new Capitol complex there. But that didn’t happen.  

The state transferred the land to the city two years ago. Last year, the Assembly voted to redevelop the neighborhood. 

Joe Karson just turned 80 years old. He rents an apartment on the hill. 

“My history on the hill goes back quite a length, but I’ve actually been in this particular unit for 20 years,” he said. “That’s enough to make it a home.”

Karson said he’s been struggling to find new housing since the Oct. 1 eviction notices went out almost four months ago. 

He said he’s applied for a spot in senior living facilities, but was told the waitlists are at least a year long. He said he’s looking for other options, but is still holding out hope that the Juneau Assembly will reverse course. 

“That’s my home,” he said. “It doesn’t make any sense. As far as affordable housing goes, to tear it down, it’s totally counterproductive to what they say that they want to do.”

Karson isn’t alone. Other Telephone Hill residents find themselves without a plan.

On Monday, dozens of residents attended the Juneau Assembly meeting to protest the city’s plans to evict residents. The Assembly could have chosen to rescind the eviction notices sent to residents at the meeting, but it did not do that. 

Instead, multiple members, like Alicia Hughes-Skandijs, shared why they stood behind their decision. 

“I love that neighborhood too, but I truly believe in my heart that to take a property that has a smaller number of houses on it and trade that for more dense housing is a right move for us, for where we are in our housing crisis,” she said.

As far back as 2010, a study by the Juneau Economic Development Council pointed to a lack of housing in town as a barrier for low-income and homeless populations to find and afford apartments. 

Juneau’s city attorney, Emily Wright, said the city is prepared to take legal action against residents who do not vacate by the eviction deadline. 

“Everybody on the Hill received an eviction notice for October 1,” she said. “If they don’t leave their homes by October 1, the city would initiate a legal action against them, the same as any landlord-tenant situation in Alaska.”

Back on the hill, Ingalls’ partner, Rachel Beck, said she and Ingalls own a home they’ll move into after the eviction notice. But, she said, they’d rather stay. She said Juneau is losing much more than just a couple of old houses — it’s losing history. 

“To me, it’s like throwing away your grandmother’s jewels,” she said. “This is a really special place.”

The neighborhood is one of the oldest continuously occupied areas in Juneau. It has a history for Beck; she gave birth to her children there. It has statewide significance, too. Alaska’s first commercial telephone service started out of a house in the neighborhood. 

“I think for Juneau, it’s important to have reminders of our past,” she said. 

But she fears that once the demolition begins, the memory of the neighborhood will fade, dwindling to just words on a plaque – the only reminder of what once was.