STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING, LAND AND WATER PRELIMINARY DECISION Kodiak Island Borough Application for Lease AS 38.05.810(a) This (PD) is the initial determination on a proposed disposal of interest in State land and is subject to comments received during the public notice period. The public is invited to comment on this PD. The deadline for commenting is 5:00 PM on April 18, 2016. Please see the Comments section on page 5 of this decision for details on how and where to send comments for consideration. Only the applicant and those who comment have the right to appeal the Final Finding and Decision (FFD). Proposed Action: The Department of Natural Resources (DNR), Division of Mining, Land and Water (DMLW), Southcentral Regional Office (SCRO) has received two requests from the Kodiak Island Borough (KIB): ADL 226326 is a 0.84-acre tideland parcel which KIB wishes to lease for 20 years. The site is located along the western edge of Anton Larsen Bay on Kodiak Island; it is further described as being within the NW1/4 of Section 11, Township 27 S., Range 21 W., Seward Meridian, and as Alaska Tideland Survey (ATS) 1504, Tract B. KIB is proposing to use this site for the operation and maintenance of an existing boat ramp and parking area. ADL 226506 is a 5.84-acre tideland parcel which KIB wishes to lease for 20 years. The site is located along the western edge of Anton Larsen Bay on Kodiak Island; it is further described as being within the NW1/4 of Section 11, Township 27 S., Range 21 W., Seward Meridian, and as ATS 1504, Tracts A and C. KIB is proposing to use this site for the operation and maintenance of an existing floating boat dock and parking area. SCRO is considering the issuance of a single 20-year tideland lease under ADL 226326 to KIB for the operation and maintenance of a combined public use boat dock and ramp facility. Scope of Review: The scope of this decision is to determine if it is in the State s best interest to issue a public and charitable lease to KIB on State-owned tideland. Authority: This lease application is being adjudicated pursuant to AS 38.05.035(b)(1) Delegation of the Powers and Duties of the Director; AS 38.05.035(e) Written Findings; AS 38.05.105 Periodic Rent Adjustments; AS 38.05.810(a) Public and Charitable Use; and AS 38.05.945 Public Notice. The authority to execute the FFD and the lease has been delegated to the Regional Managers of DMLW. Page 1 of 11
Administrative Record: Case files ADL 226326 and ADL 226506 constitute the administrative record for KIB's lease applications. Legal Description, Location, and Geographical Features: The State land where this proposed lease site is located is described as follows: Legal description: Within the NW1/4 of Section 11, Township 27 S., Range 21 W., S.M. Geographical location: Western edge of Anton Larsen Bay, Kodiak Island Approximate Lat/Long: 57 51' 22.70" N, 152 37' 48.67" W Area geographical features: Anton Larsen Bay Existing surveys: ATS 1504, Tracts A, B, and C Municipality/Borough: Kodiak Island Borough Native Corporations/Federally Recognized Tribes: Koniag, Inc.; Ouzinkie Native Corporation Size: 6.68 total acres Title: DNR s Realty Services Section issued Title Reports RPT-8234 (ADL 226506) and RPT-8353 (ADL 226326) on October 16, 2015 and December 3, 2015, respectively. The reports advise that the State of Alaska holds title to the subject tideland under the Tide and Submerged Lands Act of 1953, the Equal Footing Doctrine, and the Public Trust Doctrine. Third Party Interests: There are no known third party interests. Classification and Planning: The project area is subject to the Kodiak Area Plan (KAP), Kodiak Region (Map 3-4). The classifications for this site are Resource Management Land and Public Recreation Land. KIB's proposed use for the site as a publicly available boat launch and loading facility is consistent with the intent of the KAP, which notes that such tidelands may be used for, "recreation by either commercial recreation operators or the public." Access: Access to the site is either by boat from Anton Larsen Bay, or by land from Anton Larsen Bay Road. Access Along Navigable and Public Waters: Nearly all shore and tide lands in the State of Alaska are subject to an Along easement (AS 38.05.127 and 11 AAC 51.045). The purpose of this easement is to uphold the constitutional right of the public to have free access to, and use of, the State s waterways. At this site, the Along easement is 50 feet seaward from the ordinary high water mark. Public Trust Doctrine: Pursuant to AS 38.05.126, all authorizations for this site will be subject to the principles of the Public Trust Doctrine; specifically, the right of the public to use navigable waterways and the land beneath them for: navigation, commerce, fishing, hunting, protection of areas for ecological studies, and other purposes. These rights must be protected to the maximum extent practicable while allowing for the development of this project. As such, SCRO is reserving the right to grant other authorizations to the subject area consistent with the Public Trust Doctrine. Agency Notice: An agency review was conducted on December 9, 2015. The deadline for agency comments was December 29, 2015. The following agencies were included in the review: DNR DMLW - Mining DNR DMLW - Water DNR Office of History and Archaeology/SHPO Page 2 of 11
DNR Contract Administration DNR Division of Oil and Gas DNR Division of Parks and Outdoor Recreation Department of Fish and Game - Habitat Department of Fish and Game - Wildlife Conservation Department of Environmental Conservation Department of Transportation and Public Facilities KIB Department of Engineering and Facilities KIB Department of Community Development U.S. Army Corps of Engineers Regulatory Division - Kenai Field Office Both the Division of Oil and Gas and the Department of Fish and Game (DFG) - Wildlife Conservation responded that they had no objections to KIB's proposal. No other agency comments were received. Lease Discussion: On March 14, 1996, two 20-year leases were issued for the subject area ADL 226326 was issued to DFG, and ADL 226506 was issued to KIB. DFG then assigned the lease for ADL 226326 to KIB on January 10, 2002. Both leases are scheduled to expire on March 14, 2016. The current leases for both ADL 226326 and ADL 226506 specify that any proposed changes to the original approved development plans (dated 1993 and 1995, respectively) may only occur after being submitted to the State for approval. However, during the term of each lease, significant new construction was initiated and completed on both the ramp (ADL 226326) and dock (ADL 226506). According to KIB, old building materials were replaced with new ones, the boat ramp's shape was altered, and the boat dock's location was changed. SCRO neither received requests to amend the original development plans (DP) as required, nor authorized either construction project. Furthermore, a 2003 Notice of Noncompliance from the U.S. Army Corps of Engineers advised KIB that during their unauthorized construction of the new boat ramp, KIB violated Section 301 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899. Construction of the new ramp and dock has been completed. The ramp is composed of concrete, timber, gravel fill, geotextile, and riprap, and measures approximately 16' wide and 135' long. The floating dock is constructed of steel and polystyrene, and measures 12' wide and 120' long; it is supported by six 60'- long steel piles driven into the bedrock. The dock's gangway is composed of aluminum and slip-resistant fiberglass, and measures 6' wide and 80' long. The gangway connects to an onshore abutment made of concrete and gravel fill. DMLW may only renew leases which are considered in good standing. Because of KIB's previous violations of both their existing leases and Federal statutes, SCRO may not adjudicate KIB's lease applications as renewals, but must instead process them as new lease requests. Though KIB has applied for the leases separately, SCRO is proposing to issue a single lease covering both sites, given their proximity, similarity, and identical expiration dates. KIB has agreed with this proposal. If the lease is issued, ADL 226506 will be closed, and ADL 226326 will be updated to cover Tracts A, B, and C of ATS 1504. Despite past procedural errors on KIB's part, they have expressed assurances that such oversights will be prevented moving forward. SCRO acknowledges the overall benefit to the local communities and the wider Kodiak region which the dock and ramp represent. These boating facilities are compatible with DNR's mission to, "develop, conserve, and maximize the use of Alaska's natural resources consistent with the public interest." The proposed lease will be subject to the terms of SCRO s standard lease document (available for review upon request) and any special stipulations based, in part, upon the following considerations. Page 3 of 11
Development Plan: The DP attached to this decision (Attachment A) and dated December 11, 2015 is under consideration by SCRO. Should the proposed lease be granted, it is anticipated that the DP will need to be updated throughout the life of the lease as activities and/or infrastructure are added or subtracted. All updates must be approved, in writing, by SCRO before any construction, deconstruction, replacement of infrastructure, or change in activity will be permitted. SCRO reserves the right to require additional agency review and/or public notice for changes that are deemed by SCRO to be beyond the scope of this decision. Hazardous Materials and Potential Contaminants: No fuels, oils, lubricants, gray water, or other hazardous substances will be stored on the leasehold. The potential use and storage of all hazardous substances must be done in accordance with existing Federal, State, and local laws. Debris (such as soil) contaminated with used motor oil, solvents, or other chemicals may be classified as a hazardous substance, and must be removed from the site and disposed of in accordance with State and Federal law. Lease Performance Guaranty (bonding): In accordance with AS 38.05.035, AS 38.05.860, and 11 AAC 96.060(a) Performance Guaranty, KIB will be required to submit a performance guaranty for the lease site. $7,000.00 Performance Bond: This bond will remain in place for the life of the proposed lease. The bond amount is based upon the level of development, amounts of hazardous material/substances on site, and the perceived liability to the State. This bond will be used to ensure the applicant s compliance with the terms and conditions of the lease issued for their project. This bond amount will be subject to periodic adjustments and may be adjusted upon approval of any amendments, assignments, reappraisals, changes in the DP, changes in the activities conducted, or changes in the performance of operations conducted on the authorized premises, and as a result of any violations to one or more of the authorizations associated with this project. Reclamation Bond: SCRO is reserving the right to require a reclamation bond due to noncompliance issues during the term of the lease or near the end of the life of the project. Insurance: In accordance with 11 AAC 96.065 Insurance, KIB will be required to submit proof of liability and worker's compensation insurance to SCRO, with the State of Alaska listed as a NAMED insured party. KIB will be responsible for maintaining such insurance throughout the term of the lease. Survey: ATS 1504 satisfies the requirements of AS 38.04.045. Compensation/Appraisal: Under AS 38.05.810(a), DMLW may offer governmental agencies and political subdivisions (such as KIB) leases with reduced rental rates, provided that the State-owned land in question is to be used for a public purpose and is in the public interest. Therefore, KIB's annual compensation will be $0.00. As this lease is authorized under AS 38.05.810(a) with no annual fee, no appraisal is currently required. However, in accordance with AS 38.05.105, DMLW reserves the right to subject the proposed lease to reappraisal at five-year intervals after the issuance of the proposed authorization. Subleasing: Subleasing is permissible through AS 38.05.095, if the proposed lease is approved. As this lease is authorized under AS 38.05.810(a) for public purposes, KIB may only sublease to another qualified entity under AS 38.05.810(a), with written approval from SCRO. Depending on the activity of any potential Page 4 of 11
subleases, SCRO is reserving the right to reevaluate the need for further agency review and/or public notice before making a determination on the appropriateness of the proposed sublease. Assignment of Lease: The proposed lease, if issued, may only be transferred or assigned to another agency, individual, or corporation which qualifies under AS 38.05.810(a), and only with written approval from the State of Alaska. A lease will not be assigned to an entity if that entity does not meet the statutory requirements of the lease. Reclamation: In accordance with AS 38.05.090(b), all lessees must restore their leased sites to a good and marketable condition within a minimum of 120 days after the termination of their leases. What level of reclamation constitutes as being good and marketable is at the discretion of SCRO. Public Notice of the : Pursuant to AS 38.05.945, this will be advertised for a 30-day public comment period, starting on March 17, 2016. Courtesy notices will be mailed or emailed to neighboring property owners, permit/lease holders, and other interested parties on March 15, 2016. In addition, the post offices located in Kodiak, Ouzinkie, and Port Lions will be requested to post the notice per AS 38.05.945(b)(3)(B). The notice will also be posted on the Department s website located at dnr.alaska.gov/commis/pic/pubnotfrm.htm. Comment(s): This decision is subject to both public and agency comments and all comments received by the comment deadline will be addressed in the Final Finding and Decision. Only those who comment and the applicant have the right to appeal this decision. Written comments about this project must be received in this office no later than 5:00 PM on April 18, 2016 to be considered. To submit comments or project proposals, please choose one of the following methods: Postal: Department of Natural Resources Division of Mining, Land and Water Southcentral Region Office ATTN: Brandon Tucker 550 West 7 th Avenue, Suite 900C Anchorage, AK 99501-3577 Email: brandon.tucker@alaska.gov Fax: (907) 269-8913 Questions about the lease portion of this project can be directed to Brandon Tucker at (907) 269-8549. If public comments result in significant changes to the, additional public notice will be given. To be eligible to appeal the Final Finding and Decision, a person must provide written comments during the comment period per AS 38.05.035(i)-(m). Signature page follows: Page 5 of 11
Recommendation: DMLW has completed a review of the information provided by the applicant, examined the relevant land management documents, and has found that this project is consistent with all applicable statutes and regulations. This decision considers the goals and intent of the Kodiak Area Plan, as well as comments submitted by interested agencies. It is recommended that ADL 226326 and ADL 226506 be combined, that ADL 226506 be closed, and that KIB be issued a 20-year tideland lease under ADL 226326 as described above. Brand~OUrce Specialist II Date : It is the determination of the Division of Mining, Land and Water that it may be in the State's best interest to issue a tideland lease for 20 years to the Kodiak Island Borough, as described above. This application shall now proceed t ublic not' e. Clark n anager lonal Office, Division of Mining, Land and Water Date Attachments Attachment A - Development Plan Attachment B - Location Maps Attachment C - Imagery Page 6 of 11
Attachment A Development Plan Attachment A - Development Plan Page 7 of 11
Attachment B Location Maps Attachment B - Location Maps Page 8 of 11
Attachment B Location Maps Attachment B - Location Maps Page 9 of 11
Attachment C Imagery Aluminum gangway Steel floating dock Attachment C - Imagery Page 10 of 11
Attachment C Imagery Boat ramp under construction Current boat ramp Attachment C - Imagery Page 11 of 11