My Turn: Sweetheart golf deal not so sweet for residents

Posted: Wednesday, January 05, 2005

The proposed golf course lease before the Juneau Assembly may be a great deal for the individuals doing business as Totem Creek, Inc. It is not a good or fair deal for Juneau residents.

First is the issue of whether the city should be treating Totem Creek as a nonprofit. Totem Creek filed state incorporation papers as a nonprofit. Anyone can do this for $50 and a little paperwork. To be considered a nonprofit for purposes of city sales and property exemption, one must show an IRS letter of determination of nonprofit status. Getting this 501(c) status requires clear public purpose, a plan for disposition of assets to another nonprofit upon dissolution, and other hurdles that ensure that nonprofit status and related benefits are warranted. To apply for a city parks and recreation or health and social services grant, one must show proof of IRS nonprofit status.

Why would the city not hold Totem Creek to the same standard when proposing to lease more than 200 acres of public property and offer other rights of great value? The Alaska Department of Natural Resources requires evidence of exemption from payment of federal income tax when leasing our state lands for public and charitable use.

Next are the sweetheart deals within the lease. If approved as presently written: For 10 years, Totem Creek will have the right to purchase land for housing development at "fair market value." Sounds good until you read on and see that the fair market value is the value assessed the undeveloped land at the time the lease is signed, plus inflation. In five or even 10 years, the value of that land is unlikely to be the same as today, due not just to access related to the golf course, but also plans for the second channel crossing and North Douglas Highway extension. In fact, this is a public subsidy to Totem Creek.

Totem Creek must pay "fair market value" for timber, gravel and rocks sold for use off of the golf course area. However, they may recover the cost of logging, including roads that may later be used for cart paths or roads for future residential or commercial development. So, they sell our timber and pay for building their roads (with our gravel and rock), including those that may be used for this speculative residential development for which there has been no environmental review or permitting. In fact, this is a public subsidy to Totem Creek and a bypass of public planning.

A critical read of the proposed lease finds many sweetheart deals. Good for Totem Creek; bad for Juneau residents. Special rates for Juneau residents must be 25 percent off posted rates for nonresidents. Cruise ships charge a greater than 25 percent commission for tours, so we'll still be paying more than most others. Even that isn't really in Juneau residents' favor.

If the city wants to subsidize a golf course (and related bar-restaurant), let's have a public vote like we did for the swimming pool, ski area and skating rink. At least, let the Totem Creek pay a truly competitive rate to the city for all of the public resources that they will use (land, timber, gravel, etc.). Then, the Assembly can publicly weigh benefits of the golf course and decide if this golf course project is the best place to appropriate public money.

Yes, the Totem Creek folks have invested a lot of time and some money in this project. So have many individuals opposed to the development and many public agencies looking out for the environment. The lease is a bad deal for Juneau, perhaps without legal standing since Totem Creek is not a federally recognized nonprofit, and generally poor public policy. The Assembly should not approve it. As precedent, think of the capital-move issue. Alaska voted to move the capital. Alaska voted to move it to Willow. Many people speculated on land in Willow. Alaska then voted that we wanted to know the full and complete costs of the move before it happened. As with the golf course, many people had invested much effort and money. When we had a price tag, we weren't buying.

• Karla Hart is a Juneau resident.

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