Delta Junction to get state loan to pay off lawsuit debt

Posted: Monday, July 26, 2004

FAIRBANKS - The Interior city of Delta Junction will receive a $1.2 million no-interest loan from the state to pay off a lawsuit settlement, under a bill signed into law by Gov. Frank Murkowski.

The governor's action last week comes a year after he vetoed a similar proposal and two years after then-Gov. Tony Knowles did the same thing.

The loan will allow the city to finish paying its breach-of-contract settlement with Allvest Inc. and Delta Corrections Corp. stemming from a failed effort to build a private prison at Fort Greely.

"We're breathing a huge sigh of relief to have this whole thing over now," said city manager Pete Hallgren. "This is an end of an awful chapter of our history for everybody."

The loan would become a grant should the city be incorporated into a borough.

Murkowski vetoed a proposed $500,000 loan with the same terms in 2003 because of legal concerns, but the governor said he had changed his mind this year after discussion with Delta officials.

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