Borough to lease two tracts of port land

PALMER — The Mat-Su Borough is moving ahead with two leases to companies looking to do business at Port MacKenzie.

The first, passed at the borough assembly table Sept. 6, leases 7.5 acres to PacArctic Logistics, LLC, a trucking, marine and logistics company out of Seattle. According to the borough, PacArctic specializes in freight forwarding and project logistical support.

The second passed muster at the assembly Tuesday and leases 5.5 acres to Central Alaska Energy, LLC, which wants to build a tank farm and trucking facility there.

Both parcels are very close to the route of the under-construction rail loop to bring train service to the port. The PacArctic lease also abuts Point MacKenzie Road.

“People are starting to see the vision we have for the port and that’s evidenced by these two companies stepping up and saying hey we want to be in there,’” Borough Manager John Moosey said. “The momentum’s going to get rolling and it’s going to be good.”

Central Alaska’s CEO, Justin Charon, told the assembly that the tank farm will be used to store fuel in large quantities.

“This project is good for the port development,” he said. “It also provides increased competition in the fuel markets.”

He said it could also have an impact on local fuel prices since communities closer to the farm would have to pay less to buy from Central Alaska Energy.

The assembly seemed pleased Tuesday with the Central Alaska Energy lease.

“I think that the borough did a pretty good job with this lease,” said Assemblywoman Cindy Bettine. “I was pleased to see that some of our rural land has such great potential for revenues and, I’m sure, creating jobs.”

The Central Alaska Energy lease requires no rent for the first 18 months. Borough planner Emerson Krueger said that’s because for those 18 months Central Alaska won’t be able to access its land due to construction of the bed for the rail line.

The lease kicks in at the end of those 18 months at an annual rate of $49,590 per year or $4,132.50 per month. In years four and five that rent goes up to $65,458 per year.

In year five the borough and the company will reassess, figure out what’s fair, and go from there, repeating that process every five years for the 25-year term of the lease.

Assemblyman Ron Arvin said he was pleased to see the borough give its lessees a break on that first year and a half of rent payments.

“It’s clear to me that staff understands now that there is a benefit to the early years of a lease to reduce the cost outlays to the lessee,” Arvin said.

“Especially at a young port,” borough mayor Larry DeVilbiss added.

The two leases are the first at the port since borough manager John Moosey asked back in May during the assembly’s budget talks for $100,000 to hire a contractor to make sure the right lessees get matched up with the right parcels.

Thursday Moosey said the borough is getting very close to finding that contractor.

Borough planner Emerson Krueger said that what the borough wants is essentially someone to bounce ideas off of.

“What we need is access to somebody that knows about the different types of operations we anticipate at the port so we can pose specific questions to them as they arise to ensure that basically we’re not stepping on our foot when we try to lease to one user that might preclude some other use,” Krueger said.

An example of that, he said, is actually the Central Alaska lease. Central Alaska needs to run a pipeline from the tank farm to the dock. The pipeline will run under parcels that will be storing cargo both in bulk and in containers down to the borough’s barge dock.

“The pipeline has to terminate where the barge is pumping fuel,” Krueger said. “We also have this ferry that’s going to be accessed off the barge dock.”

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.