Black bear cubs Smokey, Bandit, and Tuliaan were orphaned in Juneau and Seward in 2013. They make short work of a tent baited with grapes and graham crackers, during a demonstration for elementary students this spring. (KCAW photo/Robert Woolsey)
One of the original tenants at the Gary Paxton Industrial Park in Sitka is offering to buy the property it’s leased for the last 12 years, but the deal is not sitting well with the park’s board.
Fortress of the Bear, a nonprofit bear habitat and rescue center, wants to buy around 200,000 square feet of the park for just $100.
The Fortress of the Bear has come a long way since co-directors Evy and Les Kinnear were raising enormous hogs at the site, in order to qualify for a state permit to take in rescued bear cubs.
The rebound in tourism, plus a newly rebuilt state highway out to the facility’s doorstep have been great for the Fortress.
“We just grew exponentially this year. For us. We had probably a 20-25 percent jump in growth.”
Evy Kinnear narrated a slideshow of the Fortress’s success, and discussed the organization’s need to raise more capital for improving visitor amenities — restrooms and a gift shop — and for meeting a state requirement for a new perimeter fence. All of which would be easier if the Fortress owned its land.
But Kinnear’s offer of $100 was not an easy one to accept for the Gary Paxton Industrial Park board.
Dan Jones — as other board members — thought that a below-market value sale was okay. But just how far below-market? Jones estimated that the Fortress site, plus an additional buffer strip up to Blue Lake Road, was worth anywhere from $65,000 to $800,000.
Thinking out loud, he said a sale price of $100 to the Fortress was really a policy call for Sitka’s elected officials.
“Personally, I would almost suggest that we weenie out of it and tell the assembly that we recommend sale at below-market value, and let them figure it out.”
Member Charles Horan also had some heartburn over the $100 offer. He’s been an advocate of deeply-discounted rent for the Fortress, while it became established. But he was concerned that a $100 sale would also come with a lot of strings attached — that the Fortress would rather not have.
“My view of this going along is that we would give you guys this below-market rent, and all the encouragement we could to see you go forth and prosper, to the point where you would come back and buy it at some sort of halfway market price, and then go forth and do whatever you want to do.”
There is a precedent for attaching strings to below-market sales at the park. In 2008 the city sold Silver Bay Seafoods the former pulp mill dock for $0, but required that the processor invest $3-million in improvements to the structure, which had become unsafe.
Other sales — like the True Alaska Bottling plant property — have been at the appraised market value.
Member Ptarmica McConnell described herself as a “numbers person.” She wanted to make sure the deal added up for the park, and for Sitka.
“My thing is we have to be fair, right? If we sell it for under-market, we have to have very compelling reasons why this is different from everybody else.”
Les Kinnear runs Sitka’s Fortress of the Bear with his wife, Evy, caring for seven bears in the remains of a decommissioned pulp mill. (KCAW Photo / Rachel Waldholz)
Fortress co-director Les Kinnear responded that his organization was different.
“Consider as well, that we’re a non-profit, and we’ve essentially taken zero resources from the city over the last 13 years. If you look at some of the other nonprofits that are operating under much more generous conditions than we are, that are essentially generating nothing back to the city at this point.”
Calculating what the Fortress may or may not contribute to the city will be important to the board’s final recommendation. The market rental value of the Fortress’s industrial property is just over $3,000 per month. In 2003 the assembly waived that payment for 18 months, in favor of a rental plan that would start at $100 per month, and then gradually step up to $3,000. Those steps never happened. In 2007, the assembly cut the Fortress’s lease payments to $50 per month, where they’ve been ever since.
But the Fortress has put former mill structures to use, and saved the city possibly hundreds of thousands of dollars in demolition costs.
Member Charles Horan thought this was a significant upside to the deal.
“They have been responsible stewards of the property through their lease term. They have put in cash and sweat equity, and donated to make the property more presentable now. In other words, if they walked away, we are better off now for what they’ve done, in terms of demolishing the property, than what we had when they took it over.”
Park executive director Garry White admitted nudging the Fortress of the Bear toward making a purchase offer on the property. “At $600 per year in rent,” he said, “it’s not worth the liability exposure for the city.”
The board wanted White to explore the idea further with the Kinnears, in the hope of finding a deal that would be more palatable.
They voted to extend the Fortress lease for another year, at $50 per month, to give the parties time to negotiate.
