How the rules of selling city land in Sitka may change

In 1978, the Sitka was granted thousands of acres of land by the state to create a source of revenue. The rules for disposing that land could change. The Assembly, on first reading, passed an ordinance saying that only land valued over $5 million would require a public vote in order to be sold and that vote would be advisory (Emily Kwong/KCAW photo)

A debate about modifying Sitka’s land disposal laws continues. Right now, land sales over $500,00 require a public vote. The Sitka Assembly wants to raise that ceiling to $5 million to motivate economic development and bring the city into compliance with the state constitution.

Assembly member Aaron Bean was absent from this meeting. The Assembly also approved several rate increases on first reading, including a 22% bump in water rates to pay for a secondary water source. Electric rates are not raising this year. They also made a decision on how to divide the money within the Fisheries Enhancement Fund, but that could change at a future meeting. We’ll have more on Raven News at 5:18 p.m.

Downloadable audio.

The issue of constitutionality didn’t come up much at Tuesday night’s meeting of the Sitka Assembly. But that’s how the ball got rolling on this topic in the first place.

“I don’t see a rush on this. It’s just meeting that legal necessity. That’s my only motivation here,” said Mayor Matthew Hunter.

Here’s the problem: Sitka General Code states that land sales over $500,000 and land leases over $750,000 must pass a public vote. But city administration and attorney Mike Gatti, the city’s outside legal counsel, say that is not compatible with the state constitution.

In 1978, the Sitka was granted thousands of acres of land by the state to create a source of revenue. Gatti argued in a memo (Motion and Memos Ord 2018-18) that land disposal is an appropriation and there’s a constitutional limitation to that which applies to local government. “[SGC 18.12.010B impermissably interferes with the Assembly’s legislative authority and discretion to control the allocation of its public assets, in this case land, among the competing needs of the community,” he wrote.

A new version of an ordinance to change that law came before the Assembly Tuesday night, calling for an advisory vote of the public instead. It also suggested raising the bar by a few zeros: to $5 million dollars for land sales and $7.5 million dollars for land leases. At that amount, the Assembly would hold off on their decision until the public cast that advisory vote.

Assembly member Richard Wein wanted to know exactly how the co-sponsors of the ordinance (Ord 2018-29), Hunter and Ben Miyasato, came up with that figure. Hunter said that figure it was recommended by a local realtor.

“I believe Travis Vaughn [of RE/MAX Baranof Realty] mentioned it as being a reasonable number in his mind and it certainly seemed like a better number than $500,000 to us,” Hunter said.

But Wein wanted more information, saying he had requested city staff prepare in an inventory of the value of Sitka’s real property. That would include areas of high interest, like Sitka Community Hospital. At a May 8th Assembly meeting, some members of the public expressed concern this proposal was designed to make selling the hospital easier.

“I was told that the [land] inventory would not be available until July,” Wein said at Tuesday night’s meeting. “Therefore I certainly cannot make a reasoned decision as to what is exactly going to be for sale and whether this $5 million ceiling is an intelligent and thoughtful move,” Wein said.

The point was well taken by the other Assembly members. Steven Eisenbeisz made a motion to postpone a decision until the first meeting in August to give Assembly members time to look at the land inventory. That was voted down, 2-4 with Wein and Eisenbeisz voting for.

Wein then suggested changing the ordinance to keep the threshold at the current levels ($500,000 for land sales and $750,000 for land leases), but making the public’s vote advisory. That was voted down too 1-5, with only Wein voting for.

Miyasato said the Assembly needs to make it easier for the city to sell land. “This here will be good for business. It will also be good for housing, affordable housing,” Miyasato said.

Current code hampers that development. That’s the perspective of many in the business community and the truth for a recent deal that fell through. Assembly member Kevin Knox spoke of how a plan to turn the former Forest Service building into housing ran into problems.

“[RE/MAX Baranof Realty] had a pretty good plan for going forward with re-developing that. But because the lot across the street was a tidelands lease, the developers didn’t want to go forward knowing that it would have to a public vote under current code. They pulled out. It’s a pretty significant chill there, on what could have been a fairly interesting development,” Knox said.

And with that, all members of the Assembly present, except for Wein who voted no, approved Ordinance 18-29 on first reading. It will come up again for a second and final reading on June 26th.

See our previous coverage about the land sales debate here: