Recently, in his second hit piece on the Alaska Railroad Corporation (ARRC), Alex Gimarc accused the corporation and its Board of Directors of being “feral.” Not being sure what Mr. Gimarc meant, I went to the online edition of the Merriam-Webster Dictionary and found the following definitions for “feral.”
1) Relating to, or suggestive of a wild beast;
2) not domesticated or cultivated: wild;
3) having escaped from domestication and become wild.
Although I can only speak for myself, my parents might have agreed that in my youth I was not domesticated. Also, I suspect that there are those who might find me uncultivated. However, I don’t see what any of that has to do with my performance as a director of the Alaska Railroad Corporation. Ignoring my confusion about the use of the word “feral,” it is worthwhile discussing Mr. Gimarc’s complaints about the railroad.
The main issue is somewhat legally complex and involves the type of easement the Alaska Railroad holds for its railroad right-of-way. The right-of-way for the railroad was established by the federal government between 1914 and the driving of the golden spike in Nenana in 1923. The federal government owned and operated the Alaska Railroad from then until it was transferred to the State of Alaska in 1985.
In the meantime, in some areas, the federal government issued homestead patents for lands in the vicinity of the railroad right-of-way, which introduced private property interests into the railroad right-of-way. Those homestead patents expressly made them subject to the existing railroad right-of-way. This interesting and complicated history provides context for understanding our interactions with neighboring property owners.
Most property owners are familiar with the type of easement generally reserved for utilities. In those easements, the utility has the right to place utility infrastructure on, over or under the landowner’s property, but, as long as the property owner does not interfere with that infrastructure, the owner is free to carry on other activities without the easement holder’s permission. This is the type of easement that many adjacent property owners believe the Railroad was granted.
The Alaska Railroad, on the other hand, believed it was transferred at least an exclusive easement when the Railroad was purchased by the state. When a railroad entity has an exclusive easement, it controls the activities in that easement thus allowing it to charge for uses that are not directly tied to rail operations and it can determine if a use interferes with its rights even if the entity is not the owner of the land involved. It is worth noting that many other railroads in the United States have this type of easement.
This issue began to fester in 2008 when the Railroad initiated regulations relating to the use of privately owned land interests within the Railroad’s easement. Without going into the history of the disagreement in detail, it was one of the first major issues I was made aware of when I was appointed to the Board of Directors in late 2019. Some property owners and their supporters met with me on a number of occasions to explain their position. Former Rep. Chuck Kopp was involved in many of these sessions, and I believe that they gave me a good understanding of their position that the Railroad’s easement rights were quite limited.
I also met with the ARRC management to get an understanding of their position that the Railroad was granted an exclusive easement with all the rights such an easement conveyed. Management explained that this position was consistent with the position historically maintained by the railroad.
Although Sen. Ted Stevens had left public office before this issue came to be fully developed, Congressman Don Young was well aware of it. At one point he and Sen. Lisa Murkowski suggested that the General Accounting Office review the issue, but later reconsidered that strategy as the GAO could not commit to a reasonable timeline to prepare a report. Twice in 2019 Congressman Young suggested the property owners accept the ARRC’s offer of a 20-year permit with no fee. That suggestion was not acceptable to the property owners.
After listening to both sides and reviewing the history of the issue, I became convinced that the only way to resolve the issue was through litigation. However, I had no opinion as to which side would prevail in such litigation. I believed that the property owners had strong arguments and might prevail.
In late 2019, the Flying Crown Homeowners Association, which permitted a small airstrip in South Anchorage, sent the ARRC a letter demanding it renounce its rights in a piece of property over which the ARRC has an easement. This action led to litigation in the federal court rather than the state courts because the issue is what kind of easement the federal government transferred to the state in 1985. The ARRC has prevailed in that case at both the Alaska District Court and in the 9th Circuit Court of Appeals in a 3 to 0 decision.
The Board did not take suing a homeowners’ association made up of Alaskan citizens lightly, but felt it was time to resolve this issue one way or the other. To that end, we agreed to pay all of Flying Crown’s legal fees for the litigation at the District Court level. It is also worth noting that during this process the ARR and the homeowners’ association reached a no-cost, long-term land use agreement for the Flying Crown taxiway and aircraft parking area. (In the case of residential adjoining land owners, we also have a no cost residential permit for existing uses such as lawns and gardens.)
Although I am not going to respond to every one of Mr. Gimarc’s accusations, I have a couple of other issues I would like to note. It is not relevant that two of the board members were involved in litigation with each other. My experience is that the past litigation has not interfered with either board member’s desire to carry out his fiduciary responsibilities as a board member.
Mr. Gimarc suggests that Gov. Dunleavy replace all the board members, as is clearly within a governor’s authority. However, it is worth noting that the Alaska Railroad Act adopted into law in 1985 requires that the board be made up as follows: the Commissioners of the Department of Commerce and Community Development and the Department of Transportation and Public Facilities; one person who is a union employee of the ARRC; a person with railroad management experience (currently held by an individual from outside Alaska who has extensive experience in short-line railroad management); and three public members. How this diverse group goes “feral” is a mystery to me.
Mr. Gimarc also alleges that the ARR charges exorbitant rates for leases. By law, we are required to charge the fair market value for any property we lease. We obtain a third-party independent appraisal to set that value. If a current lessee disagrees with that valuation, they can get their own 3rd party independent appraisal. If it is different, we work to come to an agreement on the valuation. If that still does not achieve agreement, there is an available arbitration process under our lease contracts.
Lastly, it is important to note that the ARR is not without some fault in how it has handled the relationships with adjacent landowners. Some of these actions have exacerbated the tensions between us and our neighbors. With that in mind in 2022 the board set up an External Issues Review Committee which will allow individuals and organizations to go to a committee of the board (which also contains one non-board member) if they think they have been mistreated by management. It’s one more way to ensure that ARRC is responsive to local communities and businesses.
Alaska is a unique place, a fact that the railroad reflects in a number of ways. I believe I speak for my fellow board members when I say we are committed to a strong and resilient Alaska Railroad that operates with respect for our neighbors and for the long-term benefit of Alaska.
John Shively is chairman of the Alaska Railroad Board of Directors.
