It's going to cost the city of Kenai more than a quarter-million dollars in land value to get out from under the restrictions that came with a $3,400 federal grant it accepted almost 30 years ago.
The grant came from the former Bureau of Outdoor Recreation in 1973 and was used to transform a vacant lot in downtown into a recreation field, according to Kenai City Manager Rick Ross.
The Bureau of Outdoor Recrea-tion was a program under the Land Water Conservation Fund of the U.S. Department of Interior.
The grant came with strict provisions.
"Once accepted, the city had to agree to dedicate that land for outdoor recreation in perpetuity," Ross said.
The lot is located on Frontage Road between Bridge Access Road and Spur View Drive. When it was developed with the BOR money, it was surrounded by undeveloped land, and none of the businesses in the area, Arby's, Radio Shack, State Farm Insurance or the senior housing, were there.
"Frontage Road wasn't even there," Ross said. "When it was dedicated, it was a virgin area. Little did we know 30 years later we would want it for a higher and better use."
Jim Stratton, director of the state Division of Parks and Recreation, whose department oversees BOR land, said somebody thought it was a good idea at the time.
"We make it very clear what it is," he said. "But land uses change in 27 years. Times change."
He said that despite the difficulty and time involved in removing the BOR restrictions -- now a program of the National Park Service -- there is still stiff competition for the grant money.
After the grant and its restrictions were accepted on the Frontage Road property, the area grew and the lot fell into disuse as the fields at the city's schools were developed. The land is now considered, along with the adjacent two lots the city owns or is acquiring, as the most prime commercial land left undeveloped in the city. It's the property Mayor John Williams would like to see a convention center and hotel built on.
There are two ways out from under BOR restrictions. The city could purchase land that has an equal market value as the Frontage Road lot and apply to have the restrictions transferred, or make a deal with the state of Alaska to supply land for a transfer. The latter is what the city is attempting.
"We got an appraisal for Birch Island, of which we own half, and if the state agrees, we can give it to them and they will put the restrictions on it," Ross said. "Then we can remove the restrictions from the downtown parcel."
Birch Island is the stand of trees on the east side of the Warren Ames Bridge, along the south shore of the Kenai River.
Ross said the Kenai City Council discussed selling its portion of Birch Island to the state for $1 if it agreed to develop it into an historical interpretive site. The island contains ancient Native house and cache pits, and the area is used by Natives for educational fisheries.
"In discussions with the city, it was clear they were not interested in (transferring it to us) if we didn't step up and do something with Birch Island," Stratton said.
He said funding for design and engineering for the Birch Island wayside park, at $350,000, is being considered in this year's state Transportation Improvement Plan. It includes an upgraded pullout and an elevated walkway under the bridge to the stand of trees. Design and materials for the interpretive displays will cost about $100,000, while construction of the entire project is pegged at $1.9 million.
"Development of the interpretive messages will incorporate information from local tribes," Stratton said. "We won't do it in a vacuum. We do it in close accord with the locals."
Design could start next year, with construction beginning in 2004.
The city also will transfer to the state the tongue of land on the south shore that extends from Birch Island to a point across the river from Beaver Loop Road. Stratton said that land will be left as wildlife habitat.
The city will give the state 345 acres, worth an estimated $260,000, in exchange for getting the restrictions lifted on the 3-acre Frontage Road site, worth about $210,000.
At the Feb. 21 city council meeting, there will be a public hearing on the deal, with a presentation by Stratton, and the council then will put its stamp of approval on it or turn it down. Ross suspects it will be approved, he said, based on feedback he's gotten from council members.
He said the state tentatively has agreed to the swap, but the whole deal still needs federal approval before the transfer can take place. He said he did not expect that until June.
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