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Taxes, report may extinguish volcano center

Plans for observatory near Anchor Point have been all smoke, no fire

Posted: Sunday, February 20, 2005

Dreams of a public facility near Stariski Creek dedicated to the study of the volcanoes of Cook Inlet appear close to extinction.

Eighty acres of property located a few miles north of Anchor Point that the Kenai Peninsula Borough sold to a nonprofit group looking to build a volcano observatory have become the target of possible foreclosure proceedings.

North Pacific Volcano Learning Center Inc. owes more than $4,300 in back borough property taxes and it has failed to maintain a required escrow account with First National Bank of Alaska. Furthermore, the corporation is late in filing a required biennial report with the Department of Commerce, Community and Economic Development.

A member of the NPVLC board of directors said Thursday that the delinquent taxes would be paid, but that has yet to happen.

A year after the borough acquired the acreage from a private owner in 1999 for $315,000, NPVLC signed a long-term purchase contract with the borough, agreeing to pay the $315,000 plus interest at an annual rate of 10.5 percent over 25 years. The corporation intended the site to be home to an observatory and learning center focused on the volcanoes of Cook Inlet.

The corporation was only required to pay $1 per year for the first five years, during which time some $216,000 in interest would accrue. NPVLC is scheduled to begin making $3,251.34 monthly payments Feb. 1, 2006. To fully pay off the note held by the borough, a large balloon payment would be necessary in 2026.

According to borough land management officer Paul Ostrander, NPVLC is delinquent on annual escrow maintenance fee payments to First National Bank of Alaska. That escrow account could be closed unless maintenance fees are paid, Ostrander told the Kenai Peninsula Borough Assembly.

In addition, the corporations section of the Alaska Division of Occupational Licensing lists NPVLC as being in "active noncompliance" status for not filing the required biennial report for the period ending June 30, 2004. Failure to do so could mean involuntary dissolution of the corporation.

This is not the first time the corporation has been in noncompliance with state requirements. A letter urging NPVLC to file a biennial report for the period ending June 30, 2002, was sent to the corporation in March 2003 from the then-named Division of Banking, Securities and Corporations warning that dissolution could occur by May 2003 if the delinquent biennial report was not forthcoming. By filing the 2002 report in late April 2003, NPVLC avoided dissolution.

The corporation owes back taxes to the borough amounting to $4,336.28 for the years 2003 and 2004. According to Ostrander, the redemption period for the 2003 tax year expires June 3, 2005, at which point the title may be transferred to the borough through a clerk's deed.

But foreclosing for back taxes has its own set of complications, said Planning Director Max Best. Instead, he said, the borough was likely to simply wait until this time next year, when presumably the learning center corporation would fail to deliver its first sizable monthly installment of $3,251 and foreclose on the deed of trust.

The borough might realize a tidy profit if it sold the acreage afterward, because the land apparently has been increasing in value. According to NPVLC's 2002 biennial report, signed by corporate treasurer Betty Randall, the property overlooking Cook Inlet was then worth $350,000.

Board member Emmitt Trimble said Thursday that it was the intention of the corporation to pay the back taxes, adding that there had been some confusion regarding whether NPVLC Inc. was tax-exempt.

"It turns out we are not," Trimble said.

Board member Sammy Crawford said Thursday that organizers had worked hard to push the learning center project from concept to construction but simply could not generate the kind of community interest and grant funding needed to bring it to fruition.

"The biggest stumbling block, I think, was that board members were too busy to do it by themselves," Crawford said. "We talked with groups who said they would carry through, but that didn't happen. No one had the time to pursue the grants."

Crawford said timing played a role in the lack of success. The learning center idea competed with other projects for funding, such as the Challenger Learning Center in Kenai and the Islands and Ocean Visitors Center in Homer, both of which, Crawford noted, benefited from backing by the cities they were in.

"The property we had was between Anchor Point and Ninilchik and had no city entity to help see it through," Crawford said. "We had great plans and great ideas but it was a matter of timing."

Crawford said she hoped that a center dedicated to the study of the Cook Inlet volcanoes might someday get built, perhaps through backing by another entity, such as the University of Alaska.

"It's still a good idea," she said. "It just didn't happen."

Crawford said she isn't sure exactly what happens from here.

Without a biennial report in hand — and soon — the state could dissolve the corporation. A borough foreclosure on the deed wouldn't happen until next year. About whether the corporation would be in a position to begin paying the monthly installments by next year, Trimble said, "We'll cross that bridge when we come to it, I guess."

If payments aren't forthcoming and the borough forecloses, it would end at least for the time being, the dream of a volcano learning center on the Kenai Peninsula.



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