Ladd Landing lease extension considered

Posted: Monday, December 10, 2007

The administration has asked the Kenai Peninsula Borough Assembly to approve a one-year extension on a lease option for borough land at Ladd Landing held by Texas-based investors.

Ordinance 2007-40, sponsored by Borough Mayor John Williams and introduced at the Tuesday assembly meeting, would authorize what would be the fifth addendum to the option first created in 1987. At that time, the optionee was Tidewater Service Corp., which later merged with Midgard Energy Company.

In 1994, Midgard Energy assigned the option to investors Richard D. Bass, William Herbert Hunt, and William Herbert Hunt Trust Estate.

The option, now some 20 years old, covers Ladd Landing on the east side of Cook Inlet, a site proposed for a future coal export terminal for shipping low-sulfur, sub-bituminous coals from the Beluga Coal Fields.

In a memo to the assembly, Marcus Mueller, borough land management officer, noted that a recent review of the option document indicated elements needed revisiting. Ordinance 2007-09 adopted earlier this year provided a one-year extension giving the Land Management Division time to work through the option.

Mueller said the division needs more time to complete that work.

"The administration has been in consultation with the optionee and there is mutual agreement between the parties that an additional one-year extension of the current option is advantageous," Mueller said in the memo.

Reached by phone Friday, Mueller said, "The issues that need to be looked at are updating of the lease terms in general, reworking the mechanics of public access easements to ensure the public's interest in accessing the beach and roads are provided for and protected, and providing for a small number of new elements, such as the location of material sites and rights-of-way for the transport of materials (coal)."

Once a reworked version of the option is complete, it would be presented to the assembly for an approval vote, he said.

The Ladd Landing terminal, if built, would provide the trans-shipment point for product excavated from the proposed Chuitna Coal Project, a surface mining and export venture of PacRim Coal LP, which is controlled by Bass and Hunt. The company's 20,571-acre lease in the Beluga Coal Field northwest of Tyonek includes and estimated 1 billion tons of coal.

That project envisions an overland conveyor to transport coal to Ladd Landing, where a proposed 10,000-foot-long trestle would carry the coal to ships offshore. Much of the coal would be shipped to markets overseas, but some could supply energy needs in Alaska.

While efforts toward state and federal permitting of the project continue, so does a growing opposition to creation of the mine in the pristine wilderness some 45 miles east of Anchorage.

The ordinance seeking the option extension gets a public hearing on Jan. 8, 2008.

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