Board of Regents

Board of Regents Meeting

Special Meeting of the 
Finance, Facilities, and Land Management Committee 
Friday, February 9, 2001; 12:00 noon - 5:00 p.m.
Room 106, UAA Commons
University of Alaska Anchorage Campus
Anchorage, Alaska

Committee Members
Elsa Froehlich Demeksa, Chair 
Mary Jane Fate 
Kevin O. Meyers
Joe J. Thomas
Joseph E. Usibelli, Jr.
Michael J. Burns, Board Chair

I.   Call to Order

II.   Adoption of Agenda

MOTION

"The Finance, Facilities, and Land Management Committee adopts the agenda as presented.

I. Call to Order
II. Adoption of Agenda

III. Full Board Consent Agenda

A. Approval of the 2001 Land Management Development Plan

B. Approval of Abrogation and Release of Restrictions Agreement, Bender Mountain

C. Approval of Land Acquisition Plan for University of Alaska Fairbanks, Poker Flat Research Range

D. Approval of Schematic Design for UAA Library Addition and Renovation Project

IV. Ongoing Issues
A. Update Regarding Sale at Cape Bingham to Forest Service

B. Update Regarding Sale of Trust Land Near Valdez to EVOS

C. Update Regarding Sale of Portion of Seward Marine Center

D. Progress on Planning and Construction Activities at UAF

V. Future Agenda Items
A. Report on Land Management Operations

B. UAA Master Planning & CIP Development

C. UAF Master Planning & CIP Development

VI. Executive Session

VII. Adjourn

This motion is effective February 9, 2001."

III.  Full Board Consent Agenda

A.  Approval of the 2001 Land Management Development Plan Reference 1

In accordance with Regents' Policy 05.11.04.A.3 and .5, the Statewide Office of Land Management has prepared and is advertising and circulating for comment the 2001 Development Plan (Reference 1). The Development Plan identifies university investment properties throughout the state that are being considered for development by the university. The Development Plan is sent to legislators and over 225 communities. It is available for review at the three main campuses and is sent to individuals upon request. Advertisements soliciting comments on the Development Plan are run in four newspapers across the state: Anchorage Daily News, Fairbanks Daily News Miner, Juneau Empire, and Ketchikan Daily News. The 2001 Development Plan comment period ends on February 20, 2001.

Approval of the annual Development Plan is required in accordance with Regents' Policy 05.11.05.A.2, and represents the first step in determining the feasibility of a project. In keeping with the board's direction for responsible management practices, the public-noticing process prior to the approval of a plan allows the public an opportunity to identify and comment on potential conflicts relating to the properties proposed to be developed, and the administration an opportunity to gauge the general public's acceptance of such a proposal. Comments received on the Development Plan will be discussed with the committee. Should additional comments be received subsequent to the February 9 meeting and March 7-9, 2001 meeting of the Board of Regents, the committee will be updated during those meetings. Approval of the Development Plan begins the detailed and costly analysis of project feasibility.

Before proceeding with construction activity associated with any project within the Development Plan that is subsequently anticipated to involve disbursements in excess of $500,000, the administration has been and will continue to submit to the Finance, Facilities, and Land Management Committee for approval a specific updated plan for any such project, including the project budget and an economic feasibility analysis. The board will note that this is a slight change from prior practices, changing "receipts or disbursements" to "disbursements." It has been found that in several instances the university has been able to invest ("disburse") less than $250,000 but expect and actually receive well in excess of $500,000 in a short timeframe.

The President recommends that:

MOTION

"The Finance, Facilities, and Land Management Committee recommends that the Board of Regents approve the Land Management 2001 Development Plan as presented and directs the administration to continue its development efforts and carry out the plan to the extent practicable in accordance with the Regents' Policy and guidelines set forth above. This motion is effective February 9, 2001."

B.  Approval of Abrogation and Release of Restrictions Agreement, Bender Mountain Reference 2

In 1989, the university acquired from the U.S. Department of Education 2.5 acres of land on Bender Mountain, approximately five miles northwest of Fairbanks (Location Map, Reference 2). The land was acquired at no cost and restricted to educational use only for 30 years. The deed, also shown in Reference 2, contained use restrictions and annual reporting requirements that the university certify that the university was using the property in accordance with the terms of its original application. The intended utilization, stated in the university's application for the property, outlined a long-term plan to relocate KUAC's transmission tower to the site and interim use for research.

On a limited basis, a portion of the site has been used for Christmas tree research; however, this research is no longer being actively managed and there is no interest in continuing this or other research on the property. KUAC no longer has the need or the financial resources to relocate its tower to this site and they recently made a formal determination that the Bender Mountain parcel no longer fits into its long-term plans.

The university can no longer operate the property under the terms and conditions set forth in the original deed from the federal government.

After discussing the university's inability to comply with the terms of the deed, the federal government has agreed to allow the university to abrogate its remaining 20-year "educational-use-only" restrictions for a fee of $8,000. The $8,000 fee represents a 33 percent discount to the current fair market value of the property ($12,000 by a recent appraisal approved by the federal government). The $4,000 credit is based on a 10-year "satisfactory educational utilization of the property" credit from the federal government.

The "Abrogation and Release of Restrictions" (Draft Abrogation Agreement is shown in Reference 2) will release the university from the remaining 20 years of "educational-use-only" deed restrictions. The Abrogation Agreement will contain a covenant requiring that for any proceeds in excess of $12,000 generated from the property prior to July 28, 2019, the federal government shall receive 67 percent. After July 28, 2019, the property will be free and clear of all restrictions.

In order to execute the proposed abrogation agreement, the federal government requires a resolution from the Board of Regents requesting release from the Bender Mountain educational use restrictions. That resolution is found on the first page of Reference 2.

The President recommends that:

MOTION

"The Finance, Facilities, and Land Management Committee recommend that the Board of Regents:

1.  approve the resolution set forth in Reference 2;

2.  authorize the payment of $8,000 and any miscellaneous expenses the administration may deem appropriate; and

3.  authorize the director of the Statewide Office of Land Management to execute an 'Abrogation and Release of Restrictions' in substantially the same form as shown in Reference 2, thus abrogating the certain educational use deed restrictions to the Bender Mountain property, legally described as the SW4SW4NW4SW4 of Section 16, Township 1 North, Range 1 West, Fairbanks Meridian.

This motion is effective February 9, 2001."

C.  Approval of Land Acquisition Plan for University of Alaska Fairbanks, Poker Flat Research RangeReference 3

The University of Alaska Fairbanks (UAF), as part of its master planning effort, has developed a Land Acquisition Plan to address concerns identified in the Poker Flat Research Range (PFRR) Master Plan for Range Upgrade and Long-Term Improvements (Reference 3).

PFRR is a unique and important component of the UAF Geophysical Institute, generating several million dollars a year in outside research funding and important research in the fields of upper atmospheric research. PFRR needs to be protected from encroaching development that threatens to limit its ability to ensure safe rocket launches and other operations at PFRR.

Increasingly, land within the critical rocket launch zones of PFRR is being developed in ways that threaten to restrict PFRR operations. In the proposed Land Acquisition Plan, (Reference 3), UAF has identified eight parcels of private land as necessary for acquisition in order to protect the future of PFRR. Based on current assessed values of these parcels and other comparable sales information, the administration estimates that the values of the parcels range from $25,000 to $135,000 each, or approximately $835,000 for all eight parcels. Seven of the parcels are improved with cabins, and one of the parcels is in the early stages of being subdivided into small recreational lots to be marketed to snow machiners.

Regents' Policy 05.11.05.A.2.c. requires that the Board of Regents review and approve all land acquisition plans prior to implementation. After board approval, the Statewide Office of Land Management (SOLM) will be able to pursue the purchase of land identified in the approved Land Acquisition Plan as parcels come on the market, provided that sufficient funding exists. SOLM is guided by Board of Regents' Real Property Policy to negotiate price and terms based on fair market value.

The proposed Land Acquisition Plan provides a framework within which the administration will be able to acquire land necessary to ensure safe rocket launches and related operations at PFRR. In conjunction with other documents, this Land Acquisition Plan can be used to assist in budget projections necessary for prolonging the useful life of PFRR.

Any significant changes to the Land Acquisition Plan must be submitted to the Board of Regents for approval.

The President recommends that:

MOTION

"The Finance, Facilities, and Land Management Committee recommend that the Board of Regents approve the Poker Flat Land Acquisition Plan (Reference 3), and authorize the administration to proceed with the acquisition of parcels identified for acquisition as the identified parcels become available for acquisition and funding is available. This motion is effective February 9, 2001."

D.  Approval of Schematic Design for UAA Library Addition and Renovation Project Reference 4

UPDATE
At the June 2000 Board of Regents' meeting, the UAA library project, including parking garage and pedestrian walkway, was approved at a total project cost not to exceed $43,980,000; the board authorized the administration to expend up to $9,268,000 total project cost for the parking garage/walkway. Bids were recently opened and award was made at the budgeted $7.144 million for construction. The project is on track. The Municipality of Anchorage has recently authorized a waiver to the requirement to install sprinklers in the parking garage. The administration expects that this may free as much as $150,000 from the $9,268,000 project budget so that it can be applied to other components of the overall effort. The decision on the contingency budget will be made next fall/winter.

BACKGROUND ON PROPOSED PROJECT
At its June 2000 meeting, the Board of Regents also authorized the administration to expend $600,000 for the schematic design of the library renovation and new addition. On November 16, 2000, the board further authorized the administration to expend up to $1.6 million for that continuing design process. UAA has now finalized an amendment to RIM Architects (formerly known as Cash-Barner Architects) to complete the all-remaining design work. Schematic design is now complete and the campus is ready to move forward with the design development phase and ultimately the bidding/construction documents for the new library addition and renovation to the existing library space.

SCOPE OF WORK
The project will include the construction of a new addition (approximately 113,000 sf) to the existing 92,355 square foot, 3-story Consortium Library, and renovations to the air handling and fire alarm systems and controls affecting significant portions of the existing structure. The remaining remodel budget will be used toward revitalization of existing entrances and circulation areas of the existing library, the removal of walls to enable an airy free flow between the structures, and surface renewals of all public spaces. Private offices and back office workspaces are not yet due for renewal. The construction will include surface parking for approximately 188 cars, minor roadway, intersection, and lighting work to improve the traffic circulation within the College of Arts and Sciences, Library, and Science Building areas.

The existing facility was constructed in 1973. Portions of that facility have been, and will continue to be, periodically updated with maintenance funds. A future capital request for work in FY07 will likely surface to address the ongoing revitalization needs associated with the old facility.

The final library configuration meets the anticipated growth in program space needs through 2020. The majority of the new library facility will support open stack space for print collections, documents, non-print materials and journals, in addition to the dedicated classroom, computer lab, reproduction center, multi-purpose room, and over 40 faculty/staff offices. At the glazed east elevation of each floor, several different types of reading/study areas will be incorporated to provide an important accommodation for students and faculty. Within the new 3-story addition will be space to accommodate the holdings of the Alaska Resources Library and Information Service (ARLIS) and minimum square footage for both the Institute of the North as well as the Alaska Moving Image Preservation Association (AMIPA).

Work on the library expansion is scheduled to begin in April 2002, following completion of the Parking Garage and Pedestrian Walkway Project that is currently anticipating a start date of May 2001.

Additional information is shown in Reference 4.

FUNDING

  Total Efforts Preliminary Planning & Garage/Walkway New Construction & Remodel w/o Garage FY94 Capital Approp.
$270,000
$270,000
$0
FY99 Capital Approp.
$9,530,000
$9,268,000
$262,000
FY01 Capital Approp.
$34,000,000
$0
$34,000,000
TOTAL
$43,800,000
$9,538,000
$34,262,000

A review of FY94 capital appropriation language has revealed that there is only $43.8 million available for the complete library effort, $180,000 less than was previously reported. This has no adverse impact to the project outcome. A 1-page budget is presented in Reference 4.

SCHEDULE
Schematic Design Approval, Auth. to Bid & Award Library Addition & Renovation - March 2001
Begin Constr. of Parking Garage & Pedest. Walkway - May 2001
Complete Design of Library Addition & Renovation - Sept. 2001
Complete Internal Review Process of Design - Nov. 2001
Comp. Constr. of Parking Garage & Pedest. Walkway - January 2002
Bid & Award Library Addition & Renovation - January 2002
Begin Construction of Library Addition - April 2002
Complete Constr. of Library Addit. & Occupy New Space - Sept. 2003
Begin Renovation of Existing Library Space - October 2003
Complete Renovation & Move-in Complete - August 2004

Regents' Policy 05.12.04.C authorizes the Finance, Facilities, and Land Management Committee to approve schematic designs at this project size so long as the estimated total project cost does not exceed the previously approved budget by 20 percent. There has been no increase in the project budget since the project was last approved in June 2000.

The President recommends that:

MOTION

"The Finance, Facilities, and Land Management Committee, as required by Regents' Policy 05.12.04.C:

1.  approve the schematic design for the University of Alaska Anchorage Library Addition and Renovation Project as presented;

2.  acknowledge the $270,000 in preliminary planning/design efforts to date; and

3.  authorize the university administration to bid and award contracts not to exceed a total project cost of $34.262 million;

provided, however, to the extent that the previously authorized amount of $9.268 million for the garage/walkway effort is not needed, it may be applied to the new construction/remodel effort, without additional authorization from the Board of Regents, for a revised combined total not to exceed $43.8 million. This motion is effective February 9, 2001."

IV.  Ongoing Issues

A.  Update Regarding Sale at Cape Bingham to Forest Service Reference 5

This 835.30-acre parcel of university land is located on Cross Sound about 10 miles south of Glacier Bay National Park. The parcel is an inholding in the West Chichagof-Yakobi Wilderness area within the Tongass National Forest (see Reference 5 map). The parcel does not contain commercial timber stands.

On December 2, 1994 the University executed a settlement agreement with the state and various environmental, community and fishery organizations allowing timber harvesting by the University on the Gulf Coast. Paragraph 10 of the agreement reads as follows:

"10. The University shall grant the United States Forest Service a ten-year option to purchase or exchange the University's Cape Bingham parcel in Southeast Alaska at fair market value determined at the time of purchase or exchange."

The Board of Regents approved the Settlement Agreement at its December 1, 1994 meeting.

The U.S. Forest Service has agreed that the conduit conveyance to them through The Conservation Fund at an appraised price of $1.5 million would fully satisfy the requirements of the Settlement Agreement. Vice President Beedle will brief the committee on recent developments.

This is an information item; no action is required.

B.  Update Regarding Sale of Trust Land Near Valdez to EVOS Reference 6

With the board's concurrence, between 1994 and 1995 the Statewide Office of Land Management (SOLM) identified 11 university properties to be placed on the Exxon Valdez Oil Spill Trustee Council's (EVOS) list of lands under consideration for purchase as part of its Comprehensive Habitat Protection Purchase Program. Three parcels near Valdez were ultimately sponsored by the U.S. Forest Service (USFS) and selected for acquisition by EVOS.

The Board of Regents approved the sale of the Jack Bay parcel on April 21, 1995, it being noted that USS 447 and USS 448 parcels were below a dollar value requiring board approval, and all subject to Regents' Policy on receiving fair market valuation prior to sale. The process of establishing a value acceptable to the university has required more time than originally envisioned. The USFS did not provide its appraisals to the university for USS 447 and USS 448 until 1997, and, for Jack Bay until 1999. The values established by the USFS appraisals ($748,000 total) were significantly lower than SOLM's internal estimate of value. In 2000, with USFS concurrence, SOLM secured Charles Horan as a third-party appraiser to appraise the parcels. The final fair market values established by the Horan appraisals was $1.355 million, detailed as follows:

Portion of Tract C, U.S. Survey 447 - $100,000
The university owns a 29.12-acre parcel, located just east of Valdez and south of the Richardson Highway near Meals Avenue. It is adjacent to the Valdez Duck Flats and, in all but title, is in large part, a natural extension of the Duck Flats. The university will tract out and retain approximately 4.44 acres with commercial potential and sell EVOS approximately 24.68 acres of land within the Duck Flats.

U.S. Survey 448 - $125,000
This 32.66-acre parcel is located approximately one mile east of Valdez bisected by the Richardson Highway. Approximately 9.42 acres of the parcel is encumbered by the Richardson Highway. The 3.5 acres north of the highway is leased to the USFS as a fish viewing area. The land south of the highway is predominantly grassy tidal wetlands, flooded at high tides, and is essentially undevelopable wetlands. This parcel is adjacent to the Valdez Duck Flats and, in all but title, is in large part, a natural extension of the Duck Flats.

Jack Bay - $1,130,000
This 942-acre parcel is located approximately 12 miles southwest of Valdez on the southeast end of Valdez Narrows. This parcel has over four miles of frontage on Jack Bay and is located just west of the Jack Bay State Marine Park. Almost all of the waterfront property is located within Valdez city limits. Although the highest and best use of the property is for large lot recreational subdivision development or for multiple lodge sites, the City of Valdez has expressed strong opposition to any development of this property.

Maps of these parcels are shown in Reference 6.

IN SUMMARY:
EVOS approved the acquisition of these parcels for the above fair market values at their December 4, 2000 trustees' meeting. At this time, the USFS is preparing purchase agreements for these properties. Provided that the terms and conditions of the purchase agreements are acceptable, and the required subdivision of USS 447 is recorded, SOLM will conclude the sale of these parcels.

The pending sale of all these parcels to EVOS has been noted in the SOLM Annual Reports for December 1994 through December 1998, and the June 1999 SOLM Annual Report. Additional published notice will be provided upon receipt of formal purchase documents and during the public hearing processes associated with the subdivision of US 447.

Regents' Policy 05.11.05.A.1 requires that the board shall be notified prior to any real property transaction greater than $100,000 in value. The pending sale of USS 448 at $125,000 requires such notice, which was provided on April 21, 1995. The sale of a portion of Tract C, USS 447 at $100,000 does not require notice. Because the $1.13 million Jack Bay parcel was not part of a published development plan at the time, yet was expected to be valued at more than $250,000, the board, in accordance with Regents' Policy 05.11.05.A.2.d, specifically approved that sale on April 21, 1995.

Vice President Beedle will brief the committee on any recent developments.

This is an information item; no action is required

C.  Update Regarding Sale of Portion of Seward Marine Center Reference 7

Prior to the August 1999 board meeting in Seward, the board was briefed regarding revitalizing university activities in that community. The administration has continued to work with the Kenai Fjords National Park, the Chugiak National Forest, and the City of Seward regarding a 15,700 gross square foot ("gsf") office and 11,100-gsf visitor center, including a modern smart classroom for 2-way distance delivery of university and NPS programs. The concept continues to place the facility on a portion of the university's 6.8-acre upland tract in Seward that is currently occupied by the 5,934 gsf K.M. Rae Building (1982 construction cost of $1.0 million), the 4,429 gsf 4-plex apartment building (1976 construction cost of $214,000), and parking which is shared with the Alaska SeaLife Center. Because of the hillside and drainage, less than 4 of the 6.8 acres are suitable for development.

Federal construction, anticipated to begin in March of 2003 and be completed in April 2004, is currently estimated at $8.7 million; $2.5 million in federal funds have been appropriated to the federal agencies for the scoping, design, and land acquisition. The university property has been appraised at $1.63 million. The federal government plans on adding to the footprint of the K.M. Rae Building and constructing a second and possibly third floor over some or all of the existing structure, tying the facility's view-shed into that of the Alaska SeaLife Center. The smaller footprint appears to be preferred for political and esthetic reasons. 

The original plan called for a campus-like concept that would involve the sale of the K.M. Rae Building and approximately 2.5 acres of university land shown on Reference 7, reservation of perpetual access rights for the university to portions of the new facility, and creation of a multi-agency facility and user group with maintenance, operating, and periodic costs allocated to the various users on a predetermined formulae. It was hoped that the end result would be:
1.  the substantial reduction or elimination of UAF's School of Fisheries and Ocean Sciences' (SFOS') $50-75k annual operating expenses, and the R&R expenses associated with this 19-year old facility; 
2.  access to a state-of-the-art distance learning center for university-wide program origination and delivery;
3.  access to the existing auditorium and expanded conference room facilities;
4.  dedicated access to six flexible offices; 
5.  continued prominent recognition of K.M. Rae within the new facility; and 
6.  significant compensation with which to enhance university programs.

UAF's SFOS has reconsidered its occupancy needs in the joint-use facility. Vice President Beedle will brief the committee on recent developments.

This is an information item; no action is required.

D.  Progress on Planning and Construction Activities at UAF

UAF Facilities Services Director Schedler will brief the committee regarding recent planning and construction activities at UAF.

This is an information item; no action is required.

V.  Future Agenda Items
A.  Report on Land Management Operations
B.  UAA Master Planning & CIP Development
C.  UAF Master Planning & CIP Development

VI. Executive Session

MOTION

"The Board of Regents goes into executive session at _________ A.S.T in accordance with the provisions of AS 44.62.310 to discuss matters the immediate knowledge of which would have an adverse effect on the finances of the university related to:
· Land Negotiations
· Facilities
The session will include members of the Board of Regents, President Hamilton, General Counsel Parrish, and such other university staff members as the president may designate and will last approximately _____ hour(s). Thus, the open session of the Board of Regents will resume in this room at approximately _______ A.S.T. This motion is effective February 9, 2001."

(To be announced at conclusion of executive session)

The Finance, Facilities, and Land Management Committee of the Board of Regents concluded an executive session at _____ A.S.T. in accordance with AS 44.62.310 discussing matters the immediate knowledge of which would have an adverse effect on the finances of the university. The session included members of the Board of Regents, President Hamilton, General Counsel Parrish, and other university staff members designated by the president and lasted approximately ______ hour(s).

VII.   Adjourn


 
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