Matanuska Experiment Farm resource assessment project

State policymakers and the University of Alaska Board of Regents have charged the university with finding ways to generate revenue from university property. This is an ongoing discussion item with the Board of Regents Facilities and Land Management Committee.

As part of those efforts to generate revenue from university assets, UAF is evaluating options to monetize lands including but not limited to sale, lease, partnership, and subsurface gravel resources at the Matanuska Experiment Farm and Extension Center. The gravel resource assessment work occured in a 70-acre parcel in the northeast corner of the farm property, and in an existing gravel pit in the farm core away from public access. The 70-acre parcel was included in this assessment because it is a steep/hilly area that cannot be used to grow grasses, hay or crops. The specific assessment was the first step in determining the potential value of the property's resource assets, and is in line with the MEFEC long-range plan.

The university is also exploring other ideas for generating revenue, including potential sale, lease, partnership agreement or other economically viable options. 

Letters of interest may be sent to UA Land Management. All options will be included in the university review.

Laura M. Carmack, Regional Resource Manager
Email address: lmcarmack@alaska.edu

University of Alaska System
Statewide Land Management
1815 Bragaw Street, Suite 101
Anchorage, Alaska 99508-3438
Phone: 907-786-7760 | Fax: 907-786-7733 | Web: www.ualand.com

The contractor has completed all initial testing and remediation work, including grading and leveling of roots in specific locations on university property to minimize impacts of testing. Some trails may be slightly wider than before. No additional assessment work is planned at this time.

As part of valuation, an appraisal includes a few scenarios focused on the 70-acre parcel, including but not limited to:

• to sell a conservation easement for a portion of the property, or
• to sell an access easement for the existing trails, or
• to sell a portion of the property fee simple (i.e., large vacant land sale or subdivision sale), or
• to lease a portion of the property for commercial use, including but not limited to resource development.

The appraisal on this parcel has been received and the university is working to prepare various disposal options and the timeline for discussion.

UAF is engaging with local stakeholder groups including the Matanuska-Susitna Borough to understand if there are ways to monetize our assets while promoting economic development in the region including how MEFEC can play a role through its research, land and programs. A multi-stakeholder workgroup will begin in October 2021 and take about six months to complete.

If UAF decides to pursue any of those options, the projects would follow established Board of Regents processes, which include opportunity for public input. As with any large-scale project or property disposal, a 30-day public comment period would be part of the multi-step process.

The University of Alaska System owns approximately 150,000 acres of land throughout the state. In FY19, UA's Land Management Office generated a total of $6.8 million in gross receipts from its assets. This revenue was produced from a variety of transactions including investments, real estate, land use permits, leases and sales. Net income from UA lands is deposited in UA's land grant endowment trust fund. The fund's management provides for principal inflation proofing and the costs of managing UA lands. Additionally, the fund advances the university's mission by funding strategic initiatives such as the UA Scholars Program. See the FY19 Land Management Annual Report (PDF)

UA's FY19 land revenue included $1.2 million from natural resource activities. Most natural resource income comes from commercial timber sales in the form of log stumpage fees. Historically, timber has provided the best return to UA's Land Trust per acre, augmented by mineral sales of gravel, oil, gas and coal land leases, and small gas royalty payments. UA is also evaluating numerous university properties for the sale or leasing its facilities and land. This includes the formation of public-private partnerships. The goals of all these transactions is providing revenue, reducing maintenance costs and lowering UA overhead and ownership risk.

The University of Alaska is also actively working with the governor and Alaska's congressional delegation to remedy our land grant deficit. UA received the second-smallest land endowment of any land grant university. Our small land holdings are inadequate for meeting the university's future goals. UA lands currently include approximately 137,857 acres (163 properties) designated as investment property and 12,168 acres (121 properties) designated for educational and research use. By comparison, the Alaska Mental Health Trust holds title to over 1 million acres of land across the state. Solving UA's land grant deficit of 360,000-acres, will strengthen the University of Alaska and help diversify UA revenue streams.

UAF will consider all viable opportunities to generate revenue. At this stage, the results of the resource assessment will be help to determine whether this option will be feasible to pursue in-house or through an industry partnership.

None of the test pits or bore holes planned for the assessment will occur on trails. Digging test pits requires use of a large excavator and other equipment, which traveled to the testing sites via farm roads and several trails, including the Long Lake Loop Trail, Long Lake Connector Trail and Rabbit Field Connector. The equipment for borehole drilling is much smaller, and will use similar access routes. The contractor's work includes cleanup and trail remediation in selected areas. They are responsible for any inadvertent access or impacts as part of their activities.

UAF Chancellor Dan White made the decision in spring 2020 to move ahead with resources assessment work at the farm property. The decision was made in consultation with the UA President and Board of Regents. The UA Land Management Office hired the contractor, as is common when the university is exploring development of its lands.

It's too early to say for sure. The purpose of the assessment work will be to ascertain the quality and volume of the gravel resource. If the university does pursue development, the amount of revenue possible will depend on extraction costs, future reclamation costs and demand for the gravel. UAF is aware of a market for gravel in the region, and potential revenue for a project could be in the millions of dollars.

Yes. In 2005, the university sold gravel from a 5-acre area for use in constructing a local hospital. The current assessment work is in that same 5-acre area, as well as in another 70-acre area, which was selected for assessment because it isn't suitable for agricultural use. Land sales and natural resource extraction is part of the long-range plan for the Matanuska Experiment Farm and Extension Center. That plan was finalized in 2019 and approved by the Board of Regents as part of UAF's master plan.

Evaluating the results of the resources assessment will help determine whether pursuing gravel extraction is feasible, along with other options and considerations.

As this resources assessment is preliminary exploration, there was not a specific comment period. However the proposal for the assessment has been part of the public record for nearly a year, and available for public comment via the normal Board of Regents public testimony process. For safety purposes, public notification of the work was posted on social media and key stakeholder groups were contacted directly informing them of the assessment work.

Yes. UAF Chancellor Dan White, UA Interim President Pat Pitney, and other university leaders have participated in several public meetings to consult with local leaders. These events including presentations to the Palmer Chamber of Commerce, the Gateway Community Council and a briefing for Mat-Su legislators and staff. Once this, and any other revenue-generation ideas at the farm are considered, a plan will go to the UA President and Board of Regents. Any decision to move forward with a project of a certain scale requires regents' approval, as well as a disposal plan, public notice and additional public comment. The public will have the opportunity to submit comments during the university's 30-day public notice and any public meeting coordinated by the university.