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HomeMy WebLinkAboutAPA Unalaska Project Land and Royalty Agreements 1986 1Alaska Power Authority Board of Directors Unalaska Geothermal Project Land and Royalty Agreements June 16,1986 . This folder contains summaries and agreements negotiated with Qunlashka Corporation (the village corporation of Unalaska/Dutch Harbor)and the Aleut Corporation (the Regional Native Corporation) which own certain surface lands and geothermal resources necessary for the Unalaska geothermal project. The agreements have been reviewed and approved by the staff, attorneys,of both corporations;the staff,attorney and city council of Unalaska;the Power Authority staff;and the Alaska Department of Law.The boards of both corporations have authorized their corporate officers to execute the negotiated agreements. These agreements are referenced in the Board Action Item relating to ratification of agreements for the Unalaska geothermal project and are scheduled to be discussed by the Planning Committee of the Board prior to the meeting. 4707/403 -l1- SUMMARY OF AGREEMENT WITH THE OUNALASHKA CORPORATION Rights Granted There are two general categories of rights granted to the PowerAuthorityunderthisagreement(Article A,page 1): 1.The Power Authority is granted the right of access to the land for the purpose of conducting the feasibility study. 2..Upon completion of the feasibility study,should the Power Authority obtain financing for the project,it is granted rights-of-way and easements necessary for the project. Consideration Upon completion of the feasibility study,designation by the Power Authority of the location of necessary rights-of-way and easements, _and approval by the Corporation of those designations,the Power Authority and the Corporation agree to negotiate consideration to be paid or exchanged for the property rights conveyed (Article B,Sec.2,page 2.).However,if agreement is not reached within 60 days,the Power Authority agrees to pay and the Corporation agrees to accept the fair market value for the property rights as determined by registered appraisers and based on the value of the portion of the property to be conveyed as a part of the whole property value.The Power Authority and the Corporation may each have the property appraised.If the appraised values are within plus or minus twenty percent,both parties will accept the value midway between the two appraised values.If the appraised values exceed plus or minus twenty percent and the parties still cannot agree on a fair price,they will mutually select and split the cost of a third appraiser whose determination of the fair market value shall be binding on both parties. Other Provisions As part of the feasibility study,the Power Authority agrees to analyze the potential for hydrothermal development and use of geothermal fluids from the project for direct heating of future agriculture and aquaculture facilities in nearby Makushin Valley(Section 3,page 3). The Power Authority shall indemnify,save harmless and defend the Corporation against claims arising out of Power Authorityactivitiesonitslands(Section 5(c),page 4). 4631/387 |-5- "ane The Corporation shall be responsible only.for taxes assessed against its interest in lands within Power Authority rights-of-way and easements and against any improvements it places on those lands(Section 6,page 4). The Power Authority may assign its interest in the agreement only to another state agency,unless prior written consent is obtained by the Corporation,and any successor-in-interest shall be bound bytheagreement(Sections 7 and 8,page 4). 4631/387 -6- Page 1 of 4 Conditional Right-of-Way Easement Agreement for the Unalaska Geothermal Project THIS AGREEMENT is made and entered into as of the day of»1986,by and between THE OUNALASHKA CORPORATION,an Alaskan Corporation,hereinafter referred to as the "Corporation,"and the ALASKA POWER AUTHORITY,a public corporation of the State of Alaska, hereinafter referred to as the "Power Authority." WHEREAS,the purpose of the Power Authority is to promote,develop, and advance the general prosperity and economic welfare of the people of Alaska by providing a means of constructing,financing,and operating power projects;and WHEREAS,the Alaska Legislature finds that the establishment of said power projects is necessary to supply power at the lowest reason- able cost to the state's electric utilities,and thereby to the con- sumers of the state;and WHEREAS,the Power Authority has completed a four-year geothermal exploration and drilling program near Mount Makushin on Unalaska Island, which resulted in the discovery of a commercially productive geothermal reservoir;and WHEREAS,the Power Authority has also completed a reconnaissance study of energy requirements and alternatives indicating that a geother- mal power system is likely to be the most economic source of electric power for the community of Unalaska/Dutch Harbor;and WHEREAS,the Power Authority Board of Directors has allocated funds to conduct a feasibility study for developing a geothermal power system on Unalaska Island;and WHEREAS,the Corporation has selected or received interim convey- ance,under the Alaska Native Claims Settlement Act,to lands needed for transmission line and road corridors to develop such a system; NOW,THEREFORE,witnesseth that: Article A.GRANT OF ACCESS RIGHTS AND RIGHTS-OF-WAY 1.Access to Lands to Conduct Feasibility Study.The Corpo- ration,in consideration of the covenants and conditions provided in this Agreement,grants rights of access to the Power Authority,its employees,agents,representatives,and contractors to land the Corporation owns on Unalaska Island sufficient to conduct and complete a detailed feasibility analysis,hereinafter referred to as the "Feasibil- ity Study,"for a geothermal power project,hereinafter referred to as the "Project."Said access rights shall be for the sole purpose of conducting the Feasibility Study. 2.Right-of-Way Easement Rights.Should the Power Authority obtain financing for the Project on or before July 1,1988,the Corp- oration,in consideration of the covenants and conditions contained in this Agreement,hereby grants to the Power Authority rights-of-way and easements for a road,transmission line,dock,and associated Project facilities on Corporation land as described in Section 4 of Article B of this Agreement.Easements shall be 100 feet in width during con- struction,reduced to 40 feet in width upon completion of construction, except at transmission line angle points,terminals,and other Project facilities where a wider easement is necessary.No as-built easement shall exceed 100 feet in width without prior written consent of the Corporation.All easements are granted with the rights,privileges,andauthoritiesto:(a)construct,reconstruct,maintain,repair,operate, improve,and update upon or under lands within said easements an electric transmission line,road,dock,and associated facilities including but not limited to poles,towers,conductor,guys,anchors, RARA tem te Page 2 of 4 bridges,abutments,culverts,supporting apparatus,and such other improvements the Power Authority determines necessary;(b)provideingressandegresstolandswithinsaideasements;(c)cut,trim, remove,and control the growth of vegetation on or adjoining landswithinsaideasementwhichthePowerAuthoritydeterminesinterfere with,threaten,or endanger the operation and maintenance of theProject;(d)clear and keep lands within said easements free from fences,buildings,pavements,or other structures which the Power Authority determines interfere with,threaten,or endanger the operation and maintenance of said line or system or may increase the safety riskstotheCorporationoritsproperty;and (e)license,permit or otherwise agree to the joint use or occupancy of said line or system by any other person,firm,or corporation for telephone,electrification,utility,or transportation purposes. Article B.TERMS AND CONDITIONS 1.Term.This Agreement is effective on »1986. Unless terminated under any other provision hereof,the access rights granted under Section 1 of Article A of this Agreement shall remain in effect until the Power Authority has completed the Feasibility Study or until July 1,1988,whichever comes first.Should the Power Authority obtain financing for the Project on or before July 1,1988,the right-of-way easement rights described in Section 2 of Article A of this Agreement shall take effect upon receipt of financing and remain in effect in perpetuity. 2.Consideration.Upon completion of the Feasibility Study and designation of the location of rights-of-way and easements as provided in Section 4 of Article B of this Agreement,the Power Authority and the Corporation shall negotiate the consideration to be paid or exchanged for the property rights on said lands granted in Section 2 of Article A of this Agreement.However,if the Power Authority and the Corporation do not reach agreement on consideration within 60 days after completion of the Feasibility Study,the Power Authority shall pay the Corporation the fair market value of the property rights to be conveyed.The fair market value shall be determined in the following manner: (a)The Power Authority shall have the land and property rights appraised by an appraiser who is a resident of the State of Alaska andwhocarriesaMemberAppraisalInstitute(MAI)or Senior Real PropertyAppraiser(SRPA)designation.The Power Authority and the Corporation shall negotiate the fair market value of the property rights to be conveyed based on the results of said appraisal. (b)If agreement on the fair market value is not reached within 30daysaftercompletionoftheappraisaldescribedin(a)of this section, the Corporation shall,at its expense,have an independent appraisal conducted by an appraiser who is a resident of the State of Alaska and who carries an MAI or SRPA designation. (i)If the difference between the appraised market values deter-mined in accordance with (a)and (b)of this section is 20 percent or less of the larger value,then the fair market value shall be the value which is midway between the two appraised values. (ii)If the difference between the appraised market values de-termined in accordance with (a)and (b)of this section is greater than 20 percent,then the Power Authority and the Corporation shall negotiate the fair market value of the property rights to be conveyed based on the results of the two appraisals. (c)If agreement on the fair market value is not reached within 30 days after completion of the appaisal described in (b)of this section, the Power Authority and the Corporation shal]mutually select a third independent appraiser who is a resident of Alaska and carries an MAI or SRPA designation.If the parties are unable to agree otherwise,the third appraiser shall be chosen by alternately striking names off a list of 10 such appraisers,made up of 5 names submitted by each party,in which case the Corporation shall strike the first name.The cost ofsaidappraisershallbesharedequallybythePowerAuthorityandthe 200%/EnII4 Page 3 of 4 Corporation,and the fair market value as determined by said appraisershallbebindinguponbothparties. (d)All appraisals conducted under this section shall be based on the fair market value of the portion of the property to be conveyed as a part of the whole property value,whether or not damages or benefits are created as a result of the Project.The Corporation shall be entitled to any Severance damages,valued separately,but any special benefit resulting from the Project shall be offset against the amount of sever- ance damages only,not against the portion conveyed.The fair market value of property rights to be conveyed hereunder,therefore,shall be the value of the part taken as a part of the whole property,plus severance damages that are not offset by special benefits resulting from the Project. (e)The date of evaluation for purposes of this Agreement and all appraisals conducted hereunder shall be the date of the first appraisal conducted. 3.Feasibility Study.The Power Authority shall conduct a Feasibility Study consisting of a technical and economic analysis of theProject.Among other specific items,the Feasibility Study shall (a) analyze potential road and transmission routes reasonably necessary fortheProject,(b)analyze the potential for utilizing geothermal fluids from the Project for direct heating of agriculture and/or aquacultureprojectsinMakushinValley,and (c)conduct a preliminary assessment of hydrothermal resources in Makushin Valley.| 4.Designation of Easements and Rights-of-Way.Upon completion of the Feasibility Study,the Power Authority shall designate lands and property rights reasonably necessary for the Project.All easements and rights-of-way granted hereunder shall be located on lands owned by the Corporation within the area described as follows:Township 72 South, Range 117 West,Sections 31,32,33,and 34;Township 72 South,Range 118 West,Sections 20,21,22,23,24,25,26,27,28,29,32,33,34, 35,and 36;Township 72 South,Range 119 West,Sections 2,3,4,9,10, 11,14,15,16,22,23,and 24;Township 73 South,Range 118 West, Sections 3,4,5,6,7,8,and 9;Seward Meridian.The precise location of right-of-way easements within this area shall be subject to approval by the Corporation to the maximum extent consistent with its own concerns.The Corporation shall exercise its approval rights so as best to facilitate the purpose for which the rights-of-way are to be estab- lished,in accordance with determinations set forth in the Feasibility Study.An as-built survey shall be conducted to establish,by legal description,the exact location of the right-of-way easements and access roads,and the costs of such survey shall be borne by the Power Authority.The as-built survey shall be completed within 12 months after completion of construction. 5.Operations.(a)The Power Authority shall comply with alllawsandregulationsoftheStateofAlaskaandoftheUnitedStates applicable to its operations on Corporation lands and shall obtain all required permits,consents,or licenses.The Corporation makes no representations or warranties as to the requirements of any permission, consent,or license nor as to the availability of such. (b)All of the Tabor to be performed,activities to be conducted, and materials to be furnished in the operations of the Power Authority hereunder shall be at the Power Authority's sole cost and expense,and the Corporation shall not be chargeable with or liable for any part thereof. (c)The Power Authority,its agents,representatives,and con- tractors shall indemnify,save harmless,and defend the Corporation,its officers,and agents from and against any and all liens,claims, damages,losses,liabilities,judgments,or suits of any nature whatsoever which may arise out of the Power Authority's activities oroperationsonCorporationlandsotherthanthosearisinginwholeorin part from the Corporation's act or failure to act. AQAW/EAI/2 Page 4 of 4 (d)The Power Authority shall use due diligence in attempting to maintain the rights-of-way granted herein as private easements,and agrees to take all steps reasonably calculated to ensure that access in and to said lands will be restricted to the agents,officers,and assigns of the Power Authority,and further to take those steps rea- sonably practicable to obviate the creation of a public easement,or otherwise confer any right upon the general public to access all or any portion of said rights-of-way. (e)It is understood by both parties hereto that the failure of the Power Authority,its successors,or assigns to exercise any right herein granted shall not be construed as a waiver or abandonment of the right. 6.Taxes.(a)The Power Authority shall bear sole responsibilityforanytaxesTeviedandassessedagainstthePowerAuthority's interest in the rights-of-way and easements granted under this Agreement or structures,improvements,or personal property placed upon the rights-of-way and easements by the Power Authority or for establishing that the Power Authority's interest is exempt from taxation. (b)The Corporation shall bear sole responsibility for any taxes levied and assessed against the lands within said rights-of-way and easements as if such lands were unimproved and shall pay any taxes levied and assessed against any structures and improvements placed by the Corporation on the lands within said rights-of-way and easements. 7.Assignment.The Power Authority shall have the right,uponwrittennoticetotheCorporation,to assign all or any part of its rights or interest in and to this Agreement to another state agency.Any other assignment,sale,or conveyance by the Power Authority of the rights conferred hereunder shall take place only upon the prior written consent of the Corporation. 8.Binding Effect.This Agreement and all of the terms,cove- nants,and conditions hereof shall extend to and be binding upon the respective heirs,executors,administrators,grantees,successors,and assigns of the parties hereto. 9.Severability.If any part,portion or provision of this Agreement shall be found or declared null,void,or unenforceable for any reason whatsoever by any court of competent jurisdiction or by a governmental agency having authority thereover,then only such part, portion,or provision shall be affected thereby and the remainder of this instrument shall continue in full force and effect. IN WITNESS WHEREOF,the parties hereto have executed this instru- ment as of the date hereinabove first written. THE OUNALASHKA CORPORATION THE ALASKA POWER AUTHORITY BY BY