When Alaskans wonder where the money went as the state budget tightens in the next few years, we invite them to Government Hill, the city's first residential neighborhood.
Unless the state intervenes quickly, the Knik Arm and Bridge Toll Authority (KABATA) will create a grassy, vacant burial ground in place of two attractive homes at the entrance to the west side of this vibrant, historic neighborhood. A motel also is being razed in the same area, all at state expense.
KABATA has spent over $85 million in federal and state transportation funds on this project. Those funds could have been used for worthy transportation projects such as a new Eagle River highway bridge.
But instead, KABATA continues to spend its way through its original $112 million allotment -- including buying homes and attempting to push reluctant local businesses to sell.
We are perplexed as to how the state of Alaska could condone and encourage the acquisition and bulldozing of community structures for a project with such a precarious future:
• The Knik Arm Crossing has limited financing and no realistic prospect of full financing.
• The Knik Arm Crossing has been turned down eight times for federal low-cost loans and grants that KABATA is banking on for up to half the project cost.
• The state nonpartisan Legislative Budget and Audit (LB&A) Committee's audit of the bridge's financial model, released in April, found that KABATA's toll forecasts were "unreasonably optimistic," meaning revenue from the bridge was vastly over-estimated.
• The bridge's estimated cost was acknowledged as $1.6 billion in the audit, up from the $800 million that KABATA stated previously.
• The nonpartisan LB&A audit also found that the cost of toll shortfalls could easily exceed KABATA's estimated $216 million in state funding required for the "reserve fund."
• The Department of Revenue is reissuing an RFP to assess the financial feasibility of the project.
The Government Hill demolition plan and timeline fly in the face of the Legislature, which has declined for the past three sessions to grant KABATA an unlimited state guarantee. Without that guarantee of annual payments, private consortiums are not willing to "invest" in the project.
Given that it will take at least four years to build the bridge, rushing residential neighborhood demolitions is truly an affront. We fail to see any rational reason for the leveling of these residences and destroying businesses now, given the project's profound uncertainty.
Instead KABATA's actions have the appearance of an unsupervised state agency desperately attempting to conduct "business as usual" in the hopes that an aura of inevitability results.
We encourage you to call your legislators and ask them to stop these unnecessary demolitions.
Stephanie Kesler is president of the Government Hill Community Council.