This story was originally published Oct. 8, 2005.
In late February 1988, half a dozen Japanese businessmen in dark suits waited in the belly of the Matanuska-Susitna Borough building. Howling winds shook the walls outside, where temperatures fell to 40 below.
They arrived with the notion of developing an international ski resort in the Valley.
“It’s freezing, it’s dark. You couldn’t have picked a worse day to showcase the place,” said borough manager John Duffy.
That same night, Mitsui Ltd., a mega-corporation out of Tokyo, bid to lease thousands of acres at the mouth of Hatcher Pass. Mitsui executives dreamed of a sprawling, $221 million ski resort with eight lifts, hundreds of condos, a dude ranch and even hot-air-balloon rides.
During a grim time for the state economy, when sinking oil prices crippled property values, excitement over the Japanese conglomerate’s arrival hummed throughout the Assembly chambers.
“You could cut the air with a knife,” said Jim Turner, a longtime skier who owns Turner’s Corner near Hatcher Pass and attended the land auction as an advocate for a smaller, regional ski area.
Two years later, Mitsui’s grand plans evaporated as studies showed the giant resort wouldn’t attract enough foreign skiers to pay for itself and, maybe more importantly, Alaska lost its bid to host an upcoming Winter Olympics.
In 1992, Idaho businessman Fred Rogers appeared with big plans for a ski resort at Hatcher Pass but little money to actually follow through. That attempt failed too.
Today, another developer -- one of Alaska’s biggest, Anchorage-based JL Properties -- wants to try it again. JL would use Government Peak at Hatcher Pass as the focal point for a regional Alpine ski resort, commercial village and hundreds of new homes.
Could it really work this time? Other important questions remain unanswered -- is there enough public support and political backing behind the $41-million-plus plan, and can the Assembly and the developer agree on a fair deal?
Proponents of a ski area hope that after two decades of wishing, the winds are finally blowing in their favor. They have reason to be optimistic.
Over the past 20 years, while the Hatcher Pass ski project languished, JL Properties partners John Rubini and Leonard Hyde became two of the most successful developers in Alaska, amassing a collection of office buildings, apartment units and other holdings worth hundreds of millions of dollars.
But ski areas are notoriously hard to launch, and borough officials say no local developer would be willing to build one without plenty of incentives. Sure enough, when JL Properties announced its plan for funding the ski area in September, it called for millions in public money.
Nearly a quarter of the cash would come from the borough. JL also plans to ask for an additional $24 million in financial assistance from another public entity, the Alaska Industrial Development and Export Authority.
JL hasn’t officially requested AIDEA’s help yet, but borough deputy mayor Jim Colver, a ski-area advocate, says the plan won’t work without the agency’s blessing -- and its wallet. To that end, few developers have as much insight into how AIDEA works and what it looks for from applicants as JL Properties has.
Through the state Department of Law, JL Properties co-owner John Rubini worked for AIDEA as a lawyer for years. Rubini was not a member of AIDEA staff, but he gave legal advice and negotiated the terms and structures of business deals, most recently on the failed Alaska Seafood International project in Anchorage.
Two former AIDEA chiefs -- executive directors Randy Simmons and Riley Snell -- also went to work for JL Properties. (Rubini says Snell joined within the past two months, while Simmons has since retired.)
David Germer, a former AIDEA project manager, and Keith Laufer, formerly the agency’s deputy finance director, are both on the JL Properties team.
What does all this mean? In 2003, Rubini told the Anchorage Press that JL Properties didn’t work with AIDEA because of Rubini’s past ties to the organization.
Things are different now, he said.
“I stopped doing legal work for AIDEA a couple years ago, so the conflict ran its course,” Rubini said in a recent phone interview. Later, at his office in Anchorage, Rubini added that he never worked for AIDEA on the previous attempts to develop Hatcher Pass and that his company’s ties to the agency pass every legal test.
Jim McMillan, AIDEA deputy director of credit and business development, said Rubini’s past work for the agency wouldn’t help the ski area project gain funding, but Rubini’s reputation as a developer might.
“He knows how to take on projects, manage projects and have them be successful,” McMillan said. “That did play a part in us being interested.
”In the only public assertion of potential conflict of interest in the project thus far, Assemblyman Bill Allen at the September Assembly meeting questioned Colver’s connections to AIDEA. Colver represents the Hatcher Pass area on the Assembly. His stepbrother, Mike Barry, sits on the AIDEA board of directors.
Borough Attorney Teresa Williams investigated and on Monday said there is likely no legal conflict of interest.
Like the Alaska Railroad, AIDEA is a public corporation started by the state. It exists to create jobs and boost Alaska’s economy.
AIDEA is often linked to big, sometimes embarrassing projects such as the dormant, $300-million-plus experimental coal plant near Healy. But much of what the agency does is help small businesses by backing loans through private banks.
That program helped fund the new Mat-Su Title office building on the Palmer-Wasilla Highway, for example, and the Grand View Inn and Suites along the Parks Highway in Wasilla, McMillan said.
Creating a Hatcher Pass ski resort won’t be as simple.
A 2002 study administered by AIDEA described the ski resort business as stagnant, reporting that the number of ski areas nationwide dropped from 800 to 500 over the previous 20 years.
But unlike earlier proposals, the latest ski resort plan relies mostly on regional skiers instead of tourists. The idea is that enough people now live in the Valley -- the population has more than tripled since 1980 -- to buy all those lift tickets.
Rubini said it also helps that the land to be used for the ski area is now owned by the borough rather than the state.
Plus, the borough has spent $250,000 in matching funds toward paving Hatcher Pass Road as well as provided the area with electricity and used rubble from a landslide to start a parking lot for future skiers.
That means the borough is already invested in the project. Whether it should take the next step and commit more public resources to an inherently risky proposal is another question.At least one initial doubter has become more optimistic.
On Sept. 20, Allen said he saw problems with JL Properties' plan: It asked too much of the borough and didn’t give enough in return. Monday, Allen said he’s taken a closer look at the proposal and, while far from perfect, it’s a better deal than he’d thought.
“I think we’re awfully close to being able to say yes,” Allen said.
Duffy, the borough manager, said that if this attempt at a ski area fails, the borough would just have to try again.
But Turner, who, like Duffy, watched past ski-area developers come and go over the decades, says that with heavyweights JL Properties and AIDEA involved, it may be a question of now or never.
“If they can’t do it, this project isn’t going to happen,” he said.