It’s not likely the Haines Borough would have to compensate landowners if resource extraction was prohibited in the Mud Bay neighborhood, according to the borough attorney. But, it is possible. The question of whether the activity should be restricted in Mud Bay is still on the table. A committee of planning commission members will look further into the issue.
“When I went through our records for the last 18 months, since January 2016, 70 percent of our income has been off Mud Bay resources,” said Mud Bay resident Sylvia Heinz at a planning commission meeting in June. She’s one of several residents who have testified at public hearings about the issue of resource extraction in the rural residential neighborhood.
Katey Palmer said the issue is already answered in borough code, and resource extraction should require a conditional use permit.
“Mud Bay planning zoning district, under conditional uses, commercial enterprise is listed. So it’s already described and I assume when you’re talking about extractive industries they would be commercial enterprises,” said Palmer.
But the planning commission has not come to a conclusion on that yet. And that’s what’s been at issue for the past couple months. Right now, resource extraction isn’t outwardly addressed in the code for the Mud Bay zoning district. That means you can sell resources, like lumber, from your own property without getting a permit.
The planning commission has been trying to figure out if resource extraction should be allowed to continue with no restrictions, whether you should have to get a conditional use permit, or whether resource extraction should be totally prohibited in the neighborhood.
In addition to local neighbors, the University of Alaska and the Alaska Mental Health Trust both sent letters opposing restrictions on resource extraction. The organizations own hundreds of acres in Mud Bay.
Wyn Menefee, deputy director of the Trust Land Office, spoke by phone at the June planning meeting.
“The Trust Land Office has significant land holdings in the Mud Bay area and is not supportive of the changes that would restrict, limit or prohibit the TLO from meeting its mission to generate revenue for the Alaska Mental Health Trust Authority,” said Menefee.
As the conversation progressed, lawyers for Mud Bay property owner Roger Schnabel sent the planning commission a letter. Schnabel’s company, Skookum Holdings, owns about 150 acres of land in Mud Bay. Daniel Bruce argues restricting his client’s right to commercially remove timber from his property would amount to an ‘unconstitutional taking,’ and entitle Schnabel to awards and damages against the borough.
Haines Borough attorney Patrick Munson looked into whether the borough prohibiting resource extraction in the neighborhood could constitute a ‘taking.’
That would require the municipality to compensate property owners. But Munson said a taking would be hard to prove. Here’s what he concluded:
Prohibiting resource extraction in Mud Bay wouldn’t amount to a general taking of property throughout the neighborhood. But that could be the case for individual properties. That is, if the restriction ‘unreasonably’ stands in the way of how the owner intended to use the property for economic benefit.
Munson says the risk to the borough is fairly low here, because it would be hard for property owners to prove this. He says saying landowners need a conditional use permit for resource extraction, rather than imposing an all-out ban, would lower that risk even more.
According to Munson, there are a couple things a private landowner could prove that could require compensation from the borough. For one, if restrictions hindered all economically feasible uses of the property. But he said that would be ‘extremely unlikely.’ Or, if municipal regulations stood in the way of a landowner’s expectation that they would be able to extract resources. That expectation would need to be backed by a financial investment.
In a June memo, borough manager Debra Schnabel said the planning commission needs to focus on defining resource extraction as it applies to zones throughout the borough.
At their most recent meeting, the commission formed a committee to continue the discussion around this issue. Rob Goldberg, Brenda Josephson, and Donnie Turner will serve on the committee. In Haines, I’m Abbey Collins.