Alaska legislators press natural resources commissioner on no-cost state land transfers
The Senate Resources Committee subpoenaed John Crowther to get answers on the state’s plans for no-cost land transfers for private development under disputed ‘public and charitable use’ statute
As the Alaska Department of Natural Resources is deliberating on a controversial no-cost state land transfer in the Matanuska-Susitna Borough, legal questions remain around whether the transfer of public lands for private development qualifies as public or charitable use.
The state could transfer 20,000 acres near Houston to its economic development agency, the Alaska Industrial Development and Export Authority, for a proposed multi-use industrial and energy development district — a proposal that has sparked controversy because it could include data center development.
Under a rare legislative subpoena, DNR Commissioner John Crowther appeared before the Senate Resources Committee on Monday to answer questions about the department’s recent slew of proposed state land transfers to several state agencies at no cost under a “public and charitable use” statute, including the Mat-Su proposal.
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The committee subpoenaed Crowther after he declined to appear at another hearing earlier this month. Department officials said at the time he did not have permission from Gov. Mike Dunleavy to appear.
Senate Majority Leader Cathy Giessel, R-Anchorage, listens to a presentation about natural gas during a March 12, 2025, hearing of the Senate Resources Committee, which she chairs. (Photo by Yereth Rosen/Alaska Beacon)
Sen. Cathy Giessel, R-Anchorage, who chairs the Senate Resources Committee, questioned the uptick in no-cost state land transfers over the last year by DNR to a variety of state agencies and local municipalities, where they could potentially be leased instead for millions of dollars each year.
“It feels like an appropriation,” Giessel said. “An appropriation of a very, very valuable asset, and that is Alaska land, Alaska public land. So that authority rests with the Legislature, and that raises questions.”
Senators pressed Crowther on whether a final decision from DNR is expected on the 20,000 acre Mat-Su proposal before a new governor is set to take office on Dec. 7, to which Crowther responded, “it’s certainly possible.”
However, Crowther said a final decision could be challenged by an administrative appeal or lawsuit. “It’s of course subject to judicial review,” he said. “So we anticipate moving through our process as expeditiously as possible. And some of those processes, we don’t have control over the timeline.”
A lawsuit filed Oct. 22 in state Superior Court is challenging the Mat-Su proposal as unconstitutional. The suit was filed by former University of Alaska Regent Eric Forrer and former Republican state Rep. David Eastman, and is intended to tie up the transfer and prevent DNR from pushing it through before Gov. Mike Dunleavy leaves office, Forrer told the Mat-Su Sentinel.
DNR issued a preliminary decision in July for the proposed transfer of the 20,000 acres near Houston to AIDEA. The proposal sparked public outcry, particularly as AIDEA’s list of potential development projects included data centers.
DNR is now reviewing more than 2,100 public comments before issuing a final decision. The comments include opposition from nearby communities, the Mat-Su Borough Assembly and some members of the Senate Resources Committee who wrote letters criticizing AIDEA’s proposal as too vague and raising legal concerns around whether it serves a sufficient public purpose.
DNR and AIDEA officials have maintained that AIDEA’s status as a state-owned economic development agency allows for the state land transfers under a “public and charitable use” statute. AIDEA officials have maintained that it is unlikely that data centers would be part of the development in the Mat-Su, due to a lack of a reliable energy source. No projects or contracts have been confirmed, AIDEA officials said.
On Monday, Crowther said that state land transfers for private development is a priority of the Dunleavy administration.
“I think it is very fair to say that using our land for development has been a governor’s priority, and consequently, the department’s been working on that in several different respects,” he said.
Crowther said it’s a priority of the Dunleavy administration “to maximize use and development of state lands, and to look at how we can partner with these state agencies that have public purposes and public missions to make land that is in theory eligible for private use and development, but hasn’t seen that.”
Officials with Dunleavy’s office did not respond to questions about the legality of the state land transfer, or local opposition to the Mat-Su land transfer proposal on Tuesday.
Senators question regulation change for definition of ‘public purpose’
DNR recently changed state regulations to expand the definition of “public purpose” for state land transfers to include private development.
Anchorage Democrat Sen. Forrest Dunbar wanted to know if the proposed transfers would have been legal before the regulation change. Crowther said the updated regulatory language clarifies existing state law and DNR’s authority.
In March, DNR adopted changes in its regulations after a public comment period. Those changes included an expansion of the definition of “public purpose” to include supporting “private commerce or industry that contributes to the economic development of the state” and “is otherwise determined by the commissioner to be in the best interest of the state.”
At the same time, Giessel noted that the governor introduced a similar bill that included allowing state land transfers for commercial development parks, but it failed to advance in the Legislature.
Crowther said DNR’s mission to promote development of state lands and resources has been ongoing, “for several years in several different avenues, and that regulation change was part of that.”
He said that has included projects including renewable energy, housing, gravel mining and other development.
“That theme runs throughout of: we need to use our lands and our resources in ways to address these, you know, in some ways very consistent, but in some ways very different cost access challenges that are stymying public interest across the spectrum,” he said.
“Other states are trying to tackle these same challenges and are doing so through adaptive land offerings and land management approaches,” he continued. “And so that was a motivation both for that regulation change and some of these other initiatives.”
Giessel said she began to take notice of the number of state land conveyances over the summer, particularly the large Mat-Su parcel and another 885 acres at Port MacKenzie slated for transfer to AIDEA. The Port MacKenzie proposal includes developing a rail-support and cargo logistics area to serve a future railroad link between the port and the railroad’s mainline near Houston.
Giessel questioned why DNR did not consider leases for agricultural use at the Port MacKenzie site.
“This land is still productive, could be productive for farming, and yet you’re conveying it to AIDEA for apparently industrial uses,” she said.
Christy Collis, director of the Division of Mining, Land and Water, appeared at the hearing with Crowther and said the proposed use of the parcel is tied to obligations with the Mat-Su Borough but the department will evaluate farmers’ concerns in their review of the public comments. A decision on that parcel is also expected in the coming months, but there is no set timeline.
Senators raise concerns with AIDEA, public input and oversight
Crowther told senators that officials with AIDEA approached DNR about the no-cost state land transfers before submitting proposals for the Mat-Su and Port MacKenzie parcels.
AIDEA has drawn public scrutiny as it directs some of the most polarizing development projects in the state — from Arctic oil exploration to the proposed Ambler Road project. AIDEA is run by a seven-member board appointed by the governor, but does not report directly to the executive branch and manages investments independently.
Dunbar asked Crowther how DNR weighs the benefits to the public of land transfers specifically for private development.
Crowther said AIDEA is a state-owned agency that has a broad mission to promote economic growth and generate revenue for the state.
“As long as their application (was) identifying a suite of activities consistent with that mission, and not identifying that they plan to abrogate that mission, I think we would interpret that as being cognizably appropriate under the conveyance,” he said.
Anchorage Democrat Bill Wielechowski pressed Crowther on why DNR did not keep a reversionary interest in the Mat-Su proposal with AIDEA, which would allow land not suitable for development to be automatically transferred back to state ownership.
Crowther said historically it’s been the state’s policy to maintain a reversionary interest, but it can also create challenges for developers to get financing for their projects.
“We wanted to provide flexibility for AIDEA as they develop options and plans, but it’s obviously been identified as a significant matter of legal concern and public concern,” Crowther said. “So we’re looking closely at it.”
Later in the hearing, Wielechowski criticized what he said was a lack of transparency and oversight of DNR’s no-cost land transfer to AIDEA for private development.
“It’s a huge loophole that is being created here,” he said, pointing to how DNR’s land use proposals are subject to greater public oversight than AIDEA’s.
“We’ve got a constitutional obligation to manage our resources, including our lands, and if you’re giving the lands away for nothing with no reversionary interest, very little protection for the public, to a board that’s not confirmed by the Legislature, has basically zero public oversight—it seems like it creates this giant loophole, for which AIDEA then has the ability to just go out and do whatever they want with the land, in a way that DNR would not have the ability, and that seems like, that’s what’s causing, I think, a lot of consternation and a lot of concern among the public and legislators.”
Alaska legislators press natural resources commissioner on no-cost state land transfers
As the Alaska Department of Natural Resources is deliberating on a controversial no-cost state land transfer in the Matanuska-Susitna Borough, legal questions remain around whether the transfer of public lands for private development qualifies as public or charitable use.
The state could transfer 20,000 acres near Houston to its economic development agency, the Alaska Industrial Development and Export Authority, for a proposed multi-use industrial and energy development district — a proposal that has sparked controversy because it could include data center development.
Under a rare legislative subpoena, DNR Commissioner John Crowther appeared before the Senate Resources Committee on Monday to answer questions about the department’s recent slew of proposed state land transfers to several state agencies at no cost under a “public and charitable use” statute, including the Mat-Su proposal.
The committee subpoenaed Crowther after he declined to appear at another hearing earlier this month. Department officials said at the time he did not have permission from Gov. Mike Dunleavy to appear.
Sen. Cathy Giessel, R-Anchorage, who chairs the Senate Resources Committee, questioned the uptick in no-cost state land transfers over the last year by DNR to a variety of state agencies and local municipalities, where they could potentially be leased instead for millions of dollars each year.
“It feels like an appropriation,” Giessel said. “An appropriation of a very, very valuable asset, and that is Alaska land, Alaska public land. So that authority rests with the Legislature, and that raises questions.”
Senators pressed Crowther on whether a final decision from DNR is expected on the 20,000 acre Mat-Su proposal before a new governor is set to take office on Dec. 7, to which Crowther responded, “it’s certainly possible.”
However, Crowther said a final decision could be challenged by an administrative appeal or lawsuit. “It’s of course subject to judicial review,” he said. “So we anticipate moving through our process as expeditiously as possible. And some of those processes, we don’t have control over the timeline.”
A lawsuit filed Oct. 22 in state Superior Court is challenging the Mat-Su proposal as unconstitutional. The suit was filed by former University of Alaska Regent Eric Forrer and former Republican state Rep. David Eastman, and is intended to tie up the transfer and prevent DNR from pushing it through before Gov. Mike Dunleavy leaves office, Forrer told the Mat-Su Sentinel.
DNR issued a preliminary decision in July for the proposed transfer of the 20,000 acres near Houston to AIDEA. The proposal sparked public outcry, particularly as AIDEA’s list of potential development projects included data centers.
DNR is now reviewing more than 2,100 public comments before issuing a final decision. The comments include opposition from nearby communities, the Mat-Su Borough Assembly and some members of the Senate Resources Committee who wrote letters criticizing AIDEA’s proposal as too vague and raising legal concerns around whether it serves a sufficient public purpose.
DNR and AIDEA officials have maintained that AIDEA’s status as a state-owned economic development agency allows for the state land transfers under a “public and charitable use” statute. AIDEA officials have maintained that it is unlikely that data centers would be part of the development in the Mat-Su, due to a lack of a reliable energy source. No projects or contracts have been confirmed, AIDEA officials said.
On Monday, Crowther said that state land transfers for private development is a priority of the Dunleavy administration.
“I think it is very fair to say that using our land for development has been a governor’s priority, and consequently, the department’s been working on that in several different respects,” he said.
Crowther said it’s a priority of the Dunleavy administration “to maximize use and development of state lands, and to look at how we can partner with these state agencies that have public purposes and public missions to make land that is in theory eligible for private use and development, but hasn’t seen that.”
Officials with Dunleavy’s office did not respond to questions about the legality of the state land transfer, or local opposition to the Mat-Su land transfer proposal on Tuesday.
Senators question regulation change for definition of ‘public purpose’
DNR recently changed state regulations to expand the definition of “public purpose” for state land transfers to include private development.
Anchorage Democrat Sen. Forrest Dunbar wanted to know if the proposed transfers would have been legal before the regulation change. Crowther said the updated regulatory language clarifies existing state law and DNR’s authority.
In March, DNR adopted changes in its regulations after a public comment period. Those changes included an expansion of the definition of “public purpose” to include supporting “private commerce or industry that contributes to the economic development of the state” and “is otherwise determined by the commissioner to be in the best interest of the state.”
At the same time, Giessel noted that the governor introduced a similar bill that included allowing state land transfers for commercial development parks, but it failed to advance in the Legislature.
Crowther said DNR’s mission to promote development of state lands and resources has been ongoing, “for several years in several different avenues, and that regulation change was part of that.”
He said that has included projects including renewable energy, housing, gravel mining and other development.
“That theme runs throughout of: we need to use our lands and our resources in ways to address these, you know, in some ways very consistent, but in some ways very different cost access challenges that are stymying public interest across the spectrum,” he said.
“Other states are trying to tackle these same challenges and are doing so through adaptive land offerings and land management approaches,” he continued. “And so that was a motivation both for that regulation change and some of these other initiatives.”
Giessel said she began to take notice of the number of state land conveyances over the summer, particularly the large Mat-Su parcel and another 885 acres at Port MacKenzie slated for transfer to AIDEA. The Port MacKenzie proposal includes developing a rail-support and cargo logistics area to serve a future railroad link between the port and the railroad’s mainline near Houston.
Giessel questioned why DNR did not consider leases for agricultural use at the Port MacKenzie site.
“This land is still productive, could be productive for farming, and yet you’re conveying it to AIDEA for apparently industrial uses,” she said.
Christy Collis, director of the Division of Mining, Land and Water, appeared at the hearing with Crowther and said the proposed use of the parcel is tied to obligations with the Mat-Su Borough but the department will evaluate farmers’ concerns in their review of the public comments. A decision on that parcel is also expected in the coming months, but there is no set timeline.
Senators raise concerns with AIDEA, public input and oversight
Crowther told senators that officials with AIDEA approached DNR about the no-cost state land transfers before submitting proposals for the Mat-Su and Port MacKenzie parcels.
AIDEA has drawn public scrutiny as it directs some of the most polarizing development projects in the state — from Arctic oil exploration to the proposed Ambler Road project. AIDEA is run by a seven-member board appointed by the governor, but does not report directly to the executive branch and manages investments independently.
Dunbar asked Crowther how DNR weighs the benefits to the public of land transfers specifically for private development.
Crowther said AIDEA is a state-owned agency that has a broad mission to promote economic growth and generate revenue for the state.
“As long as their application (was) identifying a suite of activities consistent with that mission, and not identifying that they plan to abrogate that mission, I think we would interpret that as being cognizably appropriate under the conveyance,” he said.
Anchorage Democrat Bill Wielechowski pressed Crowther on why DNR did not keep a reversionary interest in the Mat-Su proposal with AIDEA, which would allow land not suitable for development to be automatically transferred back to state ownership.
Crowther said historically it’s been the state’s policy to maintain a reversionary interest, but it can also create challenges for developers to get financing for their projects.
“We wanted to provide flexibility for AIDEA as they develop options and plans, but it’s obviously been identified as a significant matter of legal concern and public concern,” Crowther said. “So we’re looking closely at it.”
Later in the hearing, Wielechowski criticized what he said was a lack of transparency and oversight of DNR’s no-cost land transfer to AIDEA for private development.
“It’s a huge loophole that is being created here,” he said, pointing to how DNR’s land use proposals are subject to greater public oversight than AIDEA’s.
“We’ve got a constitutional obligation to manage our resources, including our lands, and if you’re giving the lands away for nothing with no reversionary interest, very little protection for the public, to a board that’s not confirmed by the Legislature, has basically zero public oversight—it seems like it creates this giant loophole, for which AIDEA then has the ability to just go out and do whatever they want with the land, in a way that DNR would not have the ability, and that seems like, that’s what’s causing, I think, a lot of consternation and a lot of concern among the public and legislators.”