A sign outside the Alaska Industrial Development and Export Authority office in Midtown Anchorage in 2023. (Bill Roth / ADN archive)

A proposed transfer of state land to a development agency for a Mat-Su industrial park that could include data centers may not be allowed under Alaska law, according to a memo from a nonpartisan attorney for the Alaska Legislature.

The Department of Natural Resources is moving to transfer 20,000 acres of state-owned land, at no cost, to the Alaska Industrial Development Export Authority to construct a “multi-use industrial and energy development district” that could include data centers, according to AIDEA’s application.

The land transfer would be allowed if done for “a public purpose,” under the Alaska Constitution. However, Alpheus Bullard, an attorney for the Alaska Legislature, wrote in a legal memo earlier this month that it remains unclear whether the state would have the ability to determine whether the land is, in fact, used for a public purpose once it is transferred to AIDEA.

“Without this analysis, the conveyance may raise legal issues,” wrote Bullard.

The legal analysis was the basis for a letter signed by five members of the Senate Resources Committee, asking Natural Resources Commissioner John Crowther to clarify whether the state is in a position to ensure that the public interest is protected if the land transfer goes through.

“We are concerned that the uses for the AIDEA conveyance are too vaguely premised; that the public interest cannot be evaluated or made certain; and that DNR has not and cannot perform its legally mandated due diligence under these circumstances,” the lawmakers wrote in their letter to the commissioner.

The letter, dated Sept. 9, is signed by Senate Resources Committee Chair Cathy Giessel, R-Anchorage; Sen. Bill Wielechowski, D-Anchorage; Sen. Matt Claman, D-Anchorage; Sen. Forrest Dunbar, D-Anchorage; and Sen. Scott Kawasaki, D-Fairbanks.

Sens. Matt Claman (D-Anchorage), Cathy Giessel (R-Anchorage), and Bill Wielechowski (D-Anchorage) listen to comments from Luke Saugier, senior vice president of Hilcorp Alaska, on Jan. 23, 2025, in Juneau. (Marc Lester / ADN archive)

It is the second letter sent by the five lawmakers cautioning the department against proceeding with the project. In the first letter, sent last month, lawmakers wrote that they “do not think (the land conveyance) sets good public precedence, and there are outstanding legal and public interest issues that could risk its legitimacy, so any progress made by AIDEA toward the proposal could ultimately be invalidated.”

Rep. Kevin McCabe, a Big Lake Republican who represents the district that includes the land under consideration, pushed back against the earlier concerns raised by the Senate Resources Committee.

McCabe said earlier this month that AIDEA has reneged on its plan to pursue data center development on the property.

“Speculation about a project that does not exist should not be used to characterize — or oppose — the land conveyance currently before DNR,” McCabe wrote in a letter address to the Senate Resources Committee on Sept. 4.

“If a data center is someday proposed, we can have that debate then,” McCabe wrote. “Today, there is no such project.”

McCabe said that Mat-Su residents could benefit from the economic opportunities presented by the development, and they should be given deference in determining whether the project should move forward.

The second Senate Resources Committee letter referenced McCabe’s assurances from the department regarding the prospect of data construction, but Giessel said in an interview this week that additional assurances were needed.

“According to our attorney, there needs to be more specificity, and DNR needs to ensure that in fact this is being used consistent with the public interest,” Giessel said.

AIDEA, an embattled public corporation overseen by a board whose members were appointed by Gov. Mike Dunleavy, had indicated that the plans for the land use have not been finalized, even as it seeks the massive land parcel near Houston. According to its application, its goal is to establish a development district that “catalyzes private investment and creates durable jobs for Mat-Su residents.”

In response to questions about the letter, a Department of Natural Resources spokesperson said department staff are closely reviewing the legal analysis and the letter from lawmakers, “along with more than 2,100 comments” submitted by other members of the public through Monday afternoon.

“The proposed conveyance is a noncompetitive sale to a public applicant given AIDEA’s status as a public corporation, for a proposed project to develop a multi-use industrial and energy development district. Any final decision will address feedback from the public, agencies, and Legislature,” DNR spokesperson Lorraine Henry wrote.

Giessel said several aspects of the proposal have raised concern among lawmakers and the public, including the amount of land being conveyed and whether the Dunleavy administration can be trusted to execute a development project in the public interest.

“This is a very, very large conveyance of land to an agency that I hear about a lot from the public,” Giessel said. “Something this large, this vaguely described, raises concerns that this land is being conveyed for private purposes, under the Dunleavy administration’s seeming guidance to move state land into private hands.”

Even if the department could prove that a public interest is being served, Giessel said she is concerned about the construction of data centers in Southcentral Alaska due to its ongoing energy shortage.

“The idea of putting in a large energy consumer in Southcentral at this time seems contradictory to solving the energy supply for private citizens, and even the businesses that are already present in Southcentral,” said Giessel, adding that she supports a moratorium on data center development until the state Legislature passes new laws governing their construction.