LOBBYIST: Unused visitor center funds used to purchase ex-Stevens aide's property.
By TOM KIZZIA
Anchorage Daily News
Published: April 23, 2006
Last Modified: April 23, 2006 at 03:28 AM
SEWARD -- When Sen. Ted Stevens diverted federal land-purchase funds to the Alaska SeaLife Center last summer, one of the biggest beneficiaries turned out to be his former legislative aide, Trevor McCabe.
McCabe, a Seward native who is now a high-profile fish lobbyist, was looking for a buyer for the Arcade Building, a derelict waterfront structure in downtown Seward that had recently held a pawn shop. McCabe had purchased the Arcade in 2003, at a time when the National Park Service had begun looking for downtown land to build a new $20 million visitor center.
The federal government eventually bought several other parcels nearby, including a second one owned by McCabe. But the government balked at McCabe's asking price for the Arcade Building, a brick-red single-story building riddled with lead and asbestos. By July 2005, negotiations had reached a dead end.
But in August, Stevens used his power over congressional appropriations to transfer all leftover money in the visitor center's land-purchase fund to the Alaska SeaLife Center, a research and tourism facility located on Seward's waterfront. The move surprised the city of Seward, which had been slated to receive the $1.6 million in leftover funds for its own projects.
The SeaLife Center then agreed to spend $558,000 of the federal windfall to buy the Arcade lot from McCabe and his partner, Dale Lindsey, a prominent Seward oil-sales businessman.
Sen. Stevens' office and the SeaLife Center both say the money was diverted and spent to help the marine facility and to revitalize downtown Seward, not to bail out McCabe.
But the transaction has opened a rift between the SeaLife Center and city administrators.
City Manager Clark Corbridge wrote the SeaLife Center in March, asserting city approval of such purchases is necessary "to avoid future problems and possible allegations of impropriety." He never said publicly what he meant by "impropriety" and refused to be interviewed.
SeaLife Center officials protested vigorously, with several City Council members talking of firing Corbridge. Center officials insisted their private nonprofit operator, the Seward Association for the Advancement of Marine Science, did not have to follow a public process to buy the Arcade Building from McCabe.
The dispute continues to roil Seward, with the debate now focused on how much independence the marine facility has under its lease and operating agreement with the city. In packed city meetings and local letters to the editor, critics are challenging a second private deal between the SeaLife Center and the former Stevens aide, in which McCabe is developing a day-boat tour and dock under an exclusive no-bid contract.
The commotion has reached the point where Seward vice-mayor Willard Dunham, who is also on the SeaLife Center board, told the local paper last week he fears unfounded rumors about the center's purchase of the Arcade Building could "sour the pond" and jeopardize future federal funding for Seward projects.
A STEVENS FAVORITE
The Alaska SeaLife Center has long been a favorite of Stevens, who has steered more than $50 million in federal funds to the nonprofit facility since it opened in 1998.
McCabe, who worked eight years for Stevens in Washington, D.C., also has close ties to the marine facility. He is a past board member and helped provide financial backing when he was head of the At-Sea Processors' Association, a fishing group.
SeaLife Center officials say they were never instructed by Stevens to use the money to buy McCabe's property. They say they jumped at buying the Arcade because they desperately need new office space and his lot was ideally situated, kitty-corner from their waterfront aquarium.
Center officials say they plan to use some of the remaining Stevens money to draw up a master plan for waterfront projects. If that plan agrees, they hope to obtain funds in the future to build offices on the Arcade lot. The appropriation says the marine center can spend the money on projects that "complement the new Federal facility." They say a new office building will qualify.
"In a perfect world, we would have preferred to do a master plan first," said SeaLife Center finance director Carl Stevens. But he said it was important to move swiftly to grab the Arcade lot, which is the only property on what is seen as a major future migration corridor for tourists, between the SeaLife Center and the new Kenai Fjords National Park visitor center.
A spokeswoman for Stevens said the funds were transferred away from the city to help the SeaLife Center.
"We knew the SeaLife Center was going to engage in waterfront development projects, and we have a long history with them," said Stevens spokeswoman Courtney Boone.
"It's my understanding that that (funds transfer) was not at Trevor McCabe's request or on behalf of Trevor McCabe."
McCabe, who worked in the senator's office from 1991 to 1999, declined to be interviewed about the transaction. He and Lindsey, who form the Centennial Group with a third partner, released a general statement about their longtime support for the federal visitor center construction and downtown revitalization.
In response to e-mailed questions, they said they were paid "low" prices for the two buildings, which Lindsey said have a great location and view of Resurrection Bay. "These are the best commercial properties in downtown Seward," he said.
LONG HISTORY
Stevens has a long and well-known interest in promoting economic development in Seward, a scrappy railway terminal town that was hurt badly by the 1964 earthquake and related tsunami.
His support for the $56 million Alaska SeaLife Center is an example. Federal money, much of it for research into Steller sea lions and other marine mammals, has helped the SeaLife Center survive and even thrive after its original plan for supporting itself through visitor admissions proved illusory.
This year's $16 million operating budget includes $9 million in federal funds, said center finance director Stevens. That doesn't include the $1.6 million that showed up unexpectedly last August.
The SeaLife Center now draws more than 140,000 visitors a year in Seward, including many cruise ship passengers. But the downtown blocks uphill from the four-story facility have not exactly prospered. Tourist shops, bars and unused buildings are scattered throughout, with empty car-park lots like missing teeth among the storefronts.
The new national park visitor center is the latest federal plan for helping downtown Seward.
Since its creation by Congress in 1980, Kenai Fjords National Park has served the public out of offices near Seward's small boat harbor. An effort has been under way for a decade to build the park a new visitor center. The U.S. Forest Service, which manages the surrounding Chugach National Forest, would also have offices in the new multi-agency building. And the city of Seward joined in with a conference room big enough to hold small conventions.
The building is to be named the Mary Lowell Center, after the Native-Russian woman who sold her American husband's homestead in 1903 to the founders of Seward.
Finding a location for the new federal facility proved challenging. The first site chosen had to be dropped because of earthquake hazards. The second, for a building owned by the University of Alaska, fell apart in 2002 after the university withdrew support. The city then formed a waterfront commission to look for a new site, hiring a consultant with federal funds.
In November 2002, two months before the first public meeting called by the waterfront consultant, McCabe took out an option to buy two old buildings opposite the bay, Old Solly's and the Arcade.
BASKETBALL STAR
McCabe, 36, grew up in Seward, where he was a high school basketball star and Mount Marathon runner. His ties to Stevens are strong. As the senator's fisheries aide, McCabe was the chief political broker for the 1998 American Fisheries Act, which privatized valuable stocks of pollock in the Bering Sea. He left the next year to become executive director of the At-Sea Processors Association, the factory trawler cooperative made possible by the act. A Harvard graduate and lawyer, McCabe remains an influential player in the big-stakes fish politics. Until last September his consulting business partner was Stevens' son, state Sen. Ben Stevens.
In the written statement provided in lieu of an interview, Lindsey said McCabe tied up the two properties in 2002 with plans to buy and renovate them. He had just finished remodeling another office building in town, a project widely praised.
Lindsey said McCabe began the purchase of the two properties "before the site selection process," when the Park Service still planned to build on university land. However, an Oct. 10 story in the Seward Phoenix Log, three weeks before McCabe signed the option, reported that the university had been "getting cold feet" on the joint project since August and was reconsidering its participation.
By April 2003, in any event, consultants were looking at building the new multi-agency facility downtown. McCabe exercised his option on the two downtown Seward buildings that month, buying them through the Centennial Group.
His partner was Seward businessman Lindsey, who had built up a local fuel distributorship into Petro Marine and Harbor Enterprises, the largest independent petroleum distributor in Alaska. Lindsey has wielded considerable influence over the years on behalf of Seward projects, including the SeaLife Center, and has been an active contributor to political candidates, including Stevens. The third partner in the group is Steve Zelener.
In his written statement, Lindsey said he and McCabe teamed up to offer to build the new visitor center and lease it to the National Park Service. They even drew up plans for such a building, arguing it would expedite the project. The government turned them down and the site selection process continued.
Negotiations went on for nearly two years. The government eventually purchased four properties on either side of Fifth Avenue, including Old Solly's from the Centennial Group.
Lindsey and McCabe say Old Solly's was a good deal for the government at $455,000, going for less than their appraised value. But Chuck Gilbert, the National Park Service acquisitions chief in Alaska, said it was 30 percent above the market value set by the government's appraiser.
Meanwhile, negotiations for the Arcade Building faltered. McCabe did not say what he paid for the building, but an initial government appraisal of $174,000 drew objections from the Centennial Group, according to Gilbert. After inspectors found the 1943 building full of asbestos, a second appraisal dropped the value to $94,000. The government was figuring it would have to add the cost of dismantling the hazardous building after the purchase.
Centennial withdrew its offer to sell the Arcade last July. The Park Service said that was fine -- the new visitor center would work fine without the Arcade property.
That was when the SeaLife Center entered the picture.
UNUSUAL NUDGE
Money left over from the $3.9 million earmarked by Congress to buy land in Seward for the Mary Lowell Center was originally to have gone to the city, which planned to build waterfront pavilions and walkways. But Stevens added an unusual nudge to the project in the December 2004 appropriations bill. The city would get the funds only after it had abandoned a block of downtown Washington Street, cutting between Legends and Old Solly's, so that the new building could be built across the road.
The process of "vacating" a public right of way is usually a matter left to local government, not Congress.
"We were accused of blackmail by the city," said the Park Service's Gilbert. It was an unfair charge, he said -- the congressional stipulation came as a surprise to Park Service negotiators.
Closing off Washington Street was, in fact, the design option preferred by many city officials, including Mayor Vanta Shafer. But they sensed it would be controversial. (And they were right -- see sidebar.)
On a trip to the nation's capital last July, Shafer asked Stevens -- diplomatically, she thought -- to remove the street-vacation language from federal law so they could handle the matter locally. He obliged -- but also, to the surprise of the city, took the money away.
"I guess all I can say is that the appropriation of money for the city of Seward wasn't addressed in that meeting," Shafer said.
Stevens spokeswoman Boone said it was all a misunderstanding. Stevens thought the street had already been vacated by the city and he was providing them the money as compensation for giving up the right of way. When he found out it wasn't vacated yet, she said, he looked elsewhere for a home for the funds, which had to be committed that fiscal year.
"He was very clear to the mayor he was not trying to force the city to do anything," Boone said.
Officials at the Alaska SeaLife Center quickly proclaimed they had not sought the city's $1.6 million for themselves. But they also said now that the money was theirs, priorities for waterfront improvements would be different from the city's -- beginning with the purchase of the Arcade building.
"It would be helpful to us in the long run," said SeaLife Center executive director Tylan Schrock.
The SeaLife Center guarded the price they were paying for the Arcade until the deal closed at the end of March. The $558,000 price turned out to be slightly higher, per square foot of land, than the Park Service paid for properties other than Old Solly's. But because it included the cost of demolition -- $200,000, according to McCabe -- it was a better deal, center officials said.
The Arcade deal was set up with proper attention to appraisals, knowing it could be subject to audit by a federal inspector general, said Stevens, the SeaLife Center's finance director.
The Arcade Building was torn down by Centennial contractors in March. The SeaLife Center agreed to buy a bare lot, said Schrock. Whether the land becomes office space, an open plaza or souvenir shop will be up to the master plan, officials said.
McCabe, in a brief written statement, referred to the removal of the old building as revitalization. "When runners cross the Mount Marathon finish line this year, there will be a place to stretch with an incredible view of the bay. Everyone who visits Seward this year will appreciate the improvement," he said.
TOO MUCH POWER?
To many of Seward's civic leaders, the Alaska SeaLife Center is a shining achievement, an icon of bootstraps economic development and their town's friendship with Stevens. But critics sometimes complain the facility wields too much local power, as when it wound up with the city's waterfront-improvement funding.
The purchase of the Arcade property from McCabe could sharpen the debate about its role in the community.
Since its inception, the marine facility has been touted as a tourist magnet that will help local business, not compete with it. But several center board members say the Arcade property seems a natural not only for offices but for a retail business targeting pedestrians moving between the SeaLife Center and the new Mary Lowell Center.
Center officials say they don't want to be seen as building up retail efforts in a way that would compete with other downtown shops. On the other hand, they say they are looking for new sources of revenue because they expect Stevens' influence on the budget to wane in coming years. They predict their federal funding will decline 25 to 35 percent. (Even as federal research funds decline, the center's need for office space will increase, they say, because more scientific work is being done in-house rather than elsewhere through subcontracts.)
Another innovative SeaLife Center proposal, for two-hour day-boat tours of Resurrection Bay, comes from the same need for new revenue, officials say. The tours, to be provided by an independent contractor from a dock at the center, will provide a new attraction for visitors this summer, officials said. Center staff will serve as on-board interpreters.
"It's part of our windows to the sea," said general manager Darryl Schaefermeyer.
The proposal is controversial. SeaLife Center officials argue that short boat tours won't compete with established full-day tours now operating out of the boat harbor on the other side of town. But when the tidelands lease for the dock came up before the local planning commission last month, tour-boat operators working out of the small boat harbor lined up to speak in opposition to what they called unfair competition from a city-supported nonprofit.
SeaLife Center officials, who refused the city manager's earlier demand for information on its land purchases, accused the city administration of stalling on the dock for reasons of "bureaucracy, rumors, innuendo and petty personalized politics."
The tidelands lease is coming up for final approval Monday before the City Council.
Waiting in the wings is Alaska Northern Outfitters, the company that would provide the boat and dock for the tours. The company did not have to bid on the job. Center officials say the company came to them, answering a need they had talked about for years. As a private business, officials said, the Alaska SeaLife Center does not have to put such a contract out to public bid.
Alaska Northern Outfitters is co-owned by Trevor McCabe.
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Reporter Tom Kizzia can be reached at tkizzia@adn.com or in Homer at 1-907-235-4244.
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