As part of Dunleavy administration directive, ADF&G considered selling its hatcheries

Apr 23, 2019

Net pens at the state-owned Tutka Bay Lagoon Hatchery, which is operated by Cook Inlet Aquaculture Association.
Credit Aaron Bolton, KBBI News

When Gov. Mike Dunleavy unveiled his budget proposal back in February, he also issued a directive asking departments to seek out state-owned properties that could be sold in an effort to save money.

The Alaska Department of Fish and Game considered selling state-owned hatchery facilities to the aquaculture groups that operate them, but received no interest in the idea.

As part of a larger directive from the Dunleavy administration, Fish and Game considered selling off the 11 salmon hatcheries it leases out to private nonprofit aquaculture groups in the Southcentral and Southeast regions of the state.

“They run them at no cost to the state. It’s on a long-term lease sort of arrangement,” Flip Pryor, Fish and Game’s aquaculture section chief, said.

While hatchery organizations that currently run state-owned facilities are responsible for all maintenance and operating costs, they lease the properties for next to nothing, typically $1 for 50 to 90-year leases.

Pryor said a number of state-owned hatchery facilities also come with significant liabilities, making the idea of owning one uneconomical for hatchery nonprofits.

“In a lot of cases, those hatcheries come with liability for cleanup. They’re on Forest Service land and such that there’s requirements that you have to clean the land up to its previous condition if the hatchery were to go away,” he explained. “The cost to do away with the hatcheries is way more than to continue to have them operate.”

Shutting down a hatchery can cost millions of dollars. Cook Inlet Aquaculture Association runs two state-owned facilities on the Kenai Peninsula. Executive Director Dean Day adds this idea has come up in the past and he said there are more issues than just liabilities.

“From our perspective as an organization, we could not see any benefit of doing that,” he said. “The primary reason was because of the complexity of interagency land management agreements that are currently in place with ADF&G, multiple agencies – for example DNR, and DOT at an number of different locations.”

Fish and Game has received no interest from groups who want to buy state-owned hatcheries and it’s unclear if the department is contemplating selling other properties.

Gov. Dunleavy’s Press Secretary Matt Shuckerow said Fish and Game and other departments are due to submit reports to the governor’s office on June 1, recommending state-owned properties that could be sold.

“So we look forward to receiving that information from departments, looking and exploring specific facilities, maybe areas that are underutilized, explanation for benefits on why the state maybe should no longer be in ownership or should relinquish properties,” he added.

Shuckerow said the administration will craft a report consolidating all the recommendations by mid-summer.

Correction: A previous version of this story incorrectly reported the number of state-owned hatcheries. The state leases 11 facilities to private nonprofit hatchery organizations.