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United States of v. 300 Units of Rentable

February 14, 2012

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
300 UNITS OF RENTABLE HOUSING, LOCATED ON APPROXIMATELY 57.81 ACRES OF EIELSON AIR FORCE BASE, DEFENDANT, AND POLAR STAR ALASKA HOUSING CORPORATION, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the District of Alaska Ralph R. Beistline, Chief District Judge, Presiding D.C. No. 4:06-cv-00023-RRB

Per curiam.

FOR PUBLICATION

OPINION

Argued and Submitted July 29, 2011-Anchorage, Alaska

Before: Betty B. Fletcher, Andrew J. Kleinfeld, and Consuelo M. Callahan, Circuit Judges.

Opinion

OPINION

PER CURIAM:

At the end of a twenty-year lease program in which Polar Star Alaska Housing Corp. ("Polar Star") owned 300 units of family housing located on Eielson Air Force Base, Alaska, and leased them back to the Air Force, Polar Star and the United States could not agree on the purchase price of the houses. They similarly could not agree on the amount of rent payable for an additional year of the lease. The United States first sent notice of a one-year renewal of the lease, then filed a protective eminent domain action to condemn a five-month leasehold in the houses. The district court ruled that the United States' renewal notice was effective, and therefore no taking had occurred. The district court then concluded that Polar Star's request that the court determine the amount of rent due on the renewal term was, in essence, a claim on the contract over which it lacked jurisdiction, and dismissed. Polar Star appeals a number of the district court's rulings. Because each of these rulings was correct, we affirm

BACKGROUND

In 1984, the United States Air Force (at times referred to as "Air Force," "United States," or "Government") solicited bids for a military housing project on Eielson Air Force Base ("Eielson AFB") called the Cool Home Housing Project. In this first-of-its-kind project, the Air Force would permit a developer to build 300 houses on Eielson AFB. The Government would retain ownership of the real property on which the houses would be built, but the developer would own the houses and lease them to the Air Force for a term of 20 years. As part of the project, the Air Force would lease approximately 57.81 acres of land to the winning developer for a period of 23 years. The 23-year period was designed to encompass the 20-year term of the project lease and allow for a three-year period of construction.

Ben Lomond, Inc. ("Lomond") submitted the successful bid, and the Air Force awarded it the contract. The parties executed two leases: a Ground Lease, in which the Government leased the land to Lomond to build the houses, and a Project Lease, in which Lomond leased the houses it built back to the Government. At the end of the Ground Lease, the Government had the option to purchase the houses, renew the lease, or have Lomond remove the houses from the property.

The executed Ground Lease is not simply the draft Ground Lease with the blanks filled in by hand. Rather, the Ground Lease was completely retyped, and several significant changes were made in addition to filling in the blanks for party names and dates (including the addition of several conditions that were not in the draft lease). As provided in the draft lease, the total rent under the Ground Lease was one dollar. The Ground Lease purports to encompass "a term of twenty-three (23) years, beginning 7 January, 1985, and ending 6 January, 2007," which is a span of only 22 years. This discrepancy apparently went unnoticed by the parties until sometime in late 2006, when the Government first asserted its position that the lease expired on 6 January 2008, 23 years after the beginning date, rather than 6 January 2007.

Lomond performed the Project Lease until sometime in 1994, when it became embroiled in a dispute with Fairbanks North Star Borough over property taxes, which resulted in Lomond defaulting on its financing obligations to Aetna Life Insurance Co. The Alaska Supreme Court eventually decided that Lomond's leasehold interest was subject to property tax. Cool Homes, Inc. v. Fairbanks North Star Borough, 860 P.2d 1248 (Alaska 1993). Thereafter, Aetna foreclosed. Polar Star purchased the housing units from Aetna in 1995. During the purchase process, the Air Force issued a Lease Status Report, which repeats the mistake ...


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