Yakutat tribal leader fears loss of land as bank sues Southeast Alaska village corporation for $13.3 million

A Washington state-based bank has sued the Alaska Native corporation based in the Southeast village of Yakutat over what it says is $13.3 million in unpaid loans — sparking fears in the community about the loss of Indigenous lands.

Yak-Tat Kwaan received some 36 square miles of land near Yakutat through the 1971 Alaska Native Claims Settlement Act. 

In the past three years, Yak-Tat Kwaan has borrowed millions of dollars from Spokane-based AgWest Farm Credit Services to launch a logging business on the properties it owns near the Southeast village, which has become a summer tourist destination. 

The timber harvest caused a backlash from shareholders and regional Indigenous leaders as Yak-Tat Kwaan began logging near a salmon stream that’s the namesake of a local Tlingit clan, the Kwaashk’iḵwáan — an area that many Yakutat residents see as a sacred site.

Amid local opposition to additional proposed harvests, Yak-Tat Kwaan’s timber subsidiary has not made any payments under its loans since mid-2022, AgWest said in its six-page legal complaint, filed March 31 in U.S. District Court in Seattle. The subsidiary also has failed to meet its “financial reporting covenants,” said AgWest, which is suing for repayment, interest and attorneys’ fees.

Reached Friday by phone, Shari Jensen, Yak-Tat Kwaan’s chief executive, declined to comment, saying the corporation has not yet been served with the complaint. In a prepared statement subsequently posted to social media, the corporation said its board is “united in every possible effort to address the allegations.”

Yak-Tat Kwaan’s subsidiary pledged logging equipment and timber rights as collateral for its loans; corporate leaders have said they did not pledge the land itself. But the lawsuit still creates “huge concern” about the potential loss of tribal land, said Andrew Gildersleeve, the chief executive for the Yakutat Tlingit Tribe, which has publicly objected to Yak-Tat Kwaan’s timber harvest.

In the past, Gildersleeve said, Yak-Tat Kwaan has expressed interest in selling some of its land to generate income.

“Is the collateral under the agreement enough to satisfy the debt? And if it isn’t, what else will the bank take from an underserved, Indigenous population that already has all kinds of environmental and economic threats?” Gildersleeve said in a phone interview Friday.

Asked about those concerns, a Seattle-based attorney for AgWest, John Rizzardi, said the bank declined to comment.

Rizzardi also declined to answer a question about why AgWest agreed to finance Yak-Tat Kwaan’s timber efforts even as the logging industry has been on a long decline in Southeast Alaska. Sealaska, the big Alaska Native regional corporation based in Juneau, announced it was exiting the timber business in 2021.

Yak-Tat Kwaan’s local critics have questioned why the corporation didn’t pursue the sale of carbon credits — an arrangement where polluters pay timber owners to leave trees standing. Corporation leaders have said that revenue from carbon credits revenues would have arrived too slowly, and that such deals wouldn’t have created local jobs like those that come with timber harvests.

AgWest has filed a second lawsuit, in federal court in Anchorage, asking a judge for help in “ascertaining the status of and arresting” a tug and barge that Yak-Tat Kwaan’s subsidiary bought as part of its logging operation and, the bank alleges, pledged as collateral “for loans that are in default.” The tug and barge, the bank said in its legal filing Friday, are believed to be “uninsured and therefore at risk of loss.” An official from Yak-Tat Kwaan said the corporation has not yet seen the bank’s new lawsuit.

This article was originally published in Northern Journal, a newsletter from journalist Nathaniel Herz. Subscribe at this link.

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