Daily Sitka Sentinel from Sitka, Alaska • Page 1

Member of the Associated Press A I I Sitka Alaska Thursday, December 15,1994 Fire Guts Downtown Petersburg Buildings Volume 56 No. 241 By ROSANNEPAGANO Associated Press Writer ANCHORAGE (AP) An early morning fire traced to a historic hotel's boiler room gutted several Petersburg buildings Thursday, leaving some residents homeless and others out of a job. About 100 volunteer firefighters turned out after sirens blared through the Southeast community around 2:30 a.m. Fire broke out on the same block where a large blaze in June destroyed the Worhatch Building and three other businesses. Crews said Thursday's fire was largely out by mid-morning, although hot spots in the centers of collapsed buildings continued to pose a risk of flare-ups.

Authorities say police officer Rick Carter was treated for smoke inhala- tion and transferred to a Seattle hospital in stable condition. There were no other injuries reported and several second-story apartments were evacuated safely, said Linda Snow, Petersburg city manager. Smoke and flames persisted six hours after fire was first reported in businesses along Nordic Drive, Petersburg's main street Crews doused the blaze continous- ly, causing tap water pressure to drop to a trickle all over town. Petersburg is about 125 miles south of Juneau on Mitkof Island. Gutted in the fire was the turn-of- the century Scandia House, where owners were putting up family guests for a weekend wedding planned at the hotel.

Fire covered nearly a city block, moving south among the tightly Continued on Page 8 Mine Owner Makes Land Deal with F.S. By HEATHER MacLEAN Sentinel Staff Writer The U.S. Forest Service has signed an unprecedented agreement with Kennecott Greens Creek Mining Co. that may speed the reopening of the company's silver mine in Juneau. Kennecott officials have agreed to pay the Forest Service $1 million in exchange for the right to explore 7,500 acres of sub-surface land in the Tongass National Forest Admiralty Island national monument adjacent to the company's existing claims on 350 acres.

Expansion of the mine had been blocked because the national monument area had been withdrawn from mineral exploration and development. The agreement of the company to pay for the right to go into the area, and also to pay a royalty on any minerals thatare mined, isleing hailed as a significant advance in public policy, 19th century law that still governs mining on public lands does not require miners to make lease or royalty payments to the government. The agreement with Greens Creek also calls, for the company to deed its private land holdings on Admiralty to the government at the conclusion of the mining activity. The Greens Creek mine was open from .1988 until 1993 when operations were shut down because of low metal Greens Creek, until that the largest silver-producing mine in North America. It also produced lead, zinc and gold.

would be looking at the same type of mineralized structures on' this property, so they would be looking for the same four products," said Tom Albanesei general manager of the Greens Creek mine. Albanese, along with Assistant Secretary for Environment and Natural Resources at the U.S. Department of Agriculture Jim Lyons, USFS Chatham Area Forest Supervisor Gary Morrison and USFS Alaska Regional Forester Phil Janik were in Washington, D.C., Wednesday to sign the deal in a special ceremony, and granted the Sentinel a telephone interview. Kennecott is currently doing ex- ploritory work at the mine, said Albanese, but has no idea when, or even if, it will reopen. "We are currently undertaking fea- sibility and development activities 6n the existing patented claims at Greens Creek.

We would be focusing immediate start-up potential and feasibility on the existing property position, said Albanese. "However, knowing that we have the additional exploration potential provides the joint venture partners with that longer term perspective and vision, which should make it more attractive to (them) to consider it as a positive investment decision." The company has stepped up operation at the mine since the beginning of the year, he said. He added that he does not know when, or if, the company will begin removing ore from the 7,500 acres. "We believe this property position has future potential," said Albanese. "However, we have to do exploration before we anything with respect to specific potential.

But it is of sufficient potential that we would be willing to undertake this type of exchangeV(with ernment)." Specific terms of the agreement are that Kennecott will pay the USFS a portion of the revenue from the minerals extracted and, when mining is completed, the land the company currently owns will revert back to the USFS. Under the mining law of 1872, mining companies are not required to pay royalties to the government Companies do pay some fees, "but it's a very nominal amount," said Morrison. The deal also disallows any non- mine-related activities on the lands owned by the mining company, which prevents the private land from being used in any manner incompatible with the area. If approved, little work will be done on the surface, and open pits, smelting operations and surface mining will be prohibited, the USFS said in a news release. The $1 million the USFS receives will be used to acquire private inhold- ings located within the Admiralty Island national monument or other conservation units within the Tongass, said Lyons.

"This agreement will be a stabilizing factor for Juneau by creating long-term jobs," said USFS Chief Continued on Page 8 Goldbelt Inc. to Invest in Las Vegas Hotel, Casino ANCHORAGE (AP) A S5.5 million loan to developers of a Las Vegas hotel will give Goldbelt Inc. a firm foothold in the travel industry, Joe Beedle, president and chief executive officer of the firm, said Wednesday. Goldbelt's real estate loan to TPM Financial in Las Vegas for development of the Chaparral Hotel Casino will yield 16 percent interest of $880,000 annually, and Goldbelt, a Juneau-based Native corporation, will own 15 percent of the real estate value of the hotel and casino. Plans are for Sunmakers, a wholesale travel package distributor in Seattle, to purchase the hotel and casino from TPM in 18 months.

At that time, Goldbelt's investment will continue with Sunmakers, Goldbelt officials said. "It gets us into the tourism hospitality industry at a great return," Beedie said. "It educates us on gambling opportunities and it connects us with a wholesale travel agency that can be utilized later in importing traffic to Alaska. "We can direct people to our in- vestments in Alaska, tramways, boat excursions, ecotours and other investments Goldbelt or other Alaska Native Claims Settlement Act corporations might invest in," he said. The 310-room hotel, foreclosured on by the federal Resolution Trust Corp.

in 1991, is now operating under a private contract. The casino, still under construction, is expected to open in late 1995. Goldbek has completed negotiations for shareholder hire with Sun- makers, and options include setting up a wholesale travel club for shareholders, Beedle said. Goldbelt also is in the process of forming a consortium with Kake Tribal Inc. and Klukwan Inc.

for business opportunities related to the Jualin Mine project north of Juneau. That mine is expected to open in late 1996 or early 1997. The three Native corporations hope the consortium can win a number of contracts, with Native preference for training and hiring, Beedle said. Goldbelt, with corporate assets of about S100 million, has 2,800 shareholders. rtS fnr Ck 00 Wednesday, in preparation for distribution 7 p.m.

Saturday at Crescent HaVbor. Santa A nd Christmas ar ade, which starts at 6:30 p.m. at ANB Harbor, to the shelter where he and his volunteer helpers will Holiday Helpers hand out the treats to every Sitka youngster who's there. Local businesses, organizations and individuals donate merchandise or cash to the annual community event. Left to right are Kristy Crews, Theresa Anderson, Robert Baines and Chris Judy.

(Sentinel photo) By SALLY JACOBSEN Associated Press Writer BRUSSELS, Belgium (AP) Defense Secretary William Perry today welcomed a possible Bosnian peace initiative by former President Carter, 1 but he and the NATO chief expressed' skepticism about the mission's potential for success. Bosnian Serb leader Radovan Karadzic proposed a cease-fire and other concessions to persuade Carter to negotiate an end to the 32-month- long conflict that has left 200,000 people dead or missing. "They are actions they can take one day and reverse the next day so we need something more solid than that," Perry told a news conference as he wound up two days of talks with his NATO counterparts. He said the allies would go ahea with plans for their military chiefs to meet Monday and to find ways to strengthen the ability to deter Serb attacks in Bosnia. Earlier, NATO Secretary-General Willy Claes said Karadzic's proposals amounted to no more than a provisional cease-fire plan.

"I do not see any indication of a Tries to Get Carter to Join in Talks peace plan," he told a separate news conference. "This is just an enumeration of some points which can bring is a ceasefire." He said it was up to Carter to give an answer to Karadzic, but added: "I do not see why it "is necessary to ask the former president of the United States to come in order to obtain simply a cease-fire." Karadzic told CNN that he would allow the free transit of U.N. convoys, release all U.N.- personnel whose' movements have been restricted since NATO air strikes on Serb positions last month, and release all Muslim prisoners of war under age 19. He also said he would order a unilateral cease-fire in and around Sara- jevo, reopen the Sarajevo airport for humanitarian flights as winter approaches and guarantee human rights. In reaction, Perry said, "To the extent that Karadzic follows through on that proposal, that will be a positive step.

Past history of offers from Bosnian Serbs have indicated there's some need for skepticism. "The end result," he said, "should be more than just a ceasefire but a negotiated settlement based" on oro- posals drawn up by the United States, Britain, France, Germany and Russia. On Wednesday, the defense chiefs directed their military chiefs, at next week's meeting in the Dutch city of Hague, 16 try to give more muscle peacek'eepersi in Bosnia. Perry said the military chiefs' work could have "some positive benefit" for any discussions that Carter eventually holds with the Bosnian Serbs. In a 'statement, the ministers renewed their support for the U.N.

force to "continue its crucial mission of providing humanitarian assistance and saving human life." But, at the same time, they said military aides were drawing up contingency plans to help evacuate the peacekeepers "should that become unavoidable." During their meeting, the ministers were under pressure to bolster the 24,000 U.N. troops or face an embar- rassing pullout. Allied governments have warned that an evacuation could lead to a widening of the conflict and increased civilian casualties. Perry said the meeting in The Hague would consider; among other things, "a wide variety of possible changes" in the rules of engagement, which now limit the ability of the U.N. troops to fire back when under attack.

Other possibilities cited by diplomats for strengthening the force were redeploying the peacekeepers to more secure positions; extending NATO air cover; and creating a fortified supply corridor from Sarajevo to coastal ports. A tougher stance would need approval of the United Nations, which has opposed aggressive action for fear of Serb retaliation. Yeltsin Gives Chechnya Surrender Deadline Serb Ground Fire Hits U.S. 'Copter in Bosnia By ROBERT H. REID Associated Press Writer SARAJEVO, Bosnia-Herzegovina r) Ground fire hit a helicopter that had been sent today for the commander of U.N.

peacekeepers, whose mission has appeared increasingly untenable in recent weeks. 16 helic te was forced to land, UN. officials said. Lt. Gen.

Sir Michael Rose, the U.N. commander for Bosnia, was not aboard and there were no reports of injuries. There were contradictory reports about whether the helicopter was shot at over Bosnian Serb- or government-held territory. But it emphasized the U.N. forces' vulnerability in the war.

Officials are skeptical about Bosnian Serb leader Radovan Karadzic's offer to end tight restrictions on the United Nations mission and 10 implement a unilateral cease-fire around Sarajevo, the besieged Bosnian capi- tai. Karadzic also invited former President Jimmy Carter to Bosnia to try to restart peace negotiations in a conflict that has left at least 200,000 people dead or missing since April 1992. 'We do not see this as a concession, and we see this only as the minimum necessary to carry out our job said Colum Murphy, a spokesman in Sarajevo. Karadzic's move was seen as an attempt to ensure that the United Nations docs not pull out of Bosnia. If it does, he could face a Bosnian army equipped by Islamic countries or the Umtcd States.

He also knows that U.N. troops inserted after a six-month war in 1991 in neighboring Croatia have in effect served to cement Serb control over one-third of that former Yugoslav republic. Officials said the UN. chief for former Yugoslavia, Yasushi Akashi, warned Karadzic on Wednesday that the United Nations would leave unless it had mimimal conditions to operate. U.N.

peacekeepers were fired on Sunday, killing a Bangladeshi and injuring four others near Bihac, 90 miles from Sarajevo. U.N. officials indicated they did not know about Karadzic's plans to invite Carter into the process. It was unclear if and when Carter would come to Bosnia. Bosnian government spokesman Kemal Muftic said the initiative was an apparent effort by Karadzic to bypass the ongoing peace process by opening up an independent link to to Washington that would, in effect, recognize the independence of his self- proclaimed republic.

Michael Williams, a spokesman at UN. headquarters in Zagreb, said Carter had violated U.N. resolutions by communicating with the Bosnian Serb leadership. Only U.N. officials can have contacts with Bosnian Serb leaders, he said.

Karadzic said he hoped to implement his offer in 24 hours. But Williams said tee were no indications that any of the points Karadzic Proposed would be implemented, adding they "do not represent peace lor Bosnia-Herzegovina." Spokesman Kris Janowski for the U.N.^High Commissioner for Refugee said "'there is not much relaxation as far as UNHCR is concerned." By CHRIS BIRD Associated Press Writer GROZNY, Russia (AP) Russian guns shelled a strategic village and massed their armor just outside the capital of Chechnya today. President Boris Yeltsin gave the separatist region's fighters another 48 hours to disarm or face the consequences. A regional official sympathetic to Chechnya's cause said hundreds of civilians had been killed in four days of fighting. Chechens had shown little evidence of complying with the Kremlin's ultimatum to lay down their arms by today, even as Moscow said Russian soldiers had entered the northern and western outskirts of Grozny and were advancing from the easL Yeltsin, in a written message to the Chechen people, said he was pushing the deadline back to Saturday night at midnight.

In another veiled warning, he said he was "striving to reduce to a minimum the use of force, which unfortunately entails casualties among the civilian population." But Chechen leaders, speaking shortly before Yeltsin's statement, gave no hint they would back down. "We will never give up our weapons," said Yusuf Shamsedin, foreign minister of the self-declared independent republic in the Caucasus Mountains. "We will never let the Russians into Grozny." He spoke in his office in the presidential building, his own Kalashnikov rifle sitting on the windowsill alongside a spare of ammunition. Russian Foreign Minister Andrei Kozyrev, speaking in Murmansk, described Chechnya as "a free criminal and economic zone" where "armed gangs and drug mafia arc stationed, from where arms trade is going on all over the country." Russian news reports said 20 Russian soldiers were being held hostage in Grozny. Russian tanks and other armored vehicles were massing around Tolstoi-Yurt, just north of Grozny.

In the town, grim-faced Chechen fighters dug fresh trenches in anticipation of an all-out assault. On a small collective farm near the capital, Grozny, about 50 women and children spent the night in a makeshift bomb shelter beneath a grain elevator. Dim light flickered from kerosene lamps and candles, and water dripped through the ceiling. "I've been here all night," said 33-year-old Khava Mikayeva, her eyes red with exhaustion. She held the youngest of her seven children in her arms.

"I have no relatives in the mountains. We have no place to go. We have a few loaves of bread, but that's all." On Wednesday, Russian troops shelled the outskirts of Grozny and strafed the city from attack jets. Chechen forces downed a Russian helicopter and reportedly tore apart its two occupants. The Kremlin warned the Chechens to stop fighting or face "all consequences of their criminal recklessness." The exact timing of today's deadline was unclear.

Chechnya, located in the Caucasus Mountains 1,000 miles southeast of Moscow, declared independence in 1991, but Russia has refused to recognize the oil-rich republic's claim. Chechnya's rebel president, Dzhokhar Dudayev, angrily withdrew his delegates on Wednesday from peace talks, which had made little progress since Monday. He urged the 1.2 million residents of his predominantly Muslim republic to ficht to the death. The confrontation is a big political gamble for Russian President Boris Yeltsin, and marks Moscow's largest military endeavor since its 1979 invasion of Afghanistan..