Ky Holland, May 30, 2026

One of the interesting discussions surrounding the gas pipeline economics and need for property tax reduction proposed in the Governor’s HB 2001 and HB 381 bills has been whether local governments or communities should receive or have access to some form of equity participation in exchange for supporting the Alaska LNG project.

Predictably the project developers reject the idea of equity without cash contribution since that creates dilution for the carried interest sponsors and the external capital cash investors. I’d like to suggest they give it more consideration in order to strengthen public engagement, align long-term interests, and build broader Alaska support for the project without directly tying equity ownership to tax abatements themselves.

After years working with startups, angel investors, accelerators, and venture funds, I’ve learned that experienced investors usually require the creation of an employee option pool before early stage major financing rounds closes. Typically 10–20% of a startup’s capitalization is reserved for future employees and key contributors and stakeholders. The pool doesn’t create additional investment capital, but it does dilute founders and investors compared to a structure with no pool at all.

Experienced investors don’t see this as a giveaway or loss – in fact they expect it and require it in risky new ventures to help ensure success, and they want to see it planned for in advance rather than carved out later.

They see it as a risk-reduction and alignment mechanism.

The reasoning is simple: long-term success depends not only on money, but on creating a structure where essential contributors are invested in the project’s future success from the beginning.

That same logic may apply to large infrastructure projects like Alaska LNG.

Host communities, Alaska Native organizations, workforce systems, and regional stakeholders contribute something essential to long-duration projects:

• political stability,
• workforce continuity,
• infrastructure support,
• social license,
• stewardship,
• and long-term operational partnership.

Rather than treating those interests primarily through recurring debates over taxes, PILTs, and mitigation agreements, perhaps Alaska should explore creating a long-term “Community Participation Pool” within the project subsidiaries themselves.

Importantly, this would not require reopening the existing 75%/25% Glenfarne/AGDC ownership structure at the parent 8 Star level. That core cap table is likely fixed for practical financing reasons — and in many ways illustrates why sophisticated participation structures are best designed early rather than renegotiated later.

But the Alaska LNG project already contemplates three separate subsidiary entities for the gas conditioning plant, pipeline system, and LNG export facilities. Those operating entities still offer opportunities for thoughtfully structured community participation interests designed around long-term alignment and shared success.

This would also separate two issues that are often getting tangled together:

• property tax policy, and
• long-term economic participation.

Property tax relief should be evaluated on whether it improves project feasibility, financing stability, and long-term economic outcomes for Alaska. Community participation, meanwhile, could be structured separately as a long-term investment in public support, stewardship, and aligned incentives.

Most importantly, this approach could broaden participation beyond only the directly affected taxing jurisdictions. A well-designed participation pool could potentially include host communities, Alaska Native organizations, workforce development trusts, regional infrastructure funds, and other statewide public benefit mechanisms — allowing all Alaskans to share in long-term project success. Notably, these pools are not fully distributed at the start but are available to the board to authorize with terms through the early phase of venture development. In this case, along the path of feed, fid, construction, and perhaps fully awarded after full operation.

I’m not presenting this as a fully formed proposal. I’m simply trying to translate lessons from startup venture investing into ideas that might strengthen the Alaska LNG project itself and help shape future versions of HB 381 or related policies.

One of the core lessons of venture capital is that aligned incentives matter.

The stronger the long-term alignment between investors, operators, workers, and communities, the greater the likelihood of long-term success.

Ky