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Downtown revitalization suffers setback

Talks end amicably; proposed theater site remodel won't happen

Posted: July 23, 2012 - 3:39am
A sale of the Gross 20th Century Building reportedly fell through last week. The building houses a number of unused apartments. The building is located between the Viking Lounge and the First National Bank buildings on Front Street.  Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
A sale of the Gross 20th Century Building reportedly fell through last week. The building houses a number of unused apartments. The building is located between the Viking Lounge and the First National Bank buildings on Front Street.

The Juneau Housing Trust and the owners of the Gross 20th Century Theater failed to reach an agreement to renovate the decades-old building to provide affordable housing and performing arts theater in downtown Juneau.

The project would have offered 22 housing units downtown, including affordable units and one-, two- and three-bedroom units. The trust also planned to remodel the art deco theater on the building’s first floor into a performing arts theater. Perseverance Theater had expressed interest in using that newly-remodeled space.

Bob Banghart, chief curator at the Alaska State Museum, has worked on the project for nearly eight years.

Eight years ago, Banghart said, the owners of the Gross Theater put their building up for sale. A loose group formed under the umbrella of the Juneau Housing Trust to purchase and remodel the aging building. Currently the Theater building’s upper floors, excluding the penthouse offices, are not used and many of the art deco features of the theater are hidden by curtains and drop ceiling. The finished performing arts theater would have opened up the upstairs theater and returned it to its original use as a balcony to the main theater.

The remodel project was expected to cost between $14 million and $20 million and take two to three years to complete.

The Housing Trust group spent three years on the project before a spike in commodity prices and construction costs in the mid 2000s ”priced (the project) out of the economic model at that point,” Banghart said.

“It sort of idled for a little bit,” Banghart said. But over time the market changed and the group rethought the remodel.

“We came back after it,” Banghart said.

Deal falls through, but no animosity

The Housing Trust won a grant appropriation from the Alaska Legislature and worked a cost reduction in the cost of the renovation. A new grant writer gave the group a “new focus,” Banghart said, and Perseverance Theater partnered with the group on the live downtown theater space.

The project was set to receive other funding as well.

“We were standing to be the recipient of an art place grant,” Banghart said. “We were looking good for that.”

All this work was to “invigorate the project with funding,” Banghart said.

The Housing Trust worked with the theater building owners to find an assessment on the building. The Trust made an offer and a deal seemed forthcoming, Banghart said. But the Gross owners came back with a price that was “way off the mat,” Banghart said.

“We walked away from the table,” Banghart said.

It was a private business deal, Banghart said, and like any business deal has the potential to do, this deal fell through.

“The owners were very cordial with us,” Banghart said. “It was never adversarial, it was a business deal that didn’t fly — it didn’t meet their needs and didn’t meet our needs.”

Banghart said the failed deal cost the project its grants and its partnership with Perseverance Theater.

“The boat left without us,” Banghart said. “It was very disappointing, very, very disappointing. It would have been an absolutely killer thing.”

The building is owned by W.D. Gross II, Dorain Gross, W.D. Gross III, Michelle Wells, Dorian Morris and Darleen Shutz. Kenny Solomon is vice president of operations for Gross Alaska Inc. Gross Alaska Inc. is in good standing with the State of Alaska. The corporation was created in 1958.

The building’s owners could not be reached for comment.

The 20th Century opened in 1940, according to the website Cinema Treasures (goo.gl/s7aRJ). The balcony was converted to a second theater in the 1980s, the site said. The auditoriums were remodeled in 2004.

More housing needed

“This town needs housing downtown,” Banghart said. “It takes people to create a dynamic and if there are no people…”

Kim Wold, a commercial real estate appraiser who specializes in Southeast Alaska properties, said downtown Juneau needs more than one substantial housing project.

“It needs to meet a critical mass,” Wold said. Enough people to create its own market, he said.

Currently downtown Juneau is home to many short-term occupants — including summer workers, legislators and their staff during the legislative session, Wold said. This constant turnover, rental occupancies as opposed to ownership occupancy, may have a negative affect on people’s perception of the area.

“You may not know your neighbor because they move,” Wold said. Downtown Juneau “needs to become a more safe and secure environment. The more you have a middle class occupancy it breeds a comfort and security level that will encourage additional housing and development — overall market perception is critical to its revitalization.”

Banghart said he is no longer working on the theater and housing project.

“I’ve reached my level of engagement here,” Banghart said. He said he has moved his efforts to the State Library and Museum project.

He said his hope is that another person or group comes along and picks up the project again.

“It has to happen, we are throttling our own opportunities,” Banghart said.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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