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.
Comments (30)
Add commentThat's a shame
Wonder what the Gross guys plan to do with the property?
Should have taken the money
Should have taken the money and ran. Anyone wanting to buy your old run down smelly sticky theater should be welcomed.
another case
of greedy landlords and owners wanting way too much money.
Someone needs to push that first domino
It is a problem for the community when an building owner overvalues their property , but have the financial resources to sit and wait for what they believe will be a better deal in the future. The location is amazing, but the building is in pretty poor shape.
The talk of affordable and new housing is not new, but someone needs to get of the fence and make a deal for it to happen. Let's say for instance, this deal went through, the space got the rehab, and the new apartments all rent out. That's an increase in the total number of fresh faces who live downtown to drive money to local business there. That, in turn, can spur growth and hopefully drive new businesses into vacant spaces.
I'm hopeful for this type of revitalization downtown, but it takes those holding the cards to make some deals and see the benefit of that kind of new growth.
I have cautious optimism that this type of thing can happen in a 5 - 7 year period. As a family man in my 30s, I think it benefits us all to think with the next generation in mind.
I really does not matter
What the owners of the Gross Alaska building do with it. It belongs to them and that is the beauty of private ownership. You get to do or not do with your property as you see fit.
Yeah, that place makes some
Yeah, that place makes some serious bank. They don't need to sink money in when it will only come out of their pockets and not help business. Personally I love changing things up from time to time but why would they make it a big fancy one movie theater when they can offer two different movies and. make more money?
If the city wants to change the look of downtown they need to make it worth it to the private owners. How about removing the 5-30 drunks that are giving our city a great reputation with the tourists. That little park smack in the middle of downtown is always a shock to the tourists walking by. At least they get some entertainment of bum fights and rainforest recovery that they and we all enjoy.
@ AH HA, not quite,but...
It would matter, say, if the owners of the building wanted to store nuclear waste there or run a brothel, but that is beside the point.
I think Audio27 is right on the money. There seems to be an abundance of property in the downtown area with lots of potential that just sits there deteriorating (or vacant and rotting away like 4th & Franklin). There are entrepreneurs out there willing to take the risk to revitalize these properties, but the current owners overvalue their property at what seems to be about 50 to 75 percent. The City Market building, 114 Franklin, and the Fosby building are recent examples to go along with this story. The owners of these properties seem completely detached from reality. The entrepreneur’s only choice at that point is to get up and walk away. You can’t make a rehab/remodel work at the prices the owners are asking. If someone thinks their property is worth almost twice as much as it actually is, where do you even start? It doesn’t seem to matter to the owners, they’ve got their money already. The rest of us are left to watch downtown crumble into obscurity.
I didn't see any figures in
I didn't see any figures in this story - assessed value, offer from the Land Trust or asking price from the building's owners. It's presumptuous to assume the owners are the bad guys...
Soooo, we get a one sided story from a "loose group" of non profit globalists that come begging with all kinds of promised (or maybe not) government funding and no doubt kumbaya stories of their grand plans.
Is this really the kind of housing that should be encouraged in town? I can hear the giant sucking sound now and it's only going to cost the taxpayers and who knows whom else $14 million to make the dream come true! But, it'll be a win-win, they promise!!
Here's a tutorial on what's up with this "loose group" -
"The Juneau Housing Trust represents a new approach to creating affordable housing for low-income Juneau homebuyers. Called a community land trust, this model of housing is growing in popularity around the nation, in areas like Juneau with high land costs. Affordable Home Ownership: Under a community land trust, the land is owned by a non-profit trust, while the house is sold to qualified low-income homebuyers. In Juneau, the typical price of a single-family lot is $65,000, with often the same amount needed to develop the site for construction. This extraordinarily high cost of land is putting home ownership out of reach of many Juneau residents. Taking the land out of the equation makes houses affordable. A Permanent Pool of Affordable Homes: The Juneau Housing Trust sets the resale price of any home in the community land trust, ensuring its affordability for each successive home buyer. Under its resale formula, the homeowner, when the home is sold, receives all the money he or she uses to pay off the home mortgage, plus 25% of the appreciated value of the home. Put another way, the seller receives 25% of the difference in appreciation of the home."
I bet if I researched a little further this is some fancy scheme cooked up by the United Nations to take private land ownership out of the hands of the citizenry.
Anyone wanna bet?
Yes because the current "I
Yes because the current "I got mine, f$&@ you" mentality is so honest and working wonderfully calypso. Wait, it's working perfectly the way it's designed, to ensure you can't afford housing unless you make $20k above the city average income and have two sources.
It's interesting whenever anyone is trying to help other people out you automatically assume its bad. Backasswards comes to mind.
I'd actually love to live right downtown if the places ever opened up or if they weren't $1400 for a one bedroom.
Geez stu - settle down.
Geez stu - settle down. Usually a housing market will adjust to what it can bear. If no one rents at this price, then the rents come down. If there's 0% vacancy then the market must be working.
Now if there's so called "no affordable" rentals that's another problem all together. I'm just guessing, but to me, it sounds like there might be too much "social engineering" going on in town. You know, too many takers. Americans aren't really supposed to be encouraged to make a living on unemployment checks and food stamps and sectioin 8 vouchers.
A town starts fostering this type of entitlement mentality and this is what you get - homelessness, drop outs, and on and on.
How 'bout this, a person can't find a job in a particular town, they move? It's a giant country and some places really are just too expensive for certain "workers" to live.
Ok, fire away with all the boo-hoo stories.
I'm sorry but this country is going down the tubes and this is the mentality that the common sense, free enterprise, liberty loving people like myself are up against. We're not going down with y'all progressives, just yet anyway. We're in this for the fight.
I don't remember calling anyone a "bad guy"
I certainly said overvaluing a property is a problem for those hoping to get into an area to help with revitalization. Does someone choosing not to sell make them a "bad guy". Absolutely not. However, at some point the stagnation of property in an area will force the owner to take a hard look at the asset. Someone may believe a property is worth 50% (random number) above market in their mind, but that has no monetary value unless that appraisal is realized at closing.
Calypso - I'm not pro or con any one group in this article, but I am a proponent of capital improvement in a free-market system. As such, overvaluing your asset is a detriment not only to the owners if it can never be realized, but a detriment to the community the property is owned in. And - you can't simply dismiss the community, because as a business owner you are part of it and rely on its cash flow to sustain your investment.
No United Nations secret agenda, no handouts or tax increases - just simple economics in an area with aging infrastructure.
Yes but, audio, a free market
Yes but, audio, a free market will ebb and flow, dependent on personal decisions made by private owners. Why should an owner be forced to sell? That's what makes eminent domain so tyrannical.
You say, " I am a proponent of capital improvement in a free-market system." But whose capital? Perhaps the private owners of this building don't agree with the goofy land trust scheme. Personally, I hope that is the case.
The owners of this old theater are free to do with their property what they choose. If you don't like the looks or vibrancy of the downtown, work through the assembly to change zoning or whatever. What about condeming property? Atleast then the laws will be on the books and decided on by the residents of the town and the elected officials that have been put into power by the citizenry.
Be careful what you propose just because YOU like it. Laws and rules have meaning and somewhere down the road you may not agree with a proposal.
Again - never advocated "forcing"
Calypso - I never brought up eminent domain, and neither did the article. I also never said they should be forced to sell. I said they would be forced (as in by monetary pressures on their own wallet) to take a hard look at their asset in a declining market.
I see that you also have personal feelings about the "goofy land-trust scheme", but I certainly don't rail you for those opinions.
I proposed nothing more than SOMETHING happening with our downtown area. I live here, like you, and I simply would enjoy some vibrancy in the community. I don't think advocating for it is so terrible. Don't worry Calypso - I won't vote for anything that takes money out of your wallet. Jeeze.
audio - so now that you've
audio - so now that you've backtracked everything I thought you said, what do you really think? Just bunches of hope?
I was making a correlation between looking down on a private property owner for not selling at a reduced price just because you like the proposal and eminent domain. It's kind of the same.
You don't have to get snarky about 'taking anything out of my wallet' either. Can you honestly say that not enough taxpayer money is swirling around this town already?
Calypso...
Some days it seems like you and I are the only two Empire readers that are not either avowed communists or closeted socialists....
@ah ha - it's kind of lonely,
@ah ha - Don't give up. We can beat them - there are more of us than them.
The few daily newspapers that are still in print aren't really the best bellweather for how the country thinks.
Don't lose hope...
I think the building would be
I think the building would be a great place to set up a gambling casino/whorehouse. Think of all the tourist money that would siphon off. While Harriet buys t-shirts for the grandkids, Elmer could kill time with a quick romp.
@johnnyrebel
What have you donated to Juneau? Why should the Gross family be labeled "takers" because they built a bigger business than someone else? What a rude comment you made.
Supporting Community
Owners of the Gross building and all other commercial properties in Juneau provide more for this community than most in the form of higher property taxes as well as through sales taxes generated through rents or other business transactions taking place due to usage of the property. Even if Gross building stays vacant for a number of years, the property taxes will continue to be collected at the assessed value.
Calypso - you are inventing things for your arguement
Calypso - I didn't backtrack. I said I wasn't going to let you put words in my mouth. Then, you say that me correcting you is me backtracking. Wow - nice spin, pal.
Ah-Ha - My comments have been pretty centrist, and pro-development. Calling me a communist or a socialist kind of shows that you have no idea what the definitions of those terms are. However, if you intend to charge up a base of people who respond to essentially, name-calling, then I'm sure you are accomplishing something with that crowd.
Of course, if you can show how my comments have been socialist or communist in any way - I'd love for you to prove it.
Oh - never mind - you'd rather people just believe what you say. You should work for the media.
For the record
I encourage and appreciate intelligent debate. I may disagree with your comments sometimes, but I will still "Thumbs up" a well thought argument. If you can't see past your desire to quickly label someone a communist or socialist if they disagree with you, then I probably won't make headway in trying to have a conversation about community improvement.
I don't like more taxes any more than the next guy, and I vote against them more often than not. So, again, not sure where you can unilaterally throw me into your us or them box.
Audio27;
"It is a problem for the community when an building owner overvalues their property, but have the financial resources to sit and wait for what they believe will be a better deal in the future."
Your statement above appears to fit nicely with the description of the socialist views about private property shown below.
In general, socialists view private property relations as limiting the potential of productive forces in the economy. They believe private property becomes obsolete when it concentrates into centralized, socialized institutions based on private appropriation of revenue until the role of the capitalist becomes redundant. With largely reduced capital accumulation from the original class of owners, private property in the means of production is to be replaced with a free association based on public or common ownership of socialized assets.
@ ah ha
Bottom line: The owners didn't like what they had been offered. So they didn't take the deal.
It has nothing to do with their preferred form of government. It was a business deal.
AH HA, you should state your source materials if you're going to be quoting stuff.
-austino
Ah-Ha
That is an interesting take on socialism as it relates to property, but it is not grounded in fact. Your leading statement in that posts starts with
"In general, socialists view..."
How can you generalize how a group of people view something specific like property and then tie it to the definition of socialism? You can't. So, the statement you made is an assumption of how a group likely views property based on your understanding of socialism. Since you first need an assumption to say that my statement about overvaluation of property is socialism - that is really a stretch.
I said that property overvaluation is a problem because it can lead to stagnation. However, I never stated or implied the owner should give away the farm to benefit the greater good. I said the owner at one point will likely need to take a hard look at market value or potentially face devaluation. It's system risk in capitalism, and not a socialism concept in the least.
As someone with cash, who wants to spend it, I'd love to have more options to do things downtown. That "desire" is personal, but again can't be tied to a political ideology as it is simply a wish for community improvement in a town I live in. I don't want to pay more taxes for it, and I don't want the government to force it to happen.
If I'm still a socialist in your eyes, then I will assume there is no middle ground in how you view someone's social and political outlook. I respect your and Calypso's views as individuals, and I would ask that you extend me the same courtesy before throwing a label on my life. Thank you.
Audio27........
Liking you more and more. Welcome to crazy town. :)
Swimmer - thanks for the kudos
In even my most pragmatic posts I get thumbs down, so I can't do much about tunnel vision. For instance, I just gave a kudos and good luck to a new candidate for assembly who commented on the boards. I don't know if I will vote for him or not yet, but I did post a courteous welcome. Did I get a thumbs down? Yes. Maybe some people don't like courtesy and respect? Hmmmm.
Audio - pretty sure
There are a few (I wonder whom?) who will thumbs down anything you post, just because it's you (and since you're a commie socialist liberal elite, if you say "It's a beautiful day" you're clearly trying to undermine freedom and bring down America.....)
:)
Have a great day.
No, really. :-)
A thought on the comments
Sometimes I wonder, is that man picking out apples in Fred Meyer who is scowling at the prices...Calypso?
Is Swimmergirl on the softball team I played last week?
Who are we all?
I'm curious but I also think it is nice to NOT know. What if my neighbor turned out to be NewLife? I'd have to rethink my habit of taking his recycle can up to his garage door once I knew it was him.
I don't think audio is a socialist.
And I bet calypso isn't as demeaning at home with his family as he is with other bloggers.
This is like free therapy venting.
anononimity is nice
But a few people seem to revel in it. I have seen those who claim they cannot speak there mind without professional consequences, but only use this forum to degrade and condescend others.