City makes plans to sell 31.5 acres behind Fred Meyer

Builder Hugh Grant to pay $375,000 for parcel

Posted: Tuesday, July 19, 2005

More housing could become available behind Fred Meyer.

The city plans to sell 31.5 acres of land on the hillside above the supermarket to developer Hugh Grant for $375,000. The land, often referred to as tract A of Golden Heights Subdivision, has sewer and water lines.

Back in August of 2003, the city estimated the land was worth $625,000. An independent appraiser reduced the land value because of difficulties developing the site.

"One of the problems of the property is access," City Manager Rod Swope said.

The only reasonable and affordable access to the property is to go through Grant's land nearby, said Assembly member Randy Wanamaker. Grant owns 12 acres of land adjacent to the city land.

The property's poor soil also presented additional challenges, Swope said.

The city had sold the property to IHH Construction in 1996. The company planned to build apartments and condominiums there. But the company was unable to get a reasonable access to the property and failed to complete the payments on the property, said City Lands and Resources Manager Steve Gilbertson in a memo. The city took back the property in January of 2000.

Although another company offered $500,000 for the land, city staff told the developer that he would still need to gain access to the property through Grant's land.

"Obtaining the maximum amount of money for the sale of the property is not our highest priority," Gilbertson said in a memo. "The city has a responsibility to ensure the property is developed in a sound manner consistent with community planning standards. There is no public interest in selling the property if reasonable access cannot be provided."

Because of the access issue, the city decided to sell the land on a negotiated basis with Grant rather than through a competitive bid.

Assembly member Jeff Bush asked staff to make sure selling the property lower than its appraised value is sensible.

"It seems to me that when we buy land, we tend to pay more than it is appraised for. When we sell land, we sell it for less than it is appraised for," Bush said.

Bush suggested adding a condition that would ensure Grant develop the land; if Grant fails to comply, the city can buy the land back at a reasonable price.

Grant said he would consider working with Tlingit-Haida Regional Housing Authority to build affordable housing at the site. He said he will develop the property as soon as he acquires it.

The Assembly will have a public hearing on the sale at its Aug. 8 meeting.

• I-Chun Che can be reached at ichun.che@juneauempire.com.



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