My turn: Juneau Assembly should tell Grant Christmas isn't coming early this year

Posted: Wednesday, August 03, 2005

The recent series of articles in the Juneau Empire on housing underscored the need to get cracking on accelerating housing development. Unfortunately, one of the first proposals offered by the city after the recent stories is a financial nightmare.

The proposal to dispose of city land behind the Fred Meyer store is nothing more than an ill-conceived sweetheart deal that will clearly benefit a single developer and may not lead to housing construction. City staff has proposed selling a 31.5 acre parcel to Hugh Grant without allowing anyone else to bid on or buy the property. City staff have decided to give Grant a cushy deal and sell the city property for $375,000, even though another developer offered $500,000 for the land and the property in question was valued at $625,000 in 2003. We should all be so lucky as Mr. Grant and get this kind of treatment from City Hall.

Assembly member Jeff Bush was exactly correct when noted that the city has an unfortunate tendency to pay above the appraised value and sell below the appraised value when it comes to land transactions. If you doubt this phenomenon, take a look at what the city paid for property adjacent to Auke Bay for new boat harbor expansion and you will see the city is apt to buy high and sell low contrary to most rational commercial expectations.

The task before the Assembly is whether it will act on Mr. Bush's trenchant observation. Grant shouldn't be the happy recipient of a city staff policy run amok. In fact, all the Assembly really needs to do is direct staff to put the parcel out for auction and give all developers a shot at procuring what is a very valuable piece of property.

A review of the property and a check of recent property appraisals in Juneau ought to jolt any bureaucrat into questioning a negotiated sale for $375,000. Large commercial properties like the parcel behind Fred Meyer have been sold for various prices ranging from roughly $40,000 an acre to around $50,000 an acre in the last two years. Even using a low-end value of $40,000 an acre for the city property would yield a market value of $1,260,000. Are we as a community really proposing to make a gift to Mr. Grant of almost $900,000 just because he owns a hunk of land adjacent to the city property?

The supposed justification for this sweetheart deal is that access to the city property is difficult and combining Grant's adjoining property to the city land will somehow make the city property easier to develop and miraculously create more housing. I for one am not buying this tale. Look, one cannot but help admire the cheek of a guy like Grant for trying to work the bureaucrats and maneuver the city into a sweet deal for himself. However, as was abundantly made clear by the U.S. Supreme Court recently, the city has a near absolute ability to condemn a sliver of Mr. Grants property to improve access to the city property. Instead of playing paddy cake with Grant in some lousy negotiated deal, the city should seek to acquire a sufficient piece of Grant's property to improve access to the city land and then give any legitimate developer an opportunity to build affordable housing.

If Grant attempts to extort a huge price for crossing his undeveloped land to gain access to the city land the Assembly should direct the Law Department to condemn Grant's land so the community can get on with housing development. What we don't need is an Assembly that makes a gift to Grant based on good intentions and haste. The Assembly should tell Mr. Grant Christmas is not coming early this year and he is not going to receive a big fat negotiated gift just because he owns a parcel of land next door. The Assembly should purchase or condemn enough land based on actual market values to improve the city parcel and then put it out to auction and stop fooling around with special deals that ignore the interest of the public.

• Joe Geldhof is an attorney who lives in Juneau.

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