When contractors dug into the ground to build the road to what will become the new Pederson Hill subdivision, they found an unwelcome surprise.

The ground was unsuitable for building a road, City and Borough of Juneau Project Manager Paul Beck said. CBJ Lands Manager Greg Chaney said the soil was full of peat, clay and silt that doesn’t make for a good foundation. Beck said the contractors, Coogan Construction, had to dig out the soil and put rock in its place to stabilize the foundation.

“Once that got worked out, we were behind the original schedule,” Chaney said. “That’s why we probably won’t have lots available until next spring.”

Beck said the hope was to finish phase one — which includes the road from Glacier Highway to where the subdivision will be, as well as utility access — by the end of this summer. Now, Beck said, construction of this phase will likely finish by June 1, 2019.

This phase also includes the construction of 17 lots, Chaney said, and those will likely not be available until next spring. The CBJ Assembly sets the dates for when the lots go out for bid, Chaney said, and will be doing that in the coming months.

Chaney assured that, unless the Assembly decides to manually raise the prices, the lots will be sold at a fair market value. This will happen despite the fact that the cost of construction has gone up with the delayed construction.

Coogan’s winning bid for the project was $2.56 million, according to meeting materials from a November 2017 Assembly meeting. Now, Beck said, the expected cost of this phase will be more than $3 million.

Chaney said the city’s original estimate for the project was more than what Coogan bid, so city employees were happy to see the bid come in at $2.56 million. Now, they’re back to around the original estimate, Chaney said.

Beck said there have been no negative environmental effects since the project began.

The plan for the subdivision includes 86 single-family housing units near Auke Lake. The overall cost of the subdivision, including design work from DOWL Engineering, is estimated at just shy of $9 million, according to previous city meetings.

City officials view it as an important project that could help address the lack of housing in town. Public reception to the Pederson Hill project has been mixed. Critics have noted that with such an expensive project, the city would have to make the lots fairly expensive to recoup its construction costs. Chaney said the city’s code requires them to sell the lots at fair market value.

Chaney said there was also some negative response this spring when the construction started because Coogan had to cut down trees in the area and burn them. The smoke, Chaney said, hung in the air in the residential area and many neighbors complained. As a result, he said, Coogan shipped the trees away before burning them.

Through the project, an unlikely partnership has developed. The original plan was to start construction at Glacier Highway and work uphill, Chaney said, but due to the unsuitable soil near the highway, construction began farther up the hill. The trucks needed an access point to the uphill portion, Chaney said, and Christ Lutheran Church was willing to help out.

“They’re the unsung heroes of this project,” Chaney said of Christ Lutheran Church.

The city is using the church’s upper parking lot, Pastor Cale Mead said Tuesday, and it hasn’t been overly disruptive. Mead said the church and city agreed that construction in that spot wouldn’t happen on Sundays, which Mead said he appreciated.

Mead said the city paid the church about $30,000 to use the parking lot, and contractors have done little projects for the church as well. Chaney and Mead agreed that while the traffic and noise might be a little inconvenient in the short-term, this project should work out well for the church down the road.

“It’s hard for a church to argue with new homes being built basically in our backyard,” Mead said.

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• Contact reporter Alex McCarthy at 523-2271 or amccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.

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