Development on the downtown waterfront is a high-cost endeavor.
City officials are currently working with a private company that’s looking to develop a waterfront area next to the downtown library, with the hope that this project can improve the area with a relatively low cost to the city. Developing that lot takes some cooperation with the City and Borough of Juneau, which owns a portion of the land.
The property — commonly referred to as the Archipelago Lot — is mostly owned by Archipelago Properties LLC, which is a subsidiary of Morris Communications (the former owner of the Empire). The CBJ Docks and Harbors department owns other parts of the property.
The project has been in the works for more than a year, and the vision for the development is to put shops, parking for vans and buses, open decked space and a paved plaza on the land. Morris Real Estate Director Allen Grinalds said in an interview Monday that the hope is to have the development ready to go for the summer of 2021.
Grinalds also said he hopes this development can be a “win-win” for the company and for the city.
“We could do it separately but it’s much more powerful by working together,” Grinalds said. “It’s just working in close consultation and collaboration so we’re aware of desires of the city and city is aware of what our desires are.”
These facilities can further accommodate the city’s rising number of cruise ship passengers, Grinalds pointed out, and it will raise the property value as the city collects taxes. According to the CBJ website, the property is currently worth just shy of $7.2 million. Estimates of Morris’ costs have varied, but CBJ Finance Director Bob Bartholomew said the value of the development will be added to the value of the land and the city will get an increased amount of tax revenue from the developed property.
In an interview Monday, Bartholomew said this increase in tax revenue isn’t a huge factor in why the city’s interested. Developing waterfront property fits into the city’s economic development plan, he said, and this results in a valuable piece of downtown property being developed with a relatively low cost to the city (more about the price at the end of the article).
The CBJ portion of the development will include putting a deck over a portion of the lot. Much of the lot is tideland or water, and Bartholomew said the majority of the project is putting a deck over the water so the whole lot can be used. Another portion of the CBJ’s project will be a parking lot and equipment staging area for construction equipment.
The second phase of the project includes the construction of a covered structure, as discussed at the Nov. 19 Committee of the Whole meeting, and the final plans for the usage of that structure have not been decided yet. Multiple Assembly members expressed the hope that this structure can have a year-round use.
Assembly member Loren Jones said he’s still not sold on the project as a whole, and hopes the development can offer more to people in the offseason.
“My fear, looking at that end of South Franklin, is that this will just be another dark hole in the wintertime and that it won’t bring in revenues because it won’t be year-round,” Jones said.
Grinalds said the project is geared toward cruise passengers but he’s open to hearing as much as possible from people in Juneau to get their feedback.
“We want to make sure that what we do is in the interest of the city, because if not, frankly, we don’t want to do it,” Grinalds said. “That’s not really to our long-term benefit either.”
How CBJ will pay
In total, Bartholomew estimated that this project will cost the city about $23.5 million. Almost all of that is going to be taken from marine passenger fees, Bartholomew said. This money is from cruise passengers paying a small tax, which goes to cities that can then use it to maintain and improve their docks and infrastructure.
Other funding sources, as detailed in a memo at this Monday’s Assembly meeting, include Docks and Harbors savings. Bartholomew said about $11 million of the funding could approved at the Dec. 17 Assembly meeting. That meeting also offers a chance for members of the public to weigh in.
Also at that Dec. 17 meeting, Bartholomew said, the city will shift about $6 million of money already committed to other projects in order to fund this one.
The city might draw from sales tax revenue to pay for part of the second phase, Bartholomew said. It depends on how the design of the project plays out. If the CBJ property ends up having more of a year-round use, the city might use sales tax money to put in improvements that would serve residents in the offseason, Bartholomew explained.
As a result of the patchwork ownership of the lot, the city will have to sell some of its land and buy other parts of the lot to make this arrangement work best, Docks and Harbors Port Engineer Gary Gillette explained at the Nov. 19 Committee of the Whole meeting. That’s currently being negotiated, he said.
Grinalds said working with the city has been going well. He said they’ve been talking with vendors, too, trying to get a mix of local businesses and outside businesses. It’s still too early to start talking about leases, Grinalds said, but he pointed out that having good tenants is much more vital than the physical structure.
“As you look at the development, really that’s less than half of it,” Grinalds said. “What’s really important is making sure you have the right tenant mix.”
• Contact reporter Alex McCarthy at 523-2271 or amccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.
This artistic rendering of the proposed Archipelago Properties, LLC development is seen in a 2017 document posted by the City and Borough of Juneau. (Courtesy Photo | City and Borough of Juneau)
