What’s the catch? Assembly raises concerns over waterfront development project

What’s the catch? Assembly raises concerns over waterfront development project

City wants to develop waterfront area for cruise passengers

It’s a deal with a catch.

City and Borough of Juneau Assembly members voiced concerns about a $922,175 development deal in the works on a piece of land near the downtown library. Private company Archipelago Properties LLC, a subsidiary of Morris Communications (a former owner of the Empire), owns most of the lot, known now as the Archipelago lot, and CBJ Docks and Harbors owns the other portion.

A term in the deal, which most Assembly members on Monday said worried them, essentially acts like a non-compete clause. As a part of the proposed deal, Archipelago Properties LLC would have the right to object to improvements placed on a specific portion of the lot which may “impair, interfere or unfairly compete with businesses taking place on its adjacent upland property,” according to the draft appraisal report, conducted by Horan & Company based in Sitka.

In return for this ability to influence, the city would pay $194,625 less for the land, according to the value of the right to object clause listed in the appraisal report.

[City looks for bargain with downtown waterfront development]

The vague terms of the clause “impair, interfere or unfairly compete” concerned members of the Assembly who stated this wasn’t specific enough to determine what would and wouldn’t be allowed in the future.

Assembly member Jesse Kiehl said he was worried that CBJ might be sued if they held any events that could be considered competition.

“Generally I would prefer not to buy or create property that may be subject to discussion at a further date,” Kiehl said.

“It might be worth $200,000 to not have that impairment,” Deputy Mayor Maria Gladziszewski added.

City Manager Rorie Watt said the Assembly can propose to strike the clause from the ordinance, but then the cost of the property would go up, since the current draft calls for buying the portion of the property subject to the clause at a rate 50 percent lower than the full value. He further defended the plan, which has been in the works for more than a year, saying that by keeping in the clause, the city would be saving a good deal of money.

“It makes perfect sense from a property line standpoint,” Watt said. “Once you change those property lines for both parties, it lets development happen more economically for both parties.”

There are always limitations on property, Watt said, but “this one is just more peculiar and specific.” He also said at the meeting he thought it would be unlikely that there would be a proposed competitor.

Municipal Attorney Robert Palmer said there are not many other properties that CBJ owns that have any similar restrictions about how to use them. That alarmed Assembly member Carole Triem.

“I have a couple of worries about it,” said Triem. “One is that it could set a precedent when CBJ enters into land purchases with other parties. I’m also worried that it will bind future Assemblies and what they’re able to decide what to do with that piece of land.”

Assembly member Michelle Hale also wanted to the language of the clause to include how the right to object clause would work out if they property owners were to object to a future decision. For instance, if the Archipalego property owners did object to something, what would the process be for the city and landowners to agree on what could or couldn’t happen? Another worry was that future owners of the property might not be so willing to work with the city, and use the clause to their advantage.

Morris Real Estate did not immediately respond for comment Tuesday.

Palmer said that more specific language would be drafted in the next meeting with the property owners and then it will be presented in an ordinance before the next Assembly meeting. Mary Becker, Assembly member, motioned that an ordinance be sent to the Assembly. Loren Jones, Assembly member, objected the motion and was the only no vote subsequently, meaning the ordinance will be drafted and sent before the Assembly.

Jones doesn’t think the almost-million dollar deal is worth it — with or without the clause.

“I think that this process isn’t needed,” Jones said. “I don’t think the city needs the parking, I don’t think we need the boardwalk. I don’t think the million dollars to realign the properties to move forward is useful, and I don’t intend to support [it] moving forward. It just doesn’t make economic sense to me at this point.”


• Contact reporter Mollie Barnes at 523-2228 or mbarnes@juneauempire.com.


More in News

Jasmine Chavez, a crew member aboard the Quantum of the Seas cruise ship, waves to her family during a cell phone conversation after disembarking from the ship at Marine Park on May 10. (Mark Sabbatini / Juneau Empire file photo)
Ships in port for the week of May 18

Here’s what to expect this week.

Juneau high school seniors Edward Hu of Juneau-Douglas High School: Yadaa.at Kalé (left), Elizabeth Djajalie of Thunder Mountain High School (center) and Kenyon Jordan of Yaaḵoosgé Daakahídi Alternative High School. (Photos of Hu and Jordan by Juneau Empire staff, photo of Djajalie by Victor Djajalie)
Senior Spotlight 2024: Three top students take very different paths to graduation stage

Ceremonies for Juneau’s three high schools take place Sunday.

The entrance road to Bartlett Regional Hospital. (Peter Segall / Juneau Empire file photo)
Bartlett Regional Hospital looking at eliminating or trimming six ‘non-core’ programs to stabilize finances

Rainforest Recovery Center, autism therapy, crisis stabilization, hospice among programs targeted.

A king salmon. (Ryan Hagerty/U.S. Fish and Wildlife Service)
Biden administration advances bid to list Gulf of Alaska king salmon as endangered or threatened

Experts say request could restrict activity affecting river habitats such as road, home construction

Mayor Beth Weldon (left), Deputy Mayor Michelle Bonnet Hale and Juneau Assembly member Paul Kelly discussion proposals for next year’s mill rate during an Assembly Finance Committee meeting on Wednesday night. (Mark Sabbatini / Juneau Empire)
Assembly members support lower 10.04 mill rate ahead of final vote on next year’s CBJ budget

Initial proposal called for raising current rate of 10.16 mills to 10.32 mills.

Dave Scanlan, general manager of Eaglecrest Ski Area, speaks to the City and Borough of Juneau Assembly Finance Committee on April 13, 2023. (Clarise Larson / Juneau Empire file photo)
Dave Scanlan forced out as Eaglecrest’s general manager, says decision ‘came as a complete shock to me’

Resort’s leader for past 7 years says board seeking a “more office-process, paper-oriented” manager.

The entrance to the Alaska Gasline Development Corp.’s Anchorage office is seen on Aug. 11, 2023. The state-owned AGDC is pushing for a massive project that would ship natural gas south from the North Slope, liquefy it and send it on tankers from Cook Inlet to Asian markets. The AGDC proposal is among many that have been raised since the 1970s to try commercialize the North Slope’s stranded natural gas. (Yereth Rosen/Alaska Beacon)
Eight young Alaskans sue to block proposed trans-Alaska natural gas pipeline

Plaintiffs cite climate change that harms their access to fish, wildlife and natural resources.

(Michael Penn / Juneau Empire file photo)
Police calls for Tuesday, May 21, 2024

This report contains public information from law enforcement and public safety agencies.

Most Read