The borough is proposing to sell the 10 front-row lots (numbers 2 through 9, and 21 and 22) by competitive bid, with the 10 back-row lots (numbers 11 to 20) to go on sale in a lottery. The borough will conduct another public survey and hold additional public hearings before adopting the final sales plan.
Borough staff presented their plan for selling the first 20 lots of the Alder Top Village (Keishangita.'aan) subdivision to the Economic Development Board and members of the public at a work session Nov. 16. The plan is to sell the first row of 10 lots - the ones with waterfront views - at a public auction and the second row of 10 using a lottery system.
The auction is tentatively scheduled for May 2024 and the lottery for June 2024, with buyers receiving access to their land in September, though this timeline will be dependent on the construction schedule and municipal processes.
With an estimated value of about $3 per square foot, the first row lots are "the bread and butter of the area," said Economic Development Director Kate Thomas. The ones farther from the water were appraised at about $2.50 per square foot.
The lots range in size from 19,000 to 23,000 square feet, around half an acre.
The combination of sale methods ensures that the more affordable lots in the back row will be sold at fair market value, not priced up by the competitive auction process.
Two lots on the north end of the property are reserved for the Wrangell Cooperative Association. According to Tribal Administrator Esther Aaltséen Reese, they'll be used as a memorial for people who attended the Wrangell Institute, a Bureau of Indian Affairs boarding school that used to be located at the site. The school closed in 1975. Over the years, students have come forward with stories about the discrimination and abuse that occurred there.
The starting price range for land in the subdivision is around $45,000 to $70,000 per lot. Depending on demand and how much the auction drives up prices, the borough could recover about $1.3 million of its $2.2 million investment in the property, which was used to put in streets and utilities.
Borough staff hope to attract first-time homebuyers and young families to the area, who will make Alder Top Village their home year-round. Ideally, the new development will open up additional housing in town, as former renters move to Alder Top.
"It's a trickle-down effect," said Interim Deputy Borough Manager Kim Lane. "People will purchase these homes ... and open up other housing that people may be able to afford."
To encourage its target demographic to buy the land, borough staff considered limiting who could participate in the lottery to Alaska residents and first-time homebuyers, but ultimately decided against it in the draft plan.
Lottery participants "can put in 10 applications ... but you're only going to be able to secure one lot in that sale," said Thomas. "And because it's random, there's no way that all those lots would go to non-Wrangell residents." She and her fellow borough staff members felt that the inherent limitations of the lottery system would prevent snowbirds or big out-of-town developers from monopolizing the back 10 lots.
"Why, when the lottery is random and you can only get one lot, further restrict the process and procedure?" she asked.
The pricier front 10 lots will go to the highest bidder, with no restrictions on how many lots a single entity can purchase. This method follows past borough precedent for borough land sales.
"We felt like it wasn't a bad idea to allow for those lots up front to be more competitive because they're so coveted," said Thomas.
Work session attendees were also generally opposed to rules dictating how quickly buyers would have to build on the land after purchasing it.
"We're trying to come up with achievable restrictions," said Lane, "not so many restrictions that it makes it difficult for people," since first-time homebuyers might struggle to meet strict construction deadlines.
"Approaching purchasing a piece of property for the first time ... it's a super-expensive undertaking," added board member Caitlin Cardinell. "It's probably going to take a while for these people to build up the capital, if we're really truly trying to put these lots into the hands of people who have been working their whole lives."
There will likely be some restrictions on what landowners can do on their properties after they've purchased the land, however. These restrictions, or "protective covenants," will prevent owners from using the lots for storage or putting trailers or mobile homes on the lots as permanent dwellings.
Community members still have ample time to engage with the sale plan before it goes to the assembly for approval - likely in January 2024. In the coming weeks, the borough will conduct another community survey to get feedback on the plan before the Economic Development Board meets in December to decide whether to recommend it to the assembly.
The second survey will "publish the proposal and say, 'Did we get it right? You might not like all of it, but is it palatable to you,'" said Thomas. Community members can comment on the proposal by responding to the online survey or by calling or emailing the borough.
"We want to see this land used for productive purposes," Thomas said at the work session. "We want to see the community's engagement in it. We want to see whoever is interested to have an opportunity to participate."
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