Don’t think of it as selling the borough-owned former hospital building and it’s almost two acres of land for a steep discount to its appraised value. Think of it as potentially getting an immense amount of future value from an unused liability that is costing the borough about $100,000 a year to heat and insure.
When you look at the math that way, a developer’s offer to pay the borough $200,000 for the hospital property looks pretty reasonable.
Borough code allows the municipality to sell property at less than its appraised value if the sale will promote economic development in the community. Turning the empty hospital building and six smaller, adjoining lots of unused borough land into a housing development is exactly the kind of economic benefit envisioned for such sales.
The developer, Wayne Johnson, operating under the name Wrangell Heritage House Development, is looking at building up to 48 housing units, probably as condominiums, targeting well-off Lower 48 residents from Arizona, California, Georgia too — where Johnson and his wife live — who want to escape the summer heat and enjoy a second home in Alaska.
In addition to going after Lower 48 seasonal transplants, Johnson believes year-round residents will want some of the units, helping to ease Wrangell’s chronic and debilitating housing shortage. Employers know too well the problems of attracting and keeping new hires in town if they can’t find housing.
Johnson estimates land acquisition costs, demolition of the hospital building and construction could total between $13.5 million and $16 million, making it perhaps the largest private-sector investment ever in Wrangell. He estimates demolition alone at $850,000.
So here’s the math: The borough stops paying to heat and insure the building; the borough deposits the $200,000 it gets from selling the hospital, plus whatever it receives for the six smaller lots next door; all of the property goes onto the tax rolls; and if Johnson goes ahead with the project, millions of dollars will be spent on payroll in town to take down the hospital and put up the new housing.
It adds up to a good deal for everyone.
To make sure, the hospital sale price will undergo review by the borough’s economic development board and planning and zoning commission before the assembly takes up the issue.
This is an important decision for Wrangell, and the best opportunity — the only plausible opportunity — to come around since SEARHC moved out of the hospital three years ago and the borough started looking for buyers for the property.
So don’t think of the $200,000 as a fire-sale price. Consider it a bargain for the community.
-- Wrangell Sentinel
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