The borough’s economic development board voted unanimously March 5 to recommend the assembly approve the sale of the former hospital property for $200,000 to Wayne Johnson, a Georgia-based real estate developer.
Johnson is planning to demolish the building and construct up to 48 units of condo-style housing, with covered parking. He also wants to purchase six borough-owned vacant lots behind the hospital property, which the borough manager has said would be sold at their appraised value.
Regardless of some concerns, economic development board members expressed hope about the sale and the potential for more housing options in Wrangell. Board member John DeRuyter noted at the meeting that it seems everything in Wrangell always comes down to housing.
In addition to new housing, the project could provide economic and tax benefits for the borough, and construction could result in employment opportunities.
“(Johnson) sees the same possibility of Wrangell that I see,” Mayor Patty Gilbert said at the meeting.
The borough currently owns the hospital property, which has been empty since 2021 when SEARHC moved into its new Wrangell Medical Center. The borough has been trying to sell the property since 2022 and received no firm offers until Johnson’s.
The sale price of $200,000 is below the appraised value of the property at $830,000, and less than the $470,000 asking price posted by the borough last year.
Municipal code, however, allows the borough to sell property at less than appraised value if the economic development board, planning and zoning commission and assembly determine the sale would promote economic development in the community.
The borough currently spends $100,000 a year on maintenance and utilities for the empty building. Additionally, the economic development board noted that the boiler in the building went out last winter, and that it’s only a matter of time until a larger problem arises.
The building contains asbestos, which creates an added liability for the borough.
Johnson estimates demolition of the hospital will cost $850,000, and new construction will cost $12.5 million to $15 million.
The sale agreement on the hospital property does not bind Johnson to demolition or construction.
Though the economic development board recommended that the sale go ahead, members raised some concerns and questions at the March 5 meeting, including Johnson’s qualifications as a developer.
Kate Thomas, the borough’s economic development director, said officials have investigated his qualifications. Johnson has successfully developed several hundred housing units, mostly for senior citizens, though his plans for the Wrangell development include a wider variety of ages.
He has two advanced degrees from Georgia universities including a Ph.D. in higher education leadership and a master’s degree in business administration.
Other concerns were raised whether the borough could end up with the property again if Johnson were to walk away from it. Borough Clerk Kim Lane stated that because the sale agreement requires Johnson to pay for the property in full before closing, it’s unlikely the borough would end up with the property again.
The planning and zoning commission will consider the property sale proposal at its Thursday, March 14, meeting.
The sale of the hospital property, along with final approval for the sale of the additional six lots, are tentatively planned for the April 9 borough assembly meeting.
If the assembly approves the sale and a separate deal is reached on the additional six lots, the hospital land transaction could close before May 30. Johnson has said he plans to demolish the old building this year and begin construction next year. He hopes the housing units would be complete by 2026.
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