Separate from the borough general fund that pays for police, the local contribution for schools, the Nolan Center, recreation programs and other public services, the borough maintains three accounts dedicated to industrial and residential development.
The combined balance of the three accounts could total about $2.3 million by the end of the fiscal year next June 30, assuming expenses and planned land sale revenues come in as expected.
All three funds date back to the 1990s and are focused on making borough property available for private development. The funds use revenues from land sales to cover municipal expenses like putting in streets and utilities to allow for the sale of more lots.
One account is used to fund residential land development, such as the 20 lots that will be sold next year at the Alder Top Village (Keishangita.’aan) subdivision at the site of the former Bureau of Indian Affairs boarding school near Shoemaker Bay.
A different account, the Mill Property Development Fund, is dedicated to the borough’s efforts to bring in private investment for redevelopment of the former sawmill property just past 6-Mile.
The smallest of the three funds is set aside to pay for developing smaller industrial lots in town, such as the eight parcels just off Bennett Street on the way to the airport that the borough is planning to sell this fall.
The assembly in July approved a $233,000 contract with Ketchikan Ready-Mix and Quarry to put in two new gravel-surface streets from Bennett Street into the industrial subdivision. The short streets, Fifth and Sixth, will provide access to the eight lots.
The borough will bring in overhead electrical lines for the lots but will not put in water and sewer lines — and has no plans for the costly undertaking.
Without water and sewer lines, the lots would, for example, be a good storage location for boats, commercial fishing gear or equipment, said Borough Manager Mason Villarma.
Assuming all eight lots sell at their appraised value, which will be determined before the public sale, the proceeds would replenish the Industrial Construction Fund to an estimated $675,000 balance next year, which could be used for future projects. The assembly created the fund in 1991, specifically to provide seed money and a continuous source of funds to develop borough land for industrial use.
Plans for development and sale of additional lots in the industrial subdivision of borough land would depend on buyer interest for this fall’s eight lots, Villarma said.
The Residential Construction Fund is paying for installation of streets, water and sewer and electrical service to the Alder Top subdivision, with those costs estimated at more than $2.5 million, Villarma reported last month.
The borough could recover about half of the development costs if all 20 lots sell at their appraised value, which will be determined and publicized before the public sale.
Even with the heavy spend to develop the former boarding school property, the account could end the fiscal year next June with about $400,000, which the assembly could appropriate toward the next phase of putting in more residential lots at the property.
The assembly created the fund in 1992.
The Mill Property Development Fund is the largest of the three special accounts. The source of its original funding dates back to 1996, when Congress appropriated $110 million to Southeast Alaska communities to spend as they chose to help build back their economies after the loss of the timber and pulp industry.
The borough dipped into the development fund in 2022 when it paid $2.5 million to buy the former sawmill property from its private owners, who were looking to sell. The assembly decided the community would have a better chance of attracting a large-scale user — and new employer— for the property if the borough bought the roughly 40 acres intact rather than risk the owners might sell off the land in pieces.
The borough is leasing a small portion of the acreage to Juneau-based Channel Construction, which receives scrap metal at the site for its long-standing Southeast Alaska business of barging old vehicles and other metal out of state for recycling. The company pays $27,000 a year on the five-year land lease.
The waterfront bulkhead at the property is in disrepair, and costly improvements would be needed for a permanent tenant or new owner, Villarma said.
Borough officials are in discussions with Alaska Marine Lines and Boyer Towing about possibly relocating their operations to the former mill site, moving out of the downtown staging area they lease from the borough. That would include moving the borough-owned barge ramp out of downtown to the 6-Mile property.
Opening up the area in front of the City Dock for other uses could be a plus for the community, specifically tourism-related businesses, Villarma said. “It’s a viable sector of growth in our community.”
But nothing would be rushed, with no plans to overwhelm the community, he said, adding it would be a “steady, calculated growth in the tourism sector.”
Besides opening up downtown waterfront acreage, another impetus for looking to move the barge loading and offloading facility is the condition of the barge ramp itself, Villarma said.
“The ramp is beyond its useful life, and while the flotation system was repaired in recent years,” more spending will be needed to extend its life. “This is a good time to consider a new facility,” he said.
To do its homework for putting in a new barge ramp, with mooring dolphins and other site work at the 6-Mile property, the borough is modeling how it might share costs with the barge lines on the project, the manager said.
If the municipality needs to raise money for its share of the work, it could issue revenue bonds that would be paid back by lease fees on the facility, not property taxes, Villarma explained.
He said building a new barge landing could cost $20 million if the borough contracted for the work, though the cost likely would be less if a private developer took on the project.
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