A complex proposal to tentatively purchase 18 parcels of Ketchikan Gateway Borough-owned land for $10 a piece passed its first hurdle Tuesday.
The proposal was submitted by developer Harlan Heaton. He already owns some property in that area, and wants to buy the 18 lots in the Mountain Point Subdivision. But, Heaton wants the borough to retain title to them for at least five years.
Heaton doesn’t want to pay property tax on the parcels until he’s also purchased lots in that area owned by Alaska Mental Health Trust, and has set up a Special Assessment District, or SAD. That’s an agreement among all the property owners in that area, with the goal of building roads and utilities.
Heaton doesn’t want to pay property tax right away on the Trust parcels, either, if he’s able to buy them. So, the agreement also calls for the borough to temporarily hold title to those lots, too, while he works with other property owners on the SAD.
Speaking to the assembly, Heaton noted that a borough plan to develop roads and utilities in the subdivision estimated it would cost about $11.5 million, or about $120,000 per parcel.
“Under my plan, the estimate is $3.5 million, or $36,000 per lot,” he said.
That, of course, depends on a lot of variables.
Heaton said he understands why some people would question the selling price of $10 per lot, and his desire to hold off on paying property tax while developing the SAD.
But, Heaton said he was the only person to put forward any kind of purchase proposal, and that should tell the borough how much the public thinks they are worth. He said the undeveloped parcels are not easily accessed, and won’t be without a lot of work.
“There’s a number of issues. I’ve spent five months trying to research this and present a well-thought-out process to move forward,” he said. “But I’m not going to do it alone.”
Some of the property owners in that subdivision spoke to the assembly, too, and were concerned about Heaton’s proposal. Kate Govaars and her husband, Jos, are among them.
She said there are seven or eight lots with road access that residents funded themselves.
“My husband and I paid fair-market value for our property in that area, and we personally paid for road access that is up to borough spec,” she said. “Since we have already footed the bill for road and utility access to ours and other parcels, and continue to develop to our existing property. We should not be further forced to pay for our efforts by being assessed a nearly $40,000 fee per parcel.”
Govaars asked that any lots that have existing development and permits be excluded from any future Special Assessment District.
Heaton said in his comments that he’d be willing to work with them on a waiver.
After much discussion, the assembly eventually agreed to move forward with Heaton’s proposal. But, any negotiated agreement must come back to the assembly for review and approval.