Anchorage developer pursues Petersburg affordable housing project

Three Petersburg lots located next to the entrance of the Joy Janssen Clinic. (Photo by Joe Viechnicki/KFSK)

A developer has proposed building 15 affordable housing apartments on Excel Street next to the Petersburg Medical Center. The Petersburg Borough Assembly on Monday sounded supportive of the proposal and may vote on a letter of support later this month, despite some concerns from neighboring property owners.

The Anchorage company Swell LLC is proposing to build a two-story apartment building across the street from the Joy Janssen Clinic at the Petersburg Medical Center. The company wants to apply for low income housing tax credits from the Alaska Housing Finance Corporation and says some of the units could rent for as low as $478 a month.

Neighbor Doug Welde had concerns about the plans for the land behind his home.

“You think about what might be in your backyard and I know, like I said, we can’t pick and choose but I’m wondering, well, 15 units, they’ve got to have 15 parking spaces so I hope they have enough room for 15 parking spaces for 15 units,” Welde told the Assembly Monday. “And that’s going to be a big building, in my back yard, like you’d like to have it in your backyard.”

The three lots on Excel Street, owned by Lyle and Carol Bennett, were listed for sale for a combined $279,000. They are commercially zoned lots and this type of multi-family housing is an allowable use of that land. That means the development would not require any special approval by the planning commission. It will need a building permit and state fire marshal approval.

Assembly member Jeigh Stanton Gregor was supportive of the proposal.

“I am excited this group has taken it upon themselves to have the forethought to purchase these lots and to have a vision for bringing affordable housing to some of our working poor here in Petersburg,” Stanton Gregor said. “I’m most certainly in favor of a letter of support.”

The topic was only on the agenda as a discussion item and the Assembly wanted to put it on next meeting’s agenda for the purpose of voting.

Petersburg’s 2016 comprehensive plan identified affordable housing as a need for the workforce, especially within walking distance of downtown.

In an interview following the meeting, one of the co-owners of Swell LLC, John McGrew, said the company is excited about the downtown location, mainly to provide for workers.

“People were a little concerned about what type of people would live there and this housing is really for, a lot of it is kind of workforce housing, you know it’s people making 50-60 percent of the median income,” McGrew said. “We do have a couple that are 30 percent. And then we have I think three units that are market rate so it can be leased to anyone. So it’s kind of broad mix.”

The apartments would be one and two-bedroom units. Half would be accessible for handicapped residents.

Swell LLC was founded in 2014, according to the company’s website but McGrew and his partner have been doing housing projects independently since 1995. McGrew said they are completing a 30-unit housing project in Kodiak and plan to have a total of 70 apartments in that community eventually. Swell is also building another 30-unit project in Kachemak City near Homer.

Developers apply for and are awarded federal income tax credits and can turn around and sell those to investors looking to reduce their federal taxes. That money is used to build or rehab low income apartments. And McGrew explained with low rents, it’s difficult to build such housing without that money.

“I would say that probably 90 percent of the housing, affordable housing that’s built in the country uses these type of tax credits,” he said. “And the community should kind of look at this as kind of winning a grant for the community to bring some of these tax credits in to help with housing.”

McGrew said the apartments will be well built, maintained and will have adequate parking.

The application to the AHFC is due this month. If Swell wins tax credits for this project, construction could start next summer and finish by the summer of 2021.

Meanwhile the Assembly did pass the first reading of an ordinance that could lower property tax bills for low-income housing units. It could base tax assessments on the property’s income rather than its value, depending on approval by the Assembly on a case-by-case basis.

“This is a state statute that would put it in our code,” said Jody Tow, the borough’s finance director. “Many municipalities have it in Alaska and it basically helps companies that want to come in and build low-income housing, in Petersburg or in other towns, be able to afford to do so.”

The vote was unanimous for that new local law in first reading. It takes another two approvals by the assembly before taking effect.

Joe Viechnicki is a reporter at KFSK in Petersburg.

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