Click the image to link to city documents on the land. (Map: City of Sitka)

Nine lots in Sitka’s Whitcomb Heights subdivision are on the market.

The lots are in an area known as “the Benchlands.” They’re part of a large tract the city purchased in 2007. The goal back then was to develop the land for sale, and the expectation was that the city might make some money in the process.

But now, city officials are simply hoping they can break even.

The plan was to have a property auction at last night’s regular Assembly meeting. A memo in the agenda packet even spelled out a process: The mayor would ask people to stand up if they were interested in any of the nine lots in Whitcomb Heights, and then let them hold up colored pieces of paper to signal bids, increasing in $100 increments, until finally the lots were sold.

But there were no takers.

“Not a great deal of interest. This is probably the worst time of the year to sell it, and it’s the worst winter we’ve had in recent memory,” said city Planning Director Wells Williams who, despite that statement, was upbeat about the future of the neighborhood.

“It’ll just take time,” he told the Assembly. “It’ll go on its own merits, and you’ll end up at least having a quality subdivision on Jacobs Circle.”

Without any bidders or any auction last night, the lots will now go to what’s known as “over the counter” sales. Interested buyers can check in with the city Planning Department to find out how to acquire one of the lots. The smallest lot is about 11,000 sq. ft.; the biggest, almost 30,000 sq. ft.

Prices start just shy of $99,000, and go up to more than $164,000.

The lots represent about a sixth of the entire subdivision, and if every lot in this first batch sells for its minimum bid price, the city will collect $1.1 million.

The city spent more than $3 million to buy the entire property and in the time since, has spent nearly $10 million to develop it. That includes money from grants and some major purchases, like a water tower.

Assembly member Mike Reif asked city Finance Director Jay Sweeney about ballpark figures he had drawn up, showing how the money would shake out.

SWEENEY: “I thought the very best we could do would be to break even in total after all is said and done on development of the benchlands.”
REIF: “And that’s the very best, but in the actual calculations you’d thrown out a real rough figure of actually a loss.”
SWEENEY: “That is correct, sir.”
REIF: “Yeah. So hope for break-even, but that’s probably wishful thinking.”
SWEENEY: “That would be my opinion.”

Reif said he brought it up because he wants the city to look at other methods of developing the rest of the Benchlands, such as a Local Improvement District, where residents of a specific neighborhood share the cost of developing infrastructure in that neighborhood.

Assembly member Phyllis Hackett said it’s a good project and that breaking even would be just fine. The project has reaped benefits in jobs for contractors and in freeing up land for residents to build homes on. But she also had ideas about ways the city could lessen its losses going forward.

“I would really like to see – and every time I say it, I see eyes roll – but I would really like to consider the idea of selling some of the lots up there undeveloped,” Hackett said, adding that doing so would give more options to property owners, and also cut down on the development costs for the city. “A win-win,” she called it.

“I don’t think that that’s a bad idea,” agreed Assembly member Terry Blake. “Obviously, we’re getting into a market where we cannot develop these lots and market them without losing money. Any alternative we can look at, at this point, would be a good one.”

Williams, meanwhile, said last night that he and his staff would be ready and delighted on Wednesday morning to talk to anyone interested in buying one of the nine lots now for sale.