Assembly OKs Northpointe purchase

They didn't all like the deal, but several members said it seemed like the best option on the table now.

"We are in a pickle," said Assemblywoman Sheila Selkregg.

The deal would be financed and paid for by the Anchorage Community Development Authority, an independent city agency that took over for the old Anchorage Parking Authority and operates city parking facilities. City Chief Fiscal Officer Sharon Weddleton told the Assembly it's highly unlikely that any taxpayer dollars will ever be involved.

Assembly members said approving the deal is the only way the city can be sure it protects a $2.9 million interest it has in the project.

Vice Chairman Dan Coffey said he didn't like the choice and wished Northpointe had been planned differently. But, he said, "for me, the only reasonable alternative is to do what ACDA is asking ...

"As much as I don't like the pickle ... I don't see any other way out."

Northpointe Bluff was envisioned a few years ago as a trendy subdivision on a city-owned corner of Government Hill that once housed the old Hollywood Vista apartments, a federal housing project built in the 1950s that fell into disrepair over the years. The federal government transferred the property to the city about a decade ago, and the ramshackle apartment complex was demolished.

The property ended up with the development authority.

Hoping to see Northpointe emerge as a neighborhood of upscale single-family homes and duplexes on a bluff overlooking downtown Anchorage against a backdrop of the Chugach Range, the development authority sold the land to developer Marc Marlow's Jaguar Development Group in 2007 for $3.5 million.

Marlow paid the authority $525,000 down and gave the city a deed of trust on the land to secure the rest. Marlow was to put in improvements such as streets, parks and utilities and sell lots to other builders or individuals; he borrowed about $4.2 million from Northrim Bank to finance that work, and used the same land to secure the bank loan. The development authority agreed to take a subordinate position to the bank's loan on the property to make the deal work.

A dispute between the development authority and Marlow about who was responsible for paying a contractor to haul gravel from the Northpointe site to the Port of Anchorage and a second disposal site led to the contractor suing Marlow and putting a lien on the project. That, Marlow has said, prevented him from being able to sell lots to pay off the bank loan, and the bank foreclosed. The foreclosure sale is set for next month.

If the city did nothing, the property could be claimed by Northrim itself or anyone else willing to pay off the roughly $3.9 million remaining on the bank loan. The authority would lose any hold it had on the property or its $2.9 million interest in it.

Marlow will get no money out of the foreclosure sale, Assembly members and city officials said. "Not one penny goes to the developer," Selkregg said.

Assemblywoman Debbie Ossiander recalled the beginnings of the Northpointe Bluff project as "a hard sell from the Begich administration."

"I will extremely reluctantly and resentfully be voting yes," she said.

Only one member, South Anchorage Assemblyman Chris Birch, voted no.

Birch said he thinks the authority should just let the deal go to foreclosure. If the improved subdivision is as valuable as the authority's appraisals suggest, the foreclosure sale should attract other bidders willing to pay off both the bank and the city's debt on it, he said.