Holiday Inn is the latest downtown hotel to convert to apartments

rshinohara@adn.comDecember 8, 2012 

Something's changing in downtown Anchorage: Hundreds more people may soon be living there.

Workers are transforming the old Holiday Inn-Howard Johnson at Fourth Avenue and C Street into the new Anchorage City Limits Lofts Apartments -- no longer a hotel but about 200 apartments.

Owner Randy Comer says he expects it to be ready for rentals in about three months. The name is a takeoff on the public television music show "Austin City Limits" because Comer and his wife, Jennifer, say they expect to feature live music for residents.

The Lofts is the third large project converting older downtown buildings to modern apartments since 2006.

This year, the owner of Inlet Tower at 12th Avenue and L Street began turning the 14-story building into apartments. It was a hotel. The plans call for 180 units, said Jeff Cunningham, Inlet Tower chief operating officer.

A third downtown building -- the 14-story McKinley Tower at Fourth Avenue and Denali Street, long known as the MacKay Building -- was rehabilitated and re-opened as apartments in 2006 after having fallen into disrepair.

All three of these complexes rent efficiency and one-bedroom apartments. Inlet Tower and Anchorage City Limits Lofts have agreed to set aside about half their units as affordable housing -- some of the rents will be capped, or in one case restricted to tenants earning 50 percent or less of the Anchorage median income.

Inlet Tower units rent for $706 per month and up, Cunningham said in an email.

The least expensive units at the Lofts will be about $745.

Both projects also propose having units that would be rented to corporations at higher rates.

Part of the reason for the shift from hotel rooms to apartments may be that there's a need for housing downtown, particularly affordable housing, and financing was available for apartments. The Alaska Housing Finance Corporation, a state agency with a mission of providing safe and affordable housing, financed conversion and purchase of Inlet Tower and Anchorage City Limit Lofts, each with loans of around $9 million.

Also, said Michael Mohn, partner in the Seattle-based hotel consulting and brokerage firm Kennedy and Mohn, there's been a huge influx of new hotels into Anchorage over recent years, and some older hotels aren't as much in demand. "You make less and less money," Mohn said.

The building at Fourth and C opened as a Holiday Inn in 1971, and later operated as a Howard Johnson. Inlet Tower, built in 1951, was the L Street Apartments and later became a hotel. The interior of Inlet Tower was gutted and renovated in 1991, according to loan documents.

THE EFFICIENCY ATTRACTION

Black-Smith Bethard and Carlson LLC did a market study for the Lofts and concluded there appears to be pent-up demand for efficiency units in the central business district. Most of the new units are efficiencies or studio apartments -- not actual lofts -- and some are one bedrooms. An efficiency at the Lofts would have approximately 350 square feet, and a one-bedroom would be about 700 square feet, according to AHFC documents.

Some tenants of efficiency apartments at Inlet Tower and McKinley Tower say they made the move for dramatic views, easy access to downtown shopping, nightlife and other activities, and good landlords.

Chris Snyder, his fiancee and son moved into Inlet Tower three weeks ago. They like being close to downtown, and there's a school nearby, Snyder said.

They've secured a good-sized unit on the 14th floor. "It's an awesome view," he said. "I see the Chugach Range, and it extends all the way to the Kenai Peninsula. We get the sunrise every morning."

He and his fiancee are singer-songwriters. They were taken when they saw a grand piano in the lobby at Inlet Tower. "It felt really like home."

Troy Tracy, a Navy recruiter, moved into McKinley Tower in March. "You can walk anywhere," he said, and he can see Fur Rendezvous activities outside his window.

Matti Dupre, a programmer for the state Department of Health and Social Services, lives in a corner unit on Inlet Tower's 11th floor. He likes the location and having a commercial landlord, where he anticipates there would be few problems, he said.

Dupre said tenants seem to range in age from about 21 to 70.

THE CITY PLANNING VIEW

The city's comprehensive plan, Anchorage 2020, calls for more housing near employment and shopping, where people can walk instead of having to drive, said city planner Erika McConnell.

The downtown plan urges more housing be built, and a mix of housing for lower, middle and upper income households, she said. Having more residents should boost businesses and keep the city center vibrant, the plan says.

One thing to be careful about with conversions of hotels to apartments, McConnell said, is parking. Hotels don't require as much.

Officials at Inlet Tower and Anchorage City Limits Lofts say they have enough.

But the Inlet Tower conversion didn't exactly thrill some neighbors when they heard about it.

Members of the South Addition Community Council learned recently, after the fact, that Inlet Tower had been switching to apartments, said Bonnie Harris, council president. The lack of neighborhood involvement on such issues as parking, traffic and possible effects on the neighborhood elementary school, Inlet View, was a big topic at the November council meeting, she said.

Alaska Housing Finance spokeswoman Stacy Schubert said the Inlet Tower and Lofts projects were approved in public board meetings with advance notice, and AHFC has an opt-in mailing list. But she said after talking with South Addition Council members, the agency is looking at requiring developers to notify councils.

APARTMENTS PLUS

Parking should be adequate for tenants at Anchorage City Limit Lofts, with about 90 on-site spaces and 108 adjacent city-owned parking spaces that can be leased, AHFC staff concluded.

It's also close to bus routes.

Comer, whose company HP Holdings Inc. owns the old Howard Johnson, said he had Anchorage 2020 in mind when he decided to pursue the project.

"We're really trying to develop a place where people can literally walk to work," Comer said. "That location -- between A and C and Third and Fourth Avenue -- is perfect."

There are 2,200 hotel rooms within a few blocks of the Lofts, he said, all needing workers who in turn need a place to live. A raft of retail employers, such as the 5th Avenue mall, Nordstrom and J.C. Penney, are just out the door, he noted.

The Comers say they want to create a culture centered on music inside the Lofts.

They're turning a commons area into an open-mike area, and will also bring in musicians. They won't have alcohol. "There's just no venues for people to go play music that's not alcohol-based," Comer said.

The amenities go beyond what's in a standard apartment building: lounge areas with couches and chairs, places to read a book, meet friends, buy lunch -- soup and sandwiches -- use your laptop or listen to live music, Comer said. There's also a swimming pool and workout area.

The Comers aren't looking for the music venue to be a revenue source, Randy Come said.

"We believe it will fill us up and have better clientele if we can do the community areas well."


Reach Rosemary Shinohara at rshinohara@adn.com or 257-4340.

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