Part of an occasional series.
In February, the Rustic Goat bistro, a restaurant operated by Kaladi Brothers Coffee Co., opened in Anchorage's Turnagain neighborhood, part of a mixed-use development called Turnagain Crossing. On the same lot, tenants are about to start moving into a six-unit building with townhouse-style apartments.
Taken together, Turnagain Crossing is an experiment, for Anchorage, in mixing residential with commercial on a small site. It required multiple trips to the Anchorage Assembly and a special change in zoning code.
In a phone interview from his home in Boulder, Colo., developer J. Jay Brooks talked to the Daily News about the lessons of the project, and the future of density in Anchorage.
Q. Tell me about your background in Anchorage and in real estate.
A. I grew up in Anchorage. I went to elementary through high school and then I went to college at the University of Wisconsin in Madison, and they had at the time what was considered -- and probably still is -- the best real estate school in the country. In school we would do field trips to Chicago and other more urban areas, and then as you travel, you start seeing how other developers are solving challenges.
And so I came back to Anchorage. ... you know, you see the world through different lenses. Mine was, how you start picking up ideas from other places? At the time, when I was in the Midwest, they were converting old warehouse buildings into artists' lofts and live-work space and things like that. So the first project I tried doing when I was in Anchorage, I was probably 25 years old, was I tried to buy an old warehouse from Alaska Railroad and tried to convert it to artists' lofts.
Q. Can you talk about your concept of a neighborhood destination?
A. When I was in college I would study in the student union with a cup of coffee or (at) other coffee shops. And still what I think is interesting ... if you go to a lot of the Kaladi Brothers coffee shops, a large portion of the people are there with a laptop computer and working. And so, I wouldn't say a lifestyle change but it's part of how people like to get out and see what's going on in the community and meet people And that works for business and for personal reasons. I wanted to be one of those types of places where I could either walk or bike.
Q. What appealed to you about doing a mixed-use development, why did you build Turnagain Crossing the way you did?
A. Economically, to draw from different sectors, different demand drivers. Just so I could in a sense hedge myself with one project against the other if one didn't do well as I hoped. And also to complement each other. I look for synergies, and that's where the sum is greater than the parts. That's what I was looking for here.
Q. How did the project change from start to finish?
A. The (Turnagain) Community Council and the people in the neighborhood didn't want a high-traffic use. They wanted a sit-down restaurant. So the coffee shop turned into a bistro. Luckily, for me, I picked the right operator with Kaladi Brothers. Because I felt committed to working with Kaladi Brothers and when they were willing to step it up into a sit-down restaurant because of what the community wanted, you know, (the company) rolled with it. So that was good.
For the original apartment concept, I was trying to understand if we could build (a) poured concrete ground floor with framed construction of a couple of floors above that. But because of the fire code and the cost of the concrete it was significantly more in cost than the rents would justify. So we threw that away. And we threw away complete drawings of architectural and engineering. And the other thing is that's about at the same time as we found an underground utility vault that no one knew about, that no one saw. We had to redesign the site again, because we lost parking, and so we built fewer apartments. That was one of the reasons it was originally 12 units, to eight units, to six units, which is what we have today.
Q. What were, for you, the biggest challenges or roadblocks you encountered at the level of working with the municipality, and what do you think could change?
A. I'm not probably an expert on the new zoning code. What I can say is that the planning department was incredible. Since I split my time between Boulder, Colo., when (I) go to Title 21 meetings and they showed slides of what they want Anchorage to be, and put up pictures of Boulder because it's walkable, has nice density, it's got mixed-use, it's got a nice quality of life.
I guess that's where I think Anchorage is at a turning point right now. With better quality projects, (it's) making it so people want to live in Alaska. And it protects Alaska against an economic downturn, because people choose a way of life. But you have to be able to build for it. The planning department, I think, clearly understands that and was very accommodating. But it's a mixed blessing, like a double-edged sword. From my situation ... I'm going to learn from the city and the city's going to learn from me, that's what this "pilot project" is, to see if a mixed-use project can be executed in Anchorage and will it be successful. And the planning department was wonderful through that part of it. So the reason I brought up Boulder is, I can't even imagine here that a small developer would be able to quickly modify the zoning code to accomplish this and then go for the re-zone and do that within the eight months that I was able to do it.
It shows that these things, we have the ability to change it. What the city needs to understand and has been reaching out to me and a bunch of other people to understand, is the economics. And since the city doesn't take risks, and developers do, is reconciling that difference in experiences is what's needed to make sure this can happen again.
Q. Under city policy, a developer bears the costs of infrastructure associated with a project. What are your thoughts on that policy?
A. In this particular site, I can't remember exactly what my taxes were on that raw land, but it had been sitting vacant for a long time. What the city leaders need to understand is that when I build this, my taxes are going to go up for that site significantly. And you would expect that certain infrastructure and services would be paid for within what we pay in taxes. But instead, it's so expensive to integrate a small project with the existing electrical gas lines, it's so expensive to connect with that. And if they make it difficult for a small developer to tie into it they basically undermine the economics and make it to a large degree almost impossible.
Q. Ever since the Rustic Goat opened, parking has been an issue. How that has worked out these past two months?
A. We rented parking actually during construction. That's another interesting thing -- I'm actually doing a presentation to the Urban Land Institute on this project in the fall in New York and something that's an interesting characteristic about small-site mixed use is the staging of the construction. Even during that period of time we rented parking across the street. And we also had parking down the alleyway to the east. But since the Rustic Goat has opened they've rented parking to the west, the little office building to the west. So now we're renting parking well in excess, and we have access to parking, well in excess of the old code, which many people thought was a little bit too much.
The whole idea of Turnagain Crossing was that it would be local, and not draw from other parts of Anchorage. The whole idea is, and people have told us this, is that they will walk and bike. They won't be driving there. And that was the idea of building mixed use and creating housing nearby. Encouraging more dense housing nearby so people do have a place they can walk or bike to. That's the long term plan, to encourage that type of lifestyle. And that's where we want that to happen in other places in Anchorage.
Q. When you look around Anchorage, what do you see and how do you think it could be better when it comes to density?
A. You know, I think we can get there. Here's where I'm really hopeful. There's a lot of different user groups that didn't exist 20 years ago. And those user groups ... like the bicycle enthusiasts, the fat tire bikes ... I don't see in many other places. And that's where the way of life thing that's kind of uniquely Anchorage. Where I see other cities that I travel to look at other projects the city is built on, some of their unique amenities. So the Coastal Trail, the rest of the bicycle trails, the parks in town -- they need to be connected in a way so that people that do want to bike or walk will use them.
But the other side of that is, there's a lot of people in Anchorage that think that people in Anchorage will never reduce the use of their cars. And I think that's changing and I think this is an ideal time for the traffic department and municipality to invest in specifically that type of infrastructure.
Q. Looking back, would you do this project again?
A. I can say I would probably do it again because I think that Tim Gravel (of the Kaladi Brothers) has been a great partner to work with. He was the one that stepped up and decided to use the reclaimed timbers from Wards Cove (cannery, in Kenai).
There have been more sleepless nights this year, a lot of it not because of the planning department but the permitting department. Change-order fees to connect to storm drains, the delays caused by that and expenses passed on to me were some of the most stressful times. And the cost overruns that resulted from that. I'll decide. It's hard to tell right now whether I'd want to do it again but right now I want to get this thing done and stabilized. There's other complexities right now I've got to solve.
Q. What's next for you?
A. I own 10 acres with another partner of mine on the corner of Arctic and 26th and I'd really like to build mixed use there. But I don't like being away. It's hard for me to be away from my family, the amount of time and energy it takes. But I was in Vancouver at the ULI meeting this past week and I was talking to some other developers that I know and they were asking the same question. I don't think there's as much ability to make a difference in how people live in a city in Anchorage relative to Boulder. Boulder and a lot of other communities, Vancouver and Portland, cities with good developers that know what they're doing and creating wonderful little communities. But there aren't that many people doing it in Anchorage. For me, I still would love to be able to do cool projects in Anchorage just because, if I can make the economics work, I think it makes a difference.
Reach Devin Kelly at firstname.lastname@example.org or 257-4314.
By DEVIN KELLY