Anchorage Daily News

A new report assessing the industrial land in Anchorage confirms what everyone in commercial real estate already knows -- Anchorage is critically short of industrial land. This shortage is a serious threat to our economic growth.

The Anchorage Industrial Land Assessment report is an in-depth analysis of whether the amount of industrial land in Anchorage is adequate for the next 20 years. The report, from Economic & Planning Systems Inc. for the Anchorage Economic Development Corp. and the city, has these key findings:

• A strong industrial sector is vital to the economy, and viable industrial land is a key component of the industrial sector.

• Vacant industrial land in the Anchorage Bowl is insufficient to meet demand though 2030, assuming even moderate growth.

• On paper the city appears to have adequate amounts of industrial-zoned land, but in reality much is constrained and difficult to economically develop.

The report contains policy recommendations to better use available land to increase the supply. This could help, but is not a solution.

• Available industrial land in Anchorage needs to be protected from other uses, primarily retail. This will retain industrial land. Otherwise, as the shortage of industrial land increases, industry will shift to Mat-Su, where more industrial land is available, and cheaper.

• Public and quasi-public land owners -- such as the state, railroad, port, airport and city --need to work together to maximize the use of industrial land.

The base-line projection shows a need for 720 acres of industrial land through 2030. But only 431 acres without soil limitations are available in Anchorage including the land north to Eklutna.

That is a shortage of 289 acres. Better use of industrial land could increase the available land by 166 to 331 acres, giving us barely enough in the best-case scenario.

Protecting industrial land from other uses is addressed in the proposed change in land-use regulations, Title 21. Under the existing code, industrial-zoned land may be used for other purposes such as retail. The proposed change will restrict industrial-zoned land use to only industrial.

For example, the land on C Street in South Anchorage is zoned industrial. But construction of a Target store at 100th Avenue and C Street increases the likelihood of retail use for land in that area. Retail can pay more for land than industrial, so the market is causing these lands to be held for retailing, which lowers the supply and increases the price of industrial land.

This study only goes out to 2030. What happens after that? Anchorage is landlocked, with a growing population and rising demand for all land uses. Even if we do everything the report recommends, we will eventually face restricted economic growth because of a shortage of industrial land.

With a fixed supply of land, this is a zero-sum game. If one use gains, another loses. The Title 21 proposed change, while preserving industrial land, would be at the expense of other land uses, reducing their supply and driving up their prices, and does nothing to solve the underlying problem, which is -- we are short on land.

I am disappointed that the study does not recommend considering adding to the supply of industrial land through construction of the Knik Arm bridge to open up land across the inlet. The bridge has been controversial. In April, regional transportation planners took initial steps to remove the bridge from the list of approved projects. If finalized, that would block needed federal funding of the bridge. The planners felt the bridge would use up funds needed more for other projects.

There is no easy way around Anchorage's land-shortage problem. We have to take a long-term regional approach and find the best solution. A bridge seems the most logical solution. While a bridge will use money that could be used for other projects, ignoring this possible solution to our land shortage has a very high cost that might well be greater than the benefits of projects that the bridge money might fund.

This study is a very important first step in providing a base line for what I hope are further studies to help us insure an adequate supply of not just industrial land, but land for all uses.

Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His opinion column appears regularly in The Anchorage Daily News.

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