HATCHER PASS: JL Properties isn't convinced of public support; the borough is to proceed anyway.
WASILLA -- Anchorage developer JL Properties has ditched plans to develop a $38 million ski resort and residential subdivision at Hatcher Pass, citing scant public support for the project.
"We've developed a conceivable, achievable plan, but we just didn't want to take that step without the public support," JL Properties vice president David Germer said Friday.
The company withdrew quietly in October from a project to build an alpine and nordic ski facility with the Matanuska-Susitna Borough.
JL's departure has been rumored for months. There was no public announcement of the change. As late as mid-November, borough employees were still working under the assumption that JL was interested in the project.
The Mat-Su Assembly didn't know JL was off the project, either. Assembly members learned Friday evening via e-mail from Borough Manager John Duffy.
Duffy said he wanted to firm up plans for what should happen next. He planned to present the information at a Dec. 19 Assembly meeting.
"We're just starting to think about how you do this," Duffy said.
JL Properties was the fourth developer in 18 years to consider building on about 3,000 acres of Hatcher Pass land owned by the borough. Some called its plan the most promising so far.
Past plans for Hatcher Pass relied on heavy tourist traffic to make the ski area a go. JL instead planned a small, regional ski hill with two lifts that relied on the growing Valley population already skiing at Hatcher Pass.
The JL plan drew on seven other firms, including two companies that worked on high-end Whistler Ski Resort in British Columbia and former Olympic nordic skier Bill Spencer, who designed the cross-country ski trails.
A recreational project like Hatcher Pass would have been a first for JL Properties. The company is known for large developments such as the three-year, 760-unit housing project being wrapped up on Elmendorf Air Force Base. It is also working on the new Anchorage convention center and the 10-story Arctic Slope Regional Corp. office building in Midtown.
Duffy said he doesn't believe Hatcher Pass development will be delayed by the JL withdrawal. The project is still moving forward, he said.
The Assembly on Dec. 19 plans to review a contract with Anchorage firm DOWL Engineers to analyze the environmental impacts of building at Hatcher Pass. Borough officials last week were still negotiating a price for the nine- to 12-month project.
"We still had to do this step," Duffy said. "Now that JL has decided they don't want to take an active role in it, we're going to continue on getting the environmental document done."
The borough has more than one backup plan, Duffy said. He said he approached Alaska Housing Finance Corp. representatives about developing a new strategy. That might include finding a new private developer.
"We will have plenty of time to consider getting a private partner involved," Duffy said. "The consultant (Stainback Public/Private Real Estate) provided us with a couple alternatives on how we could still move forward."
The borough invested $50,000 in the partnership with JL Properties, money that went into drawing up development plans. Borough officials have said the borough has spent about $1.5 million on the project, about $850,000 of it in state funds.
Germer said JL had invested about $200,000 in the proposal.
The decision in October to end the project came after a Sept. 5 letter that JL president and CEO Jonathan Rubini faxed to the borough that signaled the company was ready to withdraw.
"It would be inappropriate to proceed into development without a stronger and more transparent expression of community support," the letter stated.
Duffy and Rubini agreed Sept. 6 to give the project another 30 days, Duffy said. Rubini remained skeptical that the borough could prove public support "north of 75 percent."
Duffy said Rubini told him sometime after those 30 days elapsed that JL was off the project.
JL Properties got involved in 2003 when it responded to a borough advertisement blitz seeking developers for the ski area project. Ads ran nationwide, even in the Wall Street Journal.
About a quarter of JL's project funding was to come from state and federal grants to the borough. Another $2 million was to come from the sale of about 1,100 acres for residential lots on the south side of Hatcher Pass. JL planned to contribute about $3.25 million.
The $25 million balance was expected to come from Alaska Industrial Development and Export Authority loans and bonds. That financing was not yet secure; JL was awaiting a final agreement with the Mat-Su Borough before pitching the plan.
Its initial $41.25 million proposal included a $3 million retail village near the entrance to Hatcher Pass, nestled along the banks of the Little Susitna River. The 20-acre town square plan was dropped when it became the focus of project critics.
The village wasn't the only fault critics found with the project. Conservationists said development along the upper reaches of the Little Su could harm critical coho and chinook salmon spawning grounds. Septic systems won't work in the fragile soil, they said.
The Mat-Su Planning Commission recently added strict requirements to Hatcher Pass development. The new rules require drinking-water-quality discharge from septic systems and bar all but very minor development, such as trails, within a quarter-mile of the Little Susitna River.
Germer said JL was prepared to deal with those strict rules if public support for the project had been more evident.
"This project would have to be developed under strict design guidelines, sensitive to the area's unique attributes," Germer said. "There's a cost associated with doing that. We were willing to do that -- we felt it was important to do that."
Daily News reporter Rindi White can be reached at rwhite@adn.com or 1-907-352-6709.
