Developer Marc Marlow's ambitious plan to build a trendy, upscale subdivision on a once-gnarly corner of Government Hill has hit a snag, and the Anchorage Assembly is being asked to spend up to $6.9 million to buy the project out of foreclosure and get the land back.
Marlow, however, says the blame for stopping the Northpointe Bluff project in its tracks is mostly because of decisions city officials made. The foreclosure sale is set for March, and there's still time to work out the problems, he said Monday.
The plan was for Marlow's Jaguar Development Group to get a subdivision ready for development on land once home to the old Hollywood Vista apartment complexes. Those ramshackle, 1950s era buildings fell into disrepair over the years and were torn down about a decade ago after the federal government gave the property to the city. The idea was to redevelop the area as a mixture of attractive new single-family homes and townhouses.
Marlow agreed to buy the land on the bluffs overlooking Ship Creek and downtown Anchorage from the city-owned Anchorage Community Development Authority for $3.5 million in 2007. He paid $525,000 up front and gave the authority a $3 million deed of trust. Marlow then used the land to secure a $4.2 million bank loan to put in subdivision improvements like streets, utilities, lighting and so on.
That work has been done, but only three of about 60 lots have sold, and Marlow's loan from Northrim Bank -- the remainder owed is $3.9 million -- came due in August, according to a development authority memo to Assembly members. The bank foreclosed in December.
To protect the city's interests, the memo says, the development authority needs to be able to bid up to $6.9 million at the March 12 foreclosure sale. That would cover the amount the bank is owed, plus, if there are other bidders, the amount owed to the development authority itself. The city would then have to decide how to proceed with the development.
Most of the Northpointe Bluff property was under a sheet of ice Monday. Marlow says the streets and utility improvements necessary to get lots ready for sale have been put in, and that he's confident he would be able to sell them if it weren't for a lien put on the property by a contractor hired to transport gravel the city wanted to move from the site to the Port of Anchorage.
Marlow says that dispute happened because city officials changed their minds about how much of the gravel should go to the port and how much substandard material should go to a more distant disposal site. He said he and the city couldn't agree who was responsible for the additional contract costs, and the contractor sued Jaguar.
City officials involved in the dust-up weren't immediately available on Monday's holiday.
The Northpointe deal is set for action at tonight's Assembly meeting, but at least two members on Monday said they'll likely argue for postponement.
"I'd like to find out what's going to happen here," said vice chairman Dan Coffey. "With a March foreclosure, there's no big rush on this."
Assemblywoman Sheila Selkregg said she also wants additional information before committing more city money.
"This situation is extremely complex ... layers and layers of businesses and municipal entities, it involves the port, the community economic development authority, a bank, Marlow, a trucking company," Selkregg said. "It's important to have the facts before we vote."
Marlow said he wants to keep the property out of foreclosure. The old Hollywood Vista site still abuts big apartment complexes to the north, but the new Northpointe lots will have great views overlooking the downtown skyline with a Chugach range backdrop, he said.
"This has the most unobstructed southern exposure in the entire municipality," he said.
Contact Don Hunter at dhunter@adn.com or 257-4349.
By DON HUNTER
dhunter@adn.com