Economic Assessment of an Application for Tax Abatement and Development of a New Health and Human Services Building

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On June 20, 2016 the Municipality of Anchorage (Municipality) put out a request for proposals (RFP) for a fee-simple acquisition of a facility that meets the needs of the Municipality of Anchorage Department of Health and Human Services (DHHS) and the redevelopment of the 825 L Street lot that the DHHS facility currently occupies. In lieu of paying outright for a new DHHS facility, the Municipality issued an RFP proposing a land trade using properties owned by the municipal land bank. Irwin Development Group and Alaska Pacific Development partnered to create DHHS 1, LLC. (the Applicant) and proposed a development plan for a new DHHS building, a new downtown senior center, and the redevelopment of the Anchorage School District (ASD) bus facility currently located at Tudor and Elmore Road. The application outlines development plans for a new DHHS facility and mixed use development on the Tudor and Elmore site as well as a senior center on the 825 L Street lot. The proposal presents a “deal” between the Applicant and the Municipality, in which the Applicant will pay for and construct a new DHHS facility and redevelop the ASD bus facility at an alternative location, in exchange for the deed to the existing DHHS facility, 16 acres at Tudor and Elmore where the bus facility is currently located, various site and traffic improvements, and five years of property tax abatement.

The Municipality contracted with Northern Economics, Inc. to evaluate the Applicant’s request for property tax abatement with respect to financial feasibility, creation of employment, economic impacts, public benefits, and economic development, specifically with respect to the requirements of Anchorage Municipal Code (AMC) 12.35.010D. The following report summarizes the key findings for a more comprehensive document that is available upon request from the Municipality.

This analysis assesses the Deal as described in the application received on June 14, 2017 and amended on Sept 28, 2017.