Stalled tax abatement program in Fairview may see revitalization

This article is part of a collection of student stories focusing on the Fairview neighborhood in Anchorage, Alaska. Completed for Julia O’Malley’s journalism course at the University of Alaska Anchorage. A full map of articles can be seen here.

DSC_0101A tax abatement program for a swath of Fairview and downtown may soon be revitalized over a year since its passage by the Anchorage Assembly with a new mayoral administration apparently keen to see the program go active.

“The new [Ethan Berkowitz] administration seems more interested so I’m hopeful we’ll see some progress shortly,” said Patrick Flynn, Anchorage Assembly member. Pending an application and evaluation process the program is still on-hold until handled by the mayor’s office. Then developers can apply.

The abatement, in-theory, works within a 65-block zone of Fairview and downtown by dubbing parcels “Deteriorated Property.” Taxes can be written off for property upgrades or “extensions of public infrastructure” on commercial projects occurring in this zone through January 1, 2023 until property taxes are paid off at which point the full amount of taxes is due.

“Public infrastructures costs would include roads, water and sewer lines, electric lines and landscaping amenities public rights of way. Developers would institute separate accounting procedures for public infrastructure projects and be subject to inspection by MOA [Municipality of Anchorage],” according to a slide describing the project. Fairview Business Association advocate, Paul Fuhs, says this could soon come to ahead.

“I think it’s probably going to be in about a month,” said Fuhs in early November regarding when he thinks the program will go in-effect.  “The thing we’ve committed to is that we’re going to have a big public meeting at that time.” After the proposal passed the assembly, a regulations and application process were next up before the program can go active; a step ignored by former Mayor Dan Sullivan’s administration, advocates claim.

“The Sullivan administration really didn’t really support it, they just stonewalled us on the regulations,” said Fuhs. Flynn echoes this remark.

“…the previous administration didn’t believe in it and never took the steps to execute the ordinance,” said Flynn. However, the support is there.

“Oh yeah, we’ve got quite a few [developers interested]. They just want to see what the deal is and they can work it into their economic model,” Fuhs explains. The model initially occurred in Tacoma, Washington as a multi-family tax exemption in zones of the city which Fuhs drew inspiration from for a tax abatement program in Dutch Harbor during his tenure as mayor.  The program in Tacoma has 17 areas designated for the abatement with a typical exemption period of eight years.

Rep. Flynn took a hold of the concept citing a need for development and housing in Fairview and sponsored the measure that passed in July, 2014. The selection of Fairview is strategic.

Fairview-Tax-Abatement-Area

“The entire zone was selected precisely because it has good potential given its proximity to downtown and major transportation corridors – it is the natural location for eastward growth of downtown,” he said. “Many of the properties are well-suited to mixed use development (commercial on the ground/lower floors, housing above).”

He hopes the measure will have affects expanding past just development he describes as “ripe” in the abatement zone.

“Anchorage is in desperate need of more work-force housing and this is one of the tools I hope can be employed to achieve that,” he explains. He adds the potential infrastructure upgrades as adding value to the community, and sees potential in expanding the program to other Anchorage boroughs.

“Finally, if it works in Fairview the concept can be extended to other older/transitional neighborhoods.” In an April Q&A for Alaska Dispatch News, Mayor Ethan Berkowitz agreed stating, “Fairview’s pilot tax abatement policy could be scaled citywide.”

In August, Berkowitz is noted as saying his administration is working on regulations to start the abatement program, according to Fairview Community Council minutes (PDF).

Multiple requests for comment to the mayor’s office have not been returned at the time of publishing.

While the program is still on-hold, Flynn offers some suggestions for residents hoping to see the program take off sooner rather than later.

bb21eb2a-89d4-4323-a0ec-7f20fbb897f9“First, keep reminding the administration of their interest in moving forward,” he said. “Second, seek out developers and development opportunities who might want to utilize the program.” The program may also solve a more practical challenge for developers.

Flynn explains:

“Anchorage’s other tax abatement program is by definition special interest driven wherein a developer gains control over property, convinces the Assembly to make a deteriorated property finding and then negotiates the tax abatement/deferment package.” The Fairview program will allow this process to be streamlined for a wide area of the neighborhood.

“My legislation was more egalitarian – if you own property in the designated area you qualify,” said Flynn. Other developer saving options will also open up for those looking to build.

Developers will be able to claim abatements on construction including affordable housing, as well as developing on a “legacy environmental site,” said Fuhs. “Remediating some of the contaminated sites is part of it.” Fuhs cites locations such as old gas stations and dry cleaners that may have disposed chemicals on their property. And while the Fairview Tax Abatement proposal has garnered interest from politicians and developers alike; concrete plans to put the program in action are missing at this point.

Sebastian Garrett-Singh is a freelance journalist in Anchorage, and former reporter for Capitol Hill Seattle Blog.  He can be reached by phone at: (907)-406-4456 or by email at Sgarre03 (@) gmail (dot) com.

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