It is near-official: REI to move to Anchorage’s Sears midtown mall

It’s all but official that the big REI recreational retail store in Anchorage’s midtown will relocate from its present space in the Northern Lights Mall to vacant space in the Sears Mall. No lease has yet been signed, officials at both REI and Sears Mall said, but architectural renovation plans were submitted to the Anchorage Municipality in May and some work at Sears Mall has already started. REI would occupy 46,000 square feet of a former Carrs grocery store, now vacant, and an additional 8,000 square feet, according to the plans. Commercial real estate sources say REI needs more space and that street access and parking are problems at the current location. If the move happens it could be a blow to the Northern Lights Mall’s strategy of using REI as an anchor to attract young, affluent customers to attract several small retailers targeting a similar demographic.

 

DESPITE RECESSION, 2017 A GOOD YEAR FOR FIRST NATIONAL: Despite the state’s recession, Anchorage-based First National Bank Alaska had a good 2017, the bank told shareholders in its annual report. Total assets grew by $43.3 million during the year to $3.65 billion; loans increased $137.6 million to $1.82 billion; deposits, including securities sold under agreement to repurchase, increased by $19.24 million to $3.12 billion. Net income was $42.7 million before deductions and adjustments related to tax reform and $36.4 million after those adjustments.

 

PENTAGON BACKS OFF ON BURDENSOME RULE ON 8-a CONTRACTING: Alaska’s congressional delegation persuaded the Pentagon to revise a procurement policy set in 2011 that sharply cut preferential minority contracts between federal agencies and Alaska Native corporations. The revision required approval at the Secretarial level in all armed forces branches for contracts over $20 million. The extra procedure halted most of the contracting to the Alaska corporations, causing them to drop from $2 billion to $211 million in 2013, according to the Government Accountability Office. The delegation, led by Sen. Dan Sullivan, succeeded in getting the extra step removed. This will allow the Alaska corporations to compete once again for negotiated, non-bid federal support contracts without a dollar limit.

 

    The minority contracts are actually competitive in many cases because Alaska Native corporations often compete against each other for contracts, sometimes in consortiums. While there is no open bidding or contract bid-appeal process, the military agency procurement staffs are able to negotiate terms including performance requirements. The procedure is popular with contracting agencies because it gives them more flexibility. The larger Native regional corporations are less active in minority preferences contracting these days, but the business is still important to small village corporations.

 

ANCHORAGE GETS FIRST PRIVATE MIXED-USE HOUSING PROPOSAL: Anchorage has its first application for private mixed-use residential and commercial development, a proposal eventually up to 200 condominiums built over commercial and retail establishments. Local developers JR Wilcox and Michael Bollock have filed plans with the municipality for “Emerald Hills” in the Sand Lake area of west Dimond Blvd. Mayor Ethan Berkowitz is promoting compact mixed-use developments, common in other states, to address Anchorage’s continued housing shortage.

     

     Anchorage already has one mixed-use project built, nonprofit Cook Inlet Housing Authority’s project on Spenard Road with 33 apartments built over commercial space. CIHA plans a similar project downtown. Two other developers, David Irwin and Mark Lewis, are proposing a commercial/residential project, to include a hotel, in downtown Anchorage along with a similar project on Tudor Road. Emerald Hills is picking up some local neighborhood opposition, however. The Sand Lake Community Council has voted against it over traffic and congestion fears.

 

BUYER BACKS OUT ON JUNEAU NUGGET MALL DEAL: A buyer for Juneau’s financially-distressed Nugget Mall withdrew from a proposed $12.5 million purchase when extensive maintenance issues were discovered. Aventina Development Services, of California, was considering the purchase. This leaves the mall with its major creditor, Columbia Pacific Advisors.

 

NICHE CRUISE COMPANY MARKETING EARLY-SEASON TOURISM: “Uncruise Adventures,” a small cruise operator that bills itself as unorthodox, is demonstrating there is a market for early, almost pre-season tour visitors. The company brought visitors up in mid-April this year and will promote April-May again next year with a $750,000 marketing effort. Its business for 2018 so far is up 21 percent over the same period last year and 2017 and the company is estimating another 14 percent growth for the rest of the year, or 21 percent estimated for 2018 over 2017. The company is small, carrying about 7,000 passengers last year, but feels it is positioned to develop a niche market.

 

FAIRBANKS TO TAKE CONTROL OF DERELICT POLARIS BUILDING: The city of Fairbanks is moving to take legal control of the derelict downtown Polaris building, an 11-story structure at 1st and Lacey Streets that has been vacant, and deteriorating, for several years. A developer has been unable to fund building renovation, and $49,000 in back taxes are due the Fairbanks North Star Borough. The city needs to get control, so it can plan for building removal.

 

$66.4 MILLION FAIRBANKS BONDS GO TO VOTERS: Fairbanks North Star Borough will have $66.4 million in local improvement bonds on the October municipal election ballot. School renovations and improvements to a variety of public facilities are planned if the bonds are approved by voters. Bond issues are an important test of voters’ confidence in the economy.

 

MEGA-CRUISE SHIP NOW IN SOUTHEAST WATERS: The huge Norwegian Bliss mega-cruise ship made its first voyage into Southeastern waters in June, stopping in Ketchikan June 4 and again on June 11. Southeast ports are gearing up for the big ships – the Norwegian Bliss will be just one of many – with dock modifications and upland infrastructure improvements underway or planned. The Bliss has 20 decks and carries several thousand people.

 

LEGISLATIVE AUDIT FAULTS REAL ESTATE INVESTMENTS BY MENTAL HEALTH AUTHORITY: A legislative audit of commercial real estate investments made by the Alaska Mental Health Trust Authority found that the authority’s board made the investments improperly and should have deferred to the Alaska Permanent Fund, which by statute handles investments of assets of the trust. In this case some board members with real estate experienced pursued their own strategy of investing outside the statutory guidelines. As it happened the investments were profitable but State Sen. Bert Stedman, R-Sitka, chair of the Legislature’s Budget and Audit Committee said the board’s lack of adherence to legal procedures is grounds for resignations. The legislative committee will prepare a formal response to the audit, with recommendations. The audit report vindicates the position of the trust’s former director, Jeff Jessee, who opposed the real estate deals and resigned over the issue. Jessee is now the Dean of the University of Alaska School of Health.

CORPS OF ENGINEERS. EPA TO MODIFY WETLANDS MITIGATION RULES: A new Memorandum of Understanding on Alaska wetlands impact mitigation has been reached between the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency that appears to give the corps, and project developers, more flexibility in approving offsite compensatory mitigation proposals. We’ll report more on this but the new policy doesn’t change the overall structure of wetlands impact mitigation but it could give the corps authority to approve mitigation through compensation via restoration of streams on public lands damaged by historic mining. An example would be stream restoration in old mining areas on U.S. Bureau of Land Management lands in eastern Alaska, which has been proposed for offsite mitigation but turned down by the corps.