Alaska Mental Health’s Trust Land Office is hoping to sell 100 lots in a subdivision south of Petersburg. But last fall, the Petersburg Borough Assembly voted unanimously to reject the design of the subdivision, saying it would create confusion, ill will, and expense to the borough. During a work session on March 4, assembly members and Trust Land Office officials tried to find a way to move forward with the proposed subdivision. But as KFSK’s Hannah Flor reports, the meeting ended without any formal agreements.
Like many places in Alaska, there’s a housing shortage in Petersburg. During last week’s work session, assembly members and borough officials emphasized that while the assembly rejected the design for the proposed 500-acre subdivision between Papke’s Landing and Blind River Rapids, they are interested in developing it, to open up much needed housing options. Mark Jensen is Petersburg’s Mayor.
“It’d be great to get that developed, to get more lots available for development in the Petersburg Borough,” he said.
The problem is, the proposed subdivision is outside of Petersburg’s only service area. That means the design, or platt, of the subdivision isn’t subject to Petersburg Borough code. Instead, it only has to meet minimal state regulations. It’s that lack of regulation that has assembly members worried.
The state asks mayors to sign off on proposed projects within a Borough. But Jensen hasn’t done that after the assembly asked him not to. However, that rejection isn’t typical. Now officials with the state, Trust Land Office, and Petersburg Borough are unsure about who has the right to do what.
Assembly members told the Trust Land Office that the proposed design would unreasonably burden the Borough in the future. They reiterated some of those concerns at the work session last week.
Assembly member Scott Newman said that as a commercial pilot, he sees the results of bad planning all around Southeast Alaska.
“You can fly over and you can look down and see, somebody had an idea,” he said. “Somebody got online, and they go, ‘Wow, I’m gonna buy this piece of property.’ And the disparity between the dream and the reality of building, it can be pretty, pretty wide. And sometimes you see where people started something, they just didn’t finish it. And that’s what we don’t want to see. We don’t want to see a bunch of people’s failed attempts at their Alaskan dream.”
The Trust Land Office plans to sell the roughly 100 parcels as-is, without roads or utility access. The borough’s community and economic development director, Liz Cabrera, said that road construction is too expensive for many buyers.
“The cost that they have to put in to develop the road, you know, they’re no longer gonna be able to build a house or a pad or anything else,” she said.
And, she said, they’re often frustrated by the idea that if they do put in a road, the expense of construction won’t be shared by their future neighbors.
“Everybody else that comes behind them, is basically gonna get a free ride on that road. And that’s for most people, not a winning proposition,” she said.
But Borough Manager Steve Geisbrecht told KFSK that the road would private – it’s not Borough-owned – so the builders don’t actually even have to share it. And if they don’t want to share it, the only way a new property owner along that road can force them to, is to sue them.
Geisbrecht told Trust Land Office officials that when people do buy those lots, they often don’t realize that they won’t be getting Borough services like local policing or utilities. Sometimes they don’t even realize the lot doesn’t have road access.
“And then they come to the Borough and say, you need to fix this,” he said. “And it’s really hard to fix a subdivision after the fact.”
He said it also poses an issue with emergency services. Roads that are built, don’t have to be built to Borough standard. Geisbrecht said that means sometimes the roads can’t handle the size of fire and EMS trucks, which then puts residents in need of rescue at risk.
He said there are other possible problems if the infrastructure is not planned out – there’s the potential for issues with sewage leaking into downstream properties. Most privately owned property in the area is waterfront, at lower elevation than the proposed subdivision.
“Folks who live out there who are not on Borough water – which is literally everybody out there – have to collect their water from someplace,” he said. “The last thing you want is that water supply to be, you know, polluted with, you know, people’s waste stream.”
Chandler Long was one of a handful of Trust Land Office and state officials addressing the Petersburg assembly. She said whoever buys the property would have to follow Department of Environmental Conservation, or DEC, septic regulations.
“There are certain requirements DEC has from wastewater systems. It has to be so far from a moving stream.”
But Geisbrecht told KFSK that since there are no DEC representatives in Petersburg, the state often calls Borough officials to look into problems. And those Borough officials can’t enforce outside of Service Area 1.
Geisbrecht told the Trust Land Office officials that when they sell undeveloped land, the Borough is forced to try to fix problems after the fact.
“What’s going on is, you build these subdivisions,” he said. “Clearly, your focus is not on your buyer, it’s on selling them for your for the profit of the Trust. I get that. We have to service it on the back end. And there’s costs associated with that.”
The purpose of the Alaska Mental Health Trust Authority is to improve the lives of Alaskans with mental health issues. It holds nearly one million acres of land in Alaska, given to the trust by the state. It sells that land to make money for advocacy and grantmaking. The Trust Land Office manages land sales for the Alaska Mental Health Trust Authority. The Office is legally required to maximize its profits.
Scott Newman was one of several Assembly members and Borough officials who said that the land would be worth more if roads were put in, because the roads would make it possible for buyers to build on the mostly land-locked parcels, to connect to Borough utilities, and to install septic systems.
“I would maintain that the maximum benefit could potentially include developing it to the point where you could receive the maximum benefit,” he said. “Because access is everything, a lot of these lots here are so far in that an individual person is not gonna be able to access it.”
But the Trust Land Office has limited interest in how parcels are developed. Chandler Long told assembly members that the legal requirement to maximize profits is part of the reason the Office, or TLO, can’t act as a developer of subdivisions.
“Your request to build roads is tough, because we must maximize revenue generation, right? Legally, we must do that. And so the TLO can’t actually take an action to invest in building a road, it’s not a requirement if that return on investment isn’t guaranteed to be greater than just selling them as is,” she said.
Long told assembly members that the state doesn’t require roads in subdivision planning.
“The public access and utility easements are not required to be built by the state of Alaska platting,” she said. “And the plat as-is does conform to all legal requirements.”
Petersburg Assembly members and Borough officials expressed interest in creative solutions. One proposed solution would involve the Trust Land Office building the roads, with an agreement from the Petersburg Borough to funnel all property taxes from the subdivision to the Trust until the road development is paid for. There was also interest in the idea of a test case – building a small subdivision with developed roads to test the theory that lots with road access would sell for significantly more.
Geisbrecht told KFSK that while legally the state and Trust Land Office can probably go ahead with the subdivision without the Mayor’s signature, he hopes officials will be willing to work with the borough.
“If DNR wants to proceed with that development, with the current rules they have in place, there’s probably not a whole lot the borough can do unless the borough takes on planning authority,” he said.
After the work session, a state official gave Geisbrecht a letter detailing state requirements for subdivision design. The letter reiterated that the proposed subdivision meets those requirements, and stated that if the Borough decides to regulate platting outside of Service Area 1, it will then be able to make decisions about the design of the subdivision.
The visiting state and Trust Land Office officials did not commit to any specific action but agreed to keep communication open with Borough officials and assembly members.
