Hope land sale on track: Borough sorting out high bidders

Posted: Sunday, February 27, 2011

It's been a little more than a month since the bid deadline for the Kenai Peninsula Borough's Hope land sale and residents of the small hamlet off the Seward Highway are still waiting to hear about the town's newest landowners.

"Are they from Anchorage? Are they from Seward or Kenai? Or are they out of state, out of country?" asked Jim Skogstad, who's on the borough's Hope-Sunrise Advisory Planning Commission. "There were people interested from France, from Switzerland, a lot of different foreign countries. It'd be interesting if any followed up and were successful or not."

Four years ago Hope community members asked the borough assembly to sell some parcels of land off cheaply in an effort to attract young families with children to the town.

Hope has struggled with trying to keep its school enrollment at 10 students, the minimum required by the state for funding, and community members thought attracting more families could save the town's public education system.

The assembly agreed and after several years of work, 22 parcels of land went up for auction last fall, with minimum bids set at about $25,000 per acre. The minimum bid amount on the lots was set at 70 percent of the appraised value, according to the borough ordinance authorizing the sale.

According to Marcus Mueller of the borough's land management department, all parcels of available land received sealed bids.

After the close of the bid acceptance period last month, the borough started sorting through the high bidders. In some instances, an individual was the high bidder on multiple parcels, Mueller said.

"I've talked with various people who were awarded," Skogstad said.

He said one person he spoke with had said they spoke with another individual "who submitted nine bids and was the high bidder on all nine of them."

Because of Hope's community development objectives, the terms of the sale only allowed one parcel to be sold per person.

"The local interest was to attract as many people as possible," Mueller explained. "Their interest was in avoiding the situation in where a single part came in to take over the project."

The borough is going through several rounds of notifying high bidders in order for them to choose the parcel they want the most and relinquish the others, and then going back to notify the next highest bidder on those parcels.

"We've had two rounds of notifying high bidders," Mueller said. "We are working on now processing purchase agreements for two rounds."

The borough has never conducted a land sale like this before, he said.

"We are kind of encountering something we haven't encountered before because of the nature of the sale," Mueller said.

A sealed bid auction keeps all information confidential until the sales are final.

This is something borough assemblyman Bill Smith, of Homer, is not too happy about.

"To me they just got too bureaucratic about the process," Smith said. "I just don't think that's fair for the people who bid on the lots. A lot of people have no chance of getting a lot and they're just sitting there not knowing anything. I just don't think it's a very friendly process."

According to Smith, the borough wanted to keep the bid information private in an effort to control gamesmanship for families that were trying to buy multiple lots.

"That takes a real peculiar circumstance," he said. "I just thought it was pretty far out there that it would occur."

But Smith still thinks the information on the highest bidders should be made known now so people have an idea where they stand and so others can begin the building process.

"It occurred to me we're selling these parcels in the public interest to try and get people in there. We just want to get people in there," he said. "Hopefully people will be building houses there and having kids there. That's the big objective. Everybody had that bottom line in mind."

And while that might have been the bottom line several years ago Skogstad said the idea that the land sale would save the school changed over the course of the process.

"Do I see full time residents or people moving here permanently into those subdivisions? Not really. Not immediately," he said.

Skogstad said that ideally the lots that are sold will be developed over time.

"I think the worst that could happen is to all of a sudden be flooded with activity in those two subdivisions as far as to see five or six cabins built this summer. I think that wouldn't be good for the community," he said. "If we go with a slower approach there are enough builders and contractors here in Hope that can do the work."

And that work would be good for Hope's economy, which has always one of the reasons for the town's fluctuating population.

"There's a lot of people that just have to figure out how to make it work living here," he said. "Opening up more land is not going to keep the school open."

He said the Hope-Sunrise Advisory Planning Commission has brainstormed a number of ways to inject life into the community, such as low-income housing or even an orphanage.

"But the bottom line is that I think we just resigned ourselves to the fact that the best approach is to just let it be," he said. "If it's going to happen, it's going to happen and why try to inject something that might have negative effects down the road?"

The approach the community hasn't given up on, he said, is trying to attract small business like a coffee shop that could employ a few employees year-round.

"It's really a matter of trying to find the right business and entice them into moving here. That's what's going to try and keep the community the way it is," Skogstad said.

Mueller said the bulk of the sales will be closed this May and at that point the information on land sale and buyers will be made public.

Brielle Schaeffer can be reached at brielle.schaeffer@peninsulaclarion.com.

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