Assembly, in pair of 5-4 votes, rejects new plan for Telephone Hill and stalls demolition schedule
- Mark Sabbatini
- 26 minutes ago
- 6 min read
Majority spurns proposal to divide neighborhood into three lots; members also worry delays and controversy will make companies reluctant to bid on high-density housing project
By Mark Sabbatini
Juneau Independent
The Juneau Assembly opted for a modest, rather than drastic, pivot on the future of Telephone Hill by voting 5-4 Monday night to stall the demolition process for the neighborhood until companies interested in redeveloping the area for high-density housing are given a chance to present their qualifications.
The vote means the next major steps in the process may not occur until October, when City Manager Katie Koester said the results of any developer submissions are expected to be known. Plans could also be affected if a civil lawsuit against the city challenging the redevelopment goes to trial or is otherwise resolved this summer.
However, the narrowly divided vote means the city is still proceeding tentatively toward a plan that envisions mid-rise apartments with up to 155 total units in place of the current homes. City leaders have for months grappled with a dilemma: Is demolition necessary first to get redevelopment companies to bid, or is seeking redevelopment bids first necessary to ensure demolition doesn’t occur if no bids are received?
Abandoning that redevelopment plan altogether was proposed Monday by Mayor Beth Weldon, who suggested dividing the downtown neighborhood into three lots offered in sealed-bid auctions. That option, which potentially would leave nearly all the existing homes intact, failed by a 5-4 vote.
People seeking to preserve some or all of the existing neighborhood called the Assembly’s decision to stall demolition a win, if not necessarily to the extent the mayor’s proposal would have provided. Demolition had been scheduled for completion by July 31 under a bid process that started April 4, but is now being canceled.
"I think this is a very positive move because it changes the dynamic from them making a decision prematurely that could damage a good decision in the end," said Catherine Fritz, a former city architect, in an interview Tuesday. "In other words, by holding off on demolition they're going to be able to look at more options for redeveloping the hill that may or may not include the existing houses. But at least there is a chance for developers to say there is value in that neighborhood that exists there and they want to hold on to that, and they want to make a development proposal that includes that."
Concern about Monday’s close votes and the resulting further delay in deciding Telephone Hill’s fate was expressed by some Assembly members who said the ongoing uncertainty and controversy about redeveloping the downtown neighborhood will make companies reluctant to bid for the work.
"I feel confident that we're going to move this project forward more quickly if we move forward in the strategic way that we planned originally, which was take the uncertainty out of this project for the developers, make sure they know we are serious about doing this, and that we're willing to do the hard steps," Assembly Member Christine Woll said.
The original timeline for the project under a plan approved by the Assembly last June called for the demolition process to start shortly after people renting the 13 existing residences on Telephone Hill were evicted on Oct 1. However, legal issues delayed the evictions, with the final one occurring Feb. 28.
City leaders were prepared to move ahead on demolition this spring despite the pending civil trial, which claims residents were improperly evicted and the city is using an illegal development process. But Koester said Monday the case may go to trial this summer, potentially affecting options available to the Assembly this fall.
One result of Monday’s meetings is the city won’t be spending the vast majority of $5.5 million approved by the Assembly for the first phase of demolition and site prep during the coming months. Halting further city spending on Telephone Hill was a primary goal of Weldon’s proposal, which she said was motivated by extensive public comments during the past several months about those costs.
"My main reason for doing this is just the public outcry not to spend any more money on Telephone Hill," she said. "I want to make it quite clear that I'm not doing anything with the houses. That is not my intent, to save the houses. My intent is to get this off our plate."
The failed proposal called for auctioning one lot at the top of the hill — where a parking lot and one of the neighborhood’s seven residential structures are located — to a developer who would build 20 to 30 units of housing. Weldon said that would achieve part of the original plan’s goal to provide more downtown housing to address the city’s ongoing shortage, with demand expected to grow during the coming year when a U.S. Coast Guard icebreaker with up to 190 personnel is stationed here.
The rest of Telephone Hill would have been auctioned off in two lots with no specific conditions, meaning the buyer could keep the existing homes in place or redevelop the properties.
Strong opposition to Weldon’s plan was expressed by Assembly Member Alicia Hughes-Skandijs, who said a major shift in direction would discard the extensive assessments and public input that have occurred since the city took over the Telephone Hill property from the state in 2022. She said that was a comprehensive and communitywide effort that resulted in the plan for the midrise apartments, with nearly all of the input since it was approved last year coming from a group of people opposing the project.
"They have been very organized and very committed to this issue at every chance to be at public testimony," she said. "And my concern is that we have heard the same message from them over and over, almost to the extent that we have forgotten about all of the work that we have done ourselves. So from where I sit to say that this is responsive to the community, I would say it is not. I would say it was responsive to a very organized group of people who have been organized against this plan from the beginning."
Weldon noted there is increasing criticism communitywide about spending and that only 23% of respondents in a recent budget survey said they favor the city spending money on housing development.
Assembly Members Nano Brooks, Maureen Hall and Paul Kelly joined Weldon in voting for the proposal. Voting against it were Hughes-Skandijs, Woll, Ella Adkison, Neil Steininger and Greg Smith.
It’s possible a variation of Weldon’s plan could resurface in some form. Steininger said he was "going back and forth on this all day" before the vote.
"I don't dislike this plan," he said. "I think, when I look at it, this very well could be the most viable way that we go. I just think that we're still working towards information on what a cohesive look for this area could be…I don't necessarily think we should demolish all the homes, as we're still working on that as well. So I think there's a middle-of-the-road option here that we can see a better vision of what this area can look like. So maybe at some time in the future I can support this idea. I just don't think I can today."
After Weldon’s proposal failed, Smith offered the proposal to delay selecting a company to perform demolition work until the results of a separate request for qualifications (RFQ) — which essentially will gauge the ability and interest of companies to redevelop the neighborhood — are known.
"I think this is just a slight change in the project," he said. "I don't think of it as a stop or anything like that."
Hughes-Skandijs disagreed, saying she believed asking companies for RFQs without the certainty of knowing demolition is occurring set the request process up for failure.
"Investors and developers don't like that uncertainty," she said.
Koester, who said she’s had numerous conversations with developers about what will spur their interest in Telephone Hill, told Assembly members a key element is a strong sense of direction and commitment by city leaders to a definitive plan.
"I will tell you that my job gets harder the closer to 5-4 you get on your decisions," she told the Assembly.
A 5-4 vote is what occurred on Smith’s motion, which also included a directive "to support the manager prioritizing efforts to solicit and encourage responses to the RFQ."
"If we can show that we support her going to get good responses to the RFQ I think that would be a good sign," he said.
Kelly, Steininger, Hall and Brooks joined Smith in approving the motion. Woll, Adkison, Hughes-Skandijs and Weldon voted in opposition.
"Sorry, madame manager, " Weldon told Koester after the vote.
Support for the delay was offered after Monday’s meeting by Mary Alice McKeen, an attorney who represented occupants at one Telephone Hill residence in an eviction case earlier this year. She said while she is interested in preserving the neighborhood’s historical structures, if the focus of city leaders is on finances then they should see developer estimates of what she believes could be a "staggering cost" to fully rebuild the area.
"The problem is how much it will cost when they do it — and if they can't afford it it's worth the wait," she said. "If this time allows them to figure out that they can't afford the 155-unit project then that is time well taken."
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
