An appraiser told Anchorage its lot was worth $3M. The city sold it to the former mayor for $2M.

The Anchorage Community Development Authority is selling its “Sockeye” parking lot to a business led by developers Mark Begich and Sheldon Fisher, who are renovating the hotel on the left of the photo. The buyers were a pair of politically connected developers, who are in the process of renovating a nearby hotel: Mark Begich, a former Anchorage mayor and Democratic U.S. senator, and Sheldon Fisher, a former state revenue commissioner who once ran for U.S. House as a Republican.

“It’s really just kind of a complementary component,” Begich said. “It really is just part of this bigger complex that we’re trying to develop.” Begich’s policymaking experience has given him firsthand knowledge of ACDA’s purpose: As mayor, he led its creation in 2005. The agency, he said, was designed to have flexibility to partner with developers on projects in ways that don’t meet what he described as the “black and white” standards of traditional procurement rules.

The two men also have plans to renovate another building near the hotel into a marketplace with a grocery store, a distillery and residential units. “The idea is to push that back, create some cool landscaping,” he said. “There’ll be some outdoor decking. … It just creates a better environment.” The resolution also said the lot had been “appraised” by the city at about $2.2 million, which wasn’t true. The city “assessed” it at that amount for tax purposes, which was significantly less than the $3.2 million appraisal prepared in 2019 by the real estate firm.

The $2.2 million sale price of the Sockeye lot is probably less than ACDA could have gotten on the open market, said Dan Shantz, an Alaska-based real estate expert who reviewed the 2019 appraisal at the request of APM Reports and Alaska Public Media. “Why have an independent appraisal for $3 million and then turn around and sell it for the assessed valuation?” he wrote in an email.Before the developers bought the property, the authority agreed to rent it to them for a year — at a price well below what the appraisal recommended., by the Anchorage firm Black-Smith, Bethard & Carlson, estimated $258,000 as a fair yearly rental price for the acre of land that the Sockeye lot sits on. But Robbins dismissed that as unrealistic.

The developers say they plan to initiate the long-term lease later this year. At that point, they would pay yearly rent of $42,000, which would rise to $102,000 over the course of a decade — still less than half the fair market rate estimated by the appraisal firm for the smaller Sockeye property.

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