The Alaska Mental Health Trust Authority put the waterfront property known as the subport for sale. (Photo by Adelyn Baxter/KTOO)
A desirable piece of waterfront property in downtown Juneau may have a new private owner, despite the City and Borough of Juneau’s efforts.
If the sale goes through, the city will have to decide whether to work with the new property owner to achieve its long-term goals for waterfront development.
By the time staff from the Alaska Mental Health Trust Authority finished opening the sealed bids Monday morning, a clear winner had emerged: Norwegian Cruise Line, with an offer of $20 million.
That’s considerably more than the City and Borough of Juneau’s bid of $4,250,049. The minimum bid was $3.6 million, which is also the appraised value of the lot.
“I think it’s fair to say that that’s a fairly shocking bid,” said Juneau City Manager Rorie Watt. “I don’t know that I’ve ever seen a property sell for six times the appraised value.”
Watt knew private interests were eyeing the 2.9-acre parcel when the city sent in its bid. But he argued that the subport is one of the last remaining pieces of undeveloped property on Juneau’s waterfront and that it’s crucial to the city’s plans for long-term development.
The trust received five bids. Another would-be developer who came up short was John Binkley. He’s the outgoing president of Cruise Lines International Association Alaska, an industry group representing cruise interests.
Binkley’s family business, Godspeed Inc., bid $12.8 million.
“When you look at the waterfront in Juneau … that’s really critical for the next 50 years of growth in Juneau, and we wanted to be a part of that conversation,” Binkley said.
The Binkley family partially owns flightseeing company Wings Airways, which operates out of downtown Juneau. Binkley said they were hoping to partner with the City and Borough of Juneau if they won the property. He said he was also surprised by the outcome.
Wyn Menefee is the trust’s executive director. After reviewing records, he said Norwegian’s $20 million bid appears to be the highest offer the trust has ever received in a land auction.
The trust received criticism from both the city and local developers as it determined what to do with the property.
“We knew this was a unique and valuable asset, and we’re pleased that the process that we use to determine how to sell this, and when to sell it, is bringing in proceeds that will support the work of the trust today and well into the future,” Menefee said.
Some of the money the trust earns from land sales is invested. The rest is used to fund statewide programs that address things like mental illness and substance abuse.
Norwegian’s bid is still tentative. The Miami-based cruise company has 15 days to put down a deposit and sign a purchase and sale agreement. If for some reason that doesn’t happen, the trust will take the offer of the second-highest bidder: Royal Caribbean Cruises, who bid $13 million.
In a statement, Norwegian said it looks forward to engaging with the city to work on a plan for the land.
Watt said the city may be open to collaboration, but Juneau also has its own plans for how to develop its waterfront.
“Since it’s a cruise ship company, my guess is they have ideas and plans,” Watt said. “Now, whether those mesh with the community’s ideas and plans has yet to be seen.”
The city and the other unsuccessful bidders will be refunded the $100,000 deposits they submitted with their bids.
Editor’s note: KTOO’s building sits on land leased from the Alaska Mental Health Trust Authority. KTOO has also applied for and received occasional grants for special reporting projects from the authority.
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