Borough board upholds assessor, denies Alutiiq Heritage Foundation 2024 property-tax exemption

The Kodiak Island Borough Board of Equalization on July 17, 2025, voted to uphold the borough assessor’s decision and deny the Alutiiq Heritage Foundation’s appeal for a 100% property-tax exemption for tax year 2024 on the building at 215 Mission Road. The board voted 4–3 to uphold the assessor’s determination; the mayor cast the tie-breaking vote in favor of upholding the assessor.

The decision rejects the foundation’s request for a full exemption on a 15,169-square-foot building that was under renovation as of the assessment date, Jan. 1, 2024. The ruling preserves the assessor’s apportionment of areas the assessor found were not exclusively used for charitable purposes on the assessment date.

The board heard two hours of testimony and documentary evidence from the Alutiiq Heritage Foundation and the assessor’s office. The foundation argued it had taken exclusive occupancy in March 2023, that construction beginning in November 2023 did not defeat a preexisting charitable use, and that the museum’s gift shop and retail functions are integrated with and support its mission. The foundation presented two additional letters and documentary exhibits to the board; the board unanimously voted to accept those letters into the record before testimony began.

The assessor’s presentation emphasized three factual points the assessor said required apportionment: (1) a roughly 925-square-foot basement area formerly leased to Natives of Kodiak that went directly into demolition and had not been placed into charitable use before renovation; (2) a contractor work area on the second floor (identified by assessing as about 1,184 square feet) that Cornerstone General Contractors used as temporary office space during construction; and (3) a retail/gift-shop area that assessing treated as nonexempt (the assessor’s materials identified 365 square feet as nonexempt and referenced plans showing roughly 384 square feet when combined with a manager’s office). The assessor argued the relevant legal standard examines actual use on the assessment date and that apportionment is required when portions of a property were used for nonexempt purposes or were not shown to be exclusively charitable before renovation.

Appellant representatives told the board the museum intended the entire building for charitable museum purposes before construction started, that construction was staged and began with demolition of the basement, and that the retail space is mission-related and has not generated net profit for the museum. Dr. April Counselor (appellant representative) testified that Cornerstone’s use of a small portion of second-floor offices was part of the renovation process and not a separate, commercial lease, and that the museum’s retail operation supports its mission.

Board members debated legal precedent and the distinction between intent and actual use on the Jan. 1 assessment date. Some members argued that Alaska case law and local practice require a narrow construction of exemption statutes that focuses on actual use at the assessment date; others said the museum’s ownership, planning documents and intent supported treating the property as exempt because no intervening, unrelated commercial tenant occupied the disputed spaces.

After deliberation the board rejected an amendment to grant a 100% exemption for 2024 (the amendment failed by a 4–3 vote) and then approved a motion to uphold the assessor’s determination by a 4–3 vote (the chair’s tie-breaking vote produced the majority). The board subsequently adopted written findings of fact that mirror the assessor’s stated reasons (the findings identify the basement, contractor office space, and retail area as the three distinct disputed areas).

The board clerk and borough attorney confirmed the board’s written decision will be mailed; the appellant has 30 days from distribution of the written decision to appeal to the Alaska Superior Court. The borough attorney advised board members to avoid ex parte communications about the merits of the matter while the appeal period remains open.

The board’s action preserves the assessor’s apportionment for tax year 2024; future exemption applications for subsequent years were noted to be outside the scope of this appeal and will be considered separately if and when filed.