Juneau assembly approves $5.5 million first phase for Telephone Hill site preparation

The Juneau Assembly on Monday approved a city-led Phase 1 plan to prepare the Telephone Hill site for redevelopment, authorizing $5.5 million to pay for demolition, hazardous-materials abatement, partial excavation and replatting so the city can market four developable lots.

City Manager Andrew Kester told the Committee of the Whole that the Telephone Hill place guide — which the assembly selected as concept C — envisions up to 50 new residential units, a 65-foot height limit, improved pedestrian connections and a goal that 20 percent of units be reserved at 80 percent of area median income.

Kester said the parcel conveyed to the city comprises about 2.5 acres of developable land atop Telephone Hill, currently containing roughly 13 housing units across 19 properties. He said the steep slopes and unknown hazardous materials in older structures make demolition and site preparation expensive. Consultants from First 40 Feet estimated a $5 million construction cost; after contingencies and hazardous-materials handling the project estimate grew to about $9 million for full build-out. The assembly opted to fund an initial $5.5 million phase to remove uncertainty and create marketable, buildable lots.

Mayor Weldon moved approval of “scenario number 2,” the $5.5 million Phase 1 funding recommendation; the motion carried, 8-1. The assembly later adopted a separate motion that identifies funding sources: $1.7 million from the Telephone Hill CIP, $2 million from the Peterson Hill CIP, $800,000 from the land fund and $1 million from the general fund to be repaid from land-sale proceeds. The latter funding motion was adopted without a roll-call tally recorded in the transcript.

Assembly members asked how many tenants would be displaced (Kester said between 14 and 16 people), how many developers responded to the request for information (one: Johnson and Carr, with local representation from Northwind Architects), and whether the city should wait until a developer was committed before asking tenants to move. Speakers including Assemblymember Kelly and others expressed concern about asking people to vacate without a firm construction contract; other members said tenants had been warned in prior years and the city must act to unlock downtown redevelopment potential.

Kester outlined several options discussed in the staff memo: (1) replat and market without major city investment; (2) Phase 1 city-led demolition/site-prep and replat ($5.5M); (3) full city-led site and road construction (estimated at up to $9M); and (4) do nothing and continue saving funds for future work. He recommended the Phase 1 approach to reduce uncertainty for private developers.

Assembly questions also covered phasing, road realignment (Dixon Street), hazardous-materials handling and whether the fire department could use scheduled demolitions for training; staff said use for training would depend on hazardous-materials levels and surrounding risks. Kester said the city would serve notice to tenants after ordinance introduction and recommended a move-out date around Oct. 1 to avoid competing with seasonal workers.

The assembly’s action directs staff to prepare the ordinance and budget language that will enable the work if the full assembly adopts the appropriation. Staff said they would not commence demolition or other work without a formal appropriation.

The vote and the funding direction set a clear near-term path to remove uncertainty on the site and ready the property for private development, while leaving final design and developer selection to subsequent procurement steps.

Ending: Staff will return with ordinance text and more detailed funding and schedule information; the assembly set an initial target for tenant notice if the ordinance is introduced.