Kenai Peninsula Borough considers $1.2 million purchase of 80 acres in Seward to study road access to Blueberry Hill

The Kenai Peninsula Borough finance committee on Tuesday held a public hearing on Ordinance 2024-19-24, which would authorize the borough to acquire 80 acres in the Blueberry Hill area of Seward for $1,200,000 and to enter a memorandum of agreement with the Alaska Mental Health Trust Authority to share costs for a road-access feasibility study. The purchase, the ordinance says, would be funded from the Land Trust Investment Fund and due diligence/feasibility expenses from the Land Trust Fund, and would be contingent on a successful feasibility study covering the subject parcel and adjacent borough and trust lands.

Land management staff member Aaron Hughes told the committee the study would evaluate potential road access to the top of Blueberry Hill and to adjacent borough lands, and that if successful the acquisition could provide vehicular access to about 2,300 acres of contiguous borough-owned land. Hughes said the parcel’s proposed classification is “rural,” consistent with surrounding unclassified borough lands, and that there are no immediate plans to subdivide the property; any future development would go through public processes involving the city and other stakeholders. The planning commission unanimously recommended approval at its Jan. 27 meeting, Hughes said, and the packet includes a letter of support from the City of Seward.

The proposed transaction includes an offer negotiated from an earlier asking price of $1.4 million down to $1.2 million, Hughes said. He also said the Alaska Mental Health Trust Authority has agreed to share study costs; committee members referred during discussion to a $25,000 contribution toward the road-access feasibility study from the trust authority. Hughes said the Land Trust Investment Fund (LTIF) permits using up to 10% of the fund balance annually to acquire non–income-producing assets such as land, and that proposed purchase funding would come from that mechanism, with due diligence costs from the Land Trust Fund.

Public commenters and several assembly members raised concerns about access and site constraints. Speakers noted proximity of railroad tracks to the highway, the condition of a nearby bridge, narrow roads, flooding of Queijack Creek, bedrock and steep slopes on parts of the parcel, and potential tsunami and regulatory floodway constraints shown on maps provided to the committee. One commenter said that only about 9 acres of the 80 might be suitable for a typical house site and that larger portions have significant bedrock and limited buildable area; another said the estimated cost to build a road up the hill could be high relative to the value of buildable lots.

Mayor Michicky told the committee addressing Seward-area housing shortages — including lack of rental housing and difficulty retaining employees for local employers — has been a high priority of his administration. He said moving development out of flood and tsunami zones is important for the community’s resilience, that the borough has evaluated multiple properties for suitability and cost, and that this parcel, combined with adjacent borough and Alaska Mental Health Trust lands, may present the most feasible option for higher, safer development options in the Seward area. The mayor said any sale of borough parcels for housing would be phased and not placed on the market all at once.

Hughes confirmed the study requested by the ordinance would be limited to road-access feasibility and would not include detailed road design or a comprehensive cost estimate unless the committee directed staff to add those elements. The ordinance text makes the acquisition explicitly contingent on “the successful completion of the feasibility study.”

No final vote on Ordinance 2024-19-24 was recorded at the committee meeting; the item remained at the hearing stage pending the study and any further public input or assembly action.

Next steps: if the assembly later approves purchase authorizing language and the feasibility study shows viable access, the borough would move forward under the LTIF appropriation and follow up publicly on classification, potential surplus determinations and any future sale or subdivision steps.