Alaska Ocean Center loses out to state parking lot

Conceptual plans for a future “Juneau Marina District” would include a yacht marina, berth for small cruise ships and the Alaska Ocean Center on land that includes a 2.8-acre parcel owned by the Alaska Mental Health Trust. (Courtesy of MRV Architects)

Developers behind the proposed Alaska Ocean Center say their project is likely dead in the water.

The Alaska Mental Health Trust Land Office agents have decided to lease the waterfront parcel the developers were interested in for a parking lot.

The Alaska Ocean Center is a proposed marine science visitor attraction and research facility on the waterfront.

The key to the project is a 2.8-acre parcel owned by the Alaska Mental Health Trust. The land was the site of a homeless encampment last summer until the Trust Authority served trespassing notices and cleared the land.

Juneau developer Doug Trucano offered $3.24 million after the Trust Land Office put the parcel up for sale in 2016. He proposed partnering with the Alaska Ocean Center and sharing space.

One of the organizers behind the ocean center, Bob Janes and his business partner thought they had a deal – up until Jan. 31.

That’s the date the state Department of Administration awarded the Trust Land Office a tender to convert the vacant parcel into 102 parking spaces for state workers.

“This came right out of the blue without any indication that it was going to come at all,” Janes said Thursday. “We were ready to sit down and complete the deal with them at that point in time.”

Juneau City Manager Rorie Watt said the Trust Land Office’s decision to go with a parking lot is confounding.

“We’re really disappointed, we sent a resolution encouraging them to proceed with the sale of the property,” Watt said. “We think it’s in their economic best interests and the money they would get from a parking lot is substantially less than what they would get from sale of the property.”

How much less? The ocean center’s board asked analysts at the McDowell Group to answer that question.

The firm did the work gratis and its findings were clear: investing the $3.24 million from the sale over 20 years would have a far greater return than the approximately $83,000 a year the state will pay to lease the land for parking.

“The Trust could realize about twice as much income from sale of the property as they could from leasing the property for parking,” analyst Jim Calvin said.

(Photo by Rashah McChesney/Alaska's Energy Desk)
Waterfront land owned by the Alaska Mental Health Trust Land Office seen here on Nov. 8 would be key to Trucano Construction’s plans for a new yacht marina and berth. (Photo by Rashah McChesney/Alaska’s Energy Desk)

The Trust Land Office doesn’t see it that way.

Leasing the parcel is a short-term arrangement that doesn’t preclude future deals, Executive Director Wyn Menefee said.

“We are not comparing this short-term lease with those other offers,” Menefee said. “That’s not a comparison we’re making, because we see this as short-term, the other ones are long term. And so this does not discount our consideration of other offers.”

But there’s a question of whether the ocean center and its partners can wait at least another two years.

“If this lease occurs, the ocean center project will probably die on the vine,” Janes said. “Doug Trucano, who is putting in the small cruise ship and visiting yacht harbor, will pull out and move to other projects in other places. This is going to be a big loss for Juneau in many ways.”

In recent years, the Alaska Mental Health Trust Authority has undergone turnover in staff and leadership as it undergoes a legislative audit examining its business and investment decisions.

Correction: An earlier version of the story misidentified the proposed marine center attraction. It’s to be the Alaska Ocean Center, not the Juneau Ocean Center.

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.

Jacob Resneck, CoastAlaska

Jacob Resneck is CoastAlaska's regional news director based in Juneau. CoastAlaska is our partner in Southeast Alaska. KTOO collaborates with partners across the state to cover important news and to share stories with our audiences.

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