By SHANNON HAUGLAND
Sentinel Staff Writer
Sitka Community Land Trust received three pieces of good news recently that will allow the non-profit to move ahead with its goal of providing affordable homes for first-time home buyers, project manager Randy Hughey said today.
The trust’s project, Halibut Point Cottages, is a seven-unit neighborhood that will consist of one-, two- and three-bedroom homes on the old city shops property at 1306 Halibut Point Road.
Unexpected expenses stalled the project 20 months ago when contractors installing utilities found soil contaminated from the many decades the site was used for industrial shops and a diesel power plant. The 106 cubic yards of soil had to be removed, treated, replaced and then covered, at a cost of about $80,000.
After the cleanup the state Department of Environmental Conservation notified the land trust on Dec. 27 that the property was not a threat to human health, and no further remediation would be required, Hughey said.
An architectural rendering shows a 2-bedroom house designed for the Sitka Community Land Trust Halibut Point Road property. (Image provided)
The trust sent DEC’s findings to First Bank and Rural Development, asking whether the two institutions would approve construction financing and mortgages on the site, and both said yes earlier this month, Hughey said.
Though he had expected the DEC response, Hughey said he was “enormously relieved” when it came through.
“We’ve worked so long and hard on this. It’s been a difficult set of circumstances for the organization and for myself personally,” he said.
SCLT Board President Doug Osborne agreed that it has been a difficult process.
“It’s been a long road of challenges, but that just makes it that much sweeter getting to this point,” he said. “Now it’s getting exciting.”
The former city shops property was dedicated for affordable housing in a city voter referendum in 2006. The community land trust was formed as a nonprofit that same year, and has been working since then to create affordable housing on the parcels and elsewhere in town.
The organization approached the Assembly with a request for financial help on the soil cleanup, since it existed at the time it was turned over to the trust. But a majority of Assembly members felt the city had provided enough help through the conveyance of the land, and that the CLT had accepted responsibility for the site, including cleanup costs, if needed.
The organization raised the money for the soil cleanup by selling a parcel of the land to the neighboring veterinary practice.
“The important thing is none of these costs are passed on to the home buyers,” Hughey said. “We decided we weren’t going to do that.”
Hughey said letters from the state and federal agencies, and the bank, remove some major hurdles, and the CLT is ready to accept offers for the prospective homes from Sitkans.
“We were stalled for 20 months from the time we found contaminant until we got the letter,” he said.
The organization spent some $36,000 for environmental consulting and testing, $25,000 on remediation costs and about $20,000 on engineering costs.
The trust will hold a housing fair 4 to 7 p.m. Feb. 23 at Centennial Hall. The event will include information about the homes for sale, as well as financing information and options.
The houses start at $185,000 for a one-bedroom house, with prices going up from there for a two- or a three-bedroom home. Under the housing trust concept, purchasers of the houses will not have to pay for the land their houses are built on because the land will be permanently retained in trust ownership.
The planned housing unit will have seven houses in the center and parking on the edges.
The idea behind the trust is to reduce the price of a house for lower-income and first-time homeowners, by removing the price of the land. The organization hopes to put young families and first-time buyers into homes, allow them to begin building equity on their property, and encourage young families to stay in Sitka.
“I think people will be surprised to see they can buy a home for what people are paying in rent,” Hughey said. “If we can get mortgages to that range (of what they’re paying in rent) that will provide a way for people to move from rental to ownership.”
This project is needed now more than ever, Hughey added.
“If we can provide an opportunity for young families to buy a home, they might come to Sitka; they might stay,” he said. “We need this. The town is graying, gentrifying, and we’re losing young families.”
Hughey said the Sperling Cost of Living index shows the cost of housing in Sitka is 197 percent of the national average.
“The CLT model where they buy the home and not the land is the first rung on the ladder out of rental and into ownership,” he said. “This fits the circumstance of Sitka as well.”
There will be a number of qualifications for buyers, including an income limit of 120 percent of the area median income.
The CLT’s website includes an income chart and application.
The Halibut Point Cottages project is for only a portion of the available property at the old city shops site, and there are conceptual plans for the remainder, as well as for other parcels at 1410 and 1414 Halibut Point Road, which are still owned by the city.
