Assembly Member Zac Johnson addresses Holtan Hills, Girdwood and future

Municipality of Anchorage Assembly Member Zac Johnson in a screenshot taken from an August 12 Anchorage Assembly meeting. (Photo courtesy Municipality of Anchorage)

"I never liked this deal and I don't think I ever will."

—Assembly Member Zac Johnson

By Soren Wuerth

TNews Editor

This is an interview Turnagain News had with Municipality of Anchorage Assembly Member Zac Johnson. Four days after he challenged his colleagues in the Anchorage Assembly on the merits of a controversial housing development in Girdwood. Turnagain News interviewed Zac Johnson, who represents the community and South Anchorage. The article contains excerpts from our August 16 interview with Johnson.

TNews: Do you have a hard time getting information about the project as an assembly person? 

Zac Johnson: No, I'll say the administration and the folks at (the Heritage Land Bank) have been more than willing to sit down and talk through my questions with me. I think that's an advantage of the position I'm in. 

Leading up to action last Tuesday, I had several sit downs with HLB and the administration, raising my questions. And for the most part, getting answers to them. So I don't think there's any effort to stonewall there. 

I think HLB and the administration are kind of the same. This is the hand they were dealt, right? So it's their job to implement the development agreement and the ordinance that was provided by the assembly. That's just them doing their jobs, essentially. 

I guess I would just say in their defense that, one, HLB is a very small department... There's really just three of them there doing all that work. 

TNews: Was Tuesday night the first time you heard about the pro forma (projected revenue and expenses for "Holtan Hills")? 

Zac Johnson: So I've been asking for a pro forma, some tool I could use to try and weigh whether or not this feels like it's a good investment. And if it's a bad investment, how bad of an investment is it? 

The only thing we had was the pro forma for 2022, which certainly doesn't feel useful and doesn't include phase three. So I'd asked for it, but it's the developer that prepares the pro forma and it was unclear whether or not they were obligated to share that pro forma with us. 

TNews: Will the Muni get back federal money or for the cost of off site development (an appropriation from Sen. Lisa Murkowski)? 

Zac Johnson: No, no. The $2.5 million that we appropriated last Tuesday from the HLB fund... we will not get federal money back for that. 

The congressionally delegated spending, that money is still out there. But it will be invested in other infrastructure projects in Girdwood (like sewer system upgrades).

So that money's still relevant, but it's not going to go to fill the $2.5 million hole in the HLB fund. And so then there's no (National Environmental Policy Act) process, right. 

TNews: Are you aware that there were construction delays caused by the unintentional discovery of an old landfill. I don't know if you heard about that. 

Zac Johnson: No, I hadn't. It doesn't surprise me...

TNews: ...And that amounted to like a giant pile, you know, easily the size of an excavator alone of this garbage, old cars, and propane tanks. 

Zac Johnson: ... I don't know the specifics of these circumstances. I'll be curious. I'll ask. 

TNews: How, is Crow Creek Road an unexpected expense? Did you feel like you got an answer to this question or is that still up in the air? 

Zac Johnson: I think I got the best answer that I can get today, because there are unknowns... Yeah, there's a lot of issues relating to Crow Creek Road, right? 

... As it relates to Holtan Hills, we were really talking about the first two miles of Crow Creek Road,  where you go from the highway to where the secondary access for Holtan Hills would connect. For that section there, the development agreement states that the owner, the municipality, will pay for necessary improvements or upgrades. 

I'd have to see the exact language, but it says that if you need to make changes to Crow Creek Road as a result of this development, the muni pays for it. 

We don't have a final final plan for Holtan Hills. But the concern would be when you put in those additional houses, that DOT will say, because it's a state road, that that section needs to be upgraded to a collector road. So, a bigger road, different standards, because there are now additional residences using it. 

So the way one way it could play out is:  as we get further along in the Holtan Hills project—this is multiple phases over multiple years—DOT comes back and says, you need to upgrade that section of road to a collector road and the development agreement states that the Muni will pay for that work and, if we do have to do that, it is very expensive work. 

That's where, you know, (the estimates) came up with the potential $7 million liability. However, we don't know any of that for certain, and I think there's a good chance that the muni could or might ask for a variance. They might say technically there are enough residents using Crow Creek Road now because of Holtan Hills that maybe the formula says it should be a collector, but let's get a variance. And I don't know enough about how the application process is handled or what factors are considered. 

So I think the hope would be that we could get a variance and that we're not left scrambling to try and come up with the money to make the major upgrades to that section. So then... that road would still be used as an emergency access, but it just wouldn't be upgraded or even maintained. Well, I think it would probably look like it looks today. 

TNews: Is there any risk that the project that the revenue could cost more than it takes in at the end? 

Zac Johnson: Absolutely. You know, I mean, we won't know how much money it'll make until you sell the lots, right? And we don't really know what the developer's costs look like. I mean, the only thing we have right now really is her statement about her projected cost for Phase One. That doesn't tell us anything about Phases Two or Three. 

And those costs will shift some as the project moves forward as well. So, there's a lot of unknowns. And without a pro forma reference for Phases Two or Three or even a detailed one for Phase One, we're really just kind of guessing. 

TNews: Is there a chance immunity could lose money on this project? 

Zac Johnson: Yeah. There's definitely a chance because... well, let me back up and put a little asterisk on that. 

I think it depends on whether or not you consider the $2.7 million part of the project cost. I mean, one way you could frame this is to say we are making infrastructure upgrades with the offset improvements. 

TNews: Is there anything that needs to be discussed and voted on? 

Zac Johnson: I don't believe there's anything else we need to vote on for the project to move forward. I think we have the appropriation for the offset costs. 

We have the land disposal authorization from January 2024. So I don't believe there's anything else that necessarily will come back for us that will require action. Now, that's not a guarantee. 

If there are extraordinary circumstances and costs go up, then there may have to be an additional appropriation, but I'm not anticipating anything. 

TNews: Is there a message you can give to the Girdwood community as this controversial project is underway? 

Zac Johnson: I share Girdwood's frustrations about this. I never liked this deal and I don't think I ever will. 

I don't think it's a good investment. I don't think it is going to serve the needs of the community and I don't think there's anything about it that feels reflective of what the community has expressed in their desires. This has gone forward against my objections every step of the way. 

I did not support the ordinance. I was one of the few people who voted no on AO 2023-137 because I was not convinced it was a good proposal. I asked for a delay so we could ask more questions and figure out if there was the way to make it more palatable...

But I am one of 12 votes and I didn't have the votes to stop it back then and I don't have the votes to stop it today. I don't live in Girdwood, but I really care about the community and I take my job of representing the community very seriously. And I will tell you, between when this was introduced and when we took action on it, and just this appropriation for work that's already been approved, I've lost a lot of sleep. 

And I frankly felt a lot of anger about this process and what it means for Girdwood. So yeah, I just want to be very clear that I don't feel good about it. Never have, never will. 

TNews: Do you think there's any chance that the project could be stopped or the phases restricted to Phase One...?

Zac Johnson: I mean, the Assembly, and this was, again, not an action I support, but it was all packaged up into one agreement that was approved—the development agreement in 2022 and then the land disposal in 2024. So there's a contract there for all three phases to proceed, and there's nothing in there that requires future action or approvals.

 And I'll tell you, I don't think that's a good way to do business. I think it speaks to recklessness when the project was approved in 2024. But that's how it is. Now, within the realm of theoretical possibility could there be an action by the Assembly to stop work? 

Potentially, right? I mean, something could be drafted and voted on, but I'll just tell you, as a matter of fact, that I don't see there being support in the Assembly for it. 

...I think the reality is everyone in the Assembly gets to vote on these things. And my sense of it is that there's more than enough support in the Assembly. even with my dissent, for this to continue. And the further down it goes, you know, the harder it becomes to stop because there will be more sum costs. 

And I think there probably will be more of a desire to try and recoup some benefit from that, if you will. And I'm kind of putting benefit quotes because I think the way I measure benefit is going to be different than some of my colleagues in the Assembly, but, you know, we all have our own framework there.

TNews: There is talk of Girdwood de-annexing from Anchorage, of Girdwood becoming its own municipality—basically folks are saying that Girdwood wants to have more representation for what happens with land use. 

Zac Johnson: Yeah, what would it take to de-annex Girdwood? I'm not sure. 

I'm sure it would be a complicated process, but is that the same as saying as possible? No, I honestly don't know what it would look like. 

...I guess I'm not sure if I want to indulge in the hypotheticals too much. But I certainly get, and I respect, (the) frustration; feeling like they do not have the level of control with the community that they should. It's frustrating. 

Just to keep it to Holtan Hills, I share a lot (of frustration with) Girdwood, and I really think very strongly about any vote I cast that affects Girdwood. And it pissed me off, too, to get completely steamrolled around Holtan Hills. It did not feel good. 

I felt like I was expressing a sentiment that reflected the views of my community in Girdwood. At the end of the day, I was one of 12. ...I can't make things happen and I can't stop other things from happening because we are part of this larger body. 

I also know that there was a lot of dissatisfaction in the community with the comprehensive plan and the amendment to support the Pomeroy development (of lands near Glacier Creek). And that could be a whole separate conversation, one I don't mind having and I am certainly happy to talk to folks about it. And I have, and I'm happy to talk to you more about it. That's a thing that could eat up another 45 minutes, right? 

But I think there are a couple important differences there. One, it is a different project in some notable ways. It is a project that does include things like multi-family housing and community amendments and workforce housing. 

Now, is that enough to make it good? Maybe not, in some people's eyes, but is that different, significantly different from Holtan Hills? (Holtan Hills) is almost entirely single family, market rate housing.

Another difference... (is) putting (mixed housing for Pomeroy's expansion plan) in the comp land doesn't necessitate that the land will go to the developer. And conversely, not putting in the complan doesn't mean it won't. It is just one step in a long process. 

...But what will this assembly say yes to? I think we've seen that the assembly generally as a body doesn't mind doing things that upset Girdwood. I think that's pretty clear.

Sometimes you have to think about where can I make a compromise to avoid a worse outcome. And that's not not always going to sit well with people, but I don't make these decisions lightly especially when I know that there's real concern in the community about it. 

Finally, I'll point out that with this potential project, Holtan Hills has asked us for free land and for public money to support that development. I have not seen a request like that, nor am I necessarily anticipating one for the Pomoy development. Now, will they? Maybe. 

"...And one other thing, Connie Yoshima said the other night that (Holtan Hills) could have this mix of housing. And she kind of ventured to say more duplexes, more condos. She kind of went off script and just talked freely about her housing plans, which (was) a little bit surprising for us because we've been hearing all along that these are big single family homes that would be dark homes. And is it realistic that there could be a lot more affordable housing out there? 

Or is she just trying to sell the project a little bit more? Well, we'll see. There's nothing in the development agreement that says anyone has to build a particular type of housing product.

So it'll be subdivided into lots, and then those lots, you know, will be sold to builders. Now, could conditions be put on some of those lots? Or could the design be changed in a way to require a certain type of housing on it? Potentially. But there's nothing in the ordinance or the development agreement that requires that today. So if you want to make that a requirement, it would mean making changes to the development agreement or some other legally binding document. 

...I guess my position today would be, those things sound nice. I would love it if the development plays out in that way, and that we had more varied housing types and some that were at a lower price point. Like I would like to see that. 

But my concern is if you just take a lot and you sell it to a builder, what the market's going to say is build a single family home there. I mean, the builders aren't required to take altruism into their business models. I think they'll build what the market wants and the market generally wants single family homes.

We don't have a detailed plat map. That's another thing that might be nice to share with the public that we don't have at this point. 

TNews: What are your plans (as an Assembly member)? 

Zac Johnson: My term ends next April, so I'll have to run for your election this spring if I want to keep doing this job. I'm certainly thinking seriously about it. This job causes me a lot of heartache and stress, but it's also one that gives me a lot of satisfaction. 

  I am still making my final decision as far as that goes. But for as long as I'm here, whether it's another eight months or another four years, whatever it is, I'm committed to doing the job as best I can and then certainly want to be a voice for Girdwood.