Anchorage is weighing a trade of land it just bought for $2.35 million for four downtown parking lots

A proposal before the city would give up nearly 10 acres Anchorage spent $2.35 million to finish buying just five years ago, in exchange for four downtown surface parking lots — a trade that would clear the way for housing but that the state has already objected to, and that is structured in a way that sidesteps the competitive bidding a sale would require. An advisory commission takes it up Thursday, the first of several steps before the city decides.

The land in question is the former Tozier Track, near Tudor Road in the U-Med District, which the city would hand to the Alaska Housing Finance Corporation for residential development. In return, Anchorage would get a roughly 1.6-acre downtown block near West 8th Avenue and D Street. The downtown block is appraised higher — about $5.24 million against the Tozier parcel's $4.125 million — and no money changes hands to bridge the roughly $1.1 million gap, which runs in the city's favor.

The city's own recent history with the Tozier land is part of what makes the trade notable. Acquiring it was a municipal goal going back decades, named in park and master plans, and the land bank finally got it in 2021 — paying $2.35 million on top of other land it traded away to get it. Now, before the city's own study of what the parcel should become is even finished, it's proposing to give it up. That study's final report isn't due until after this week's vote.

How the deal is built matters too. Under land bank rules, an outright sale would have to go to open competitive bid at fair market value. An exchange only has to be on "at least an equal value basis" — which the higher-appraised downtown block satisfies — so structuring the deal as a trade avoids the bidding a sale would trigger. The exchange also isn't authorized in the city's current land-management plans, which call only for studying the parcel; the same resolution amends those plans to allow it.

The state has formally objected. If the Tozier land is transferred and redeveloped for housing, an Alaska Department of Transportation planner wrote in July, it "would likely preclude or substantially limit" the city's ability to revive long-planned transportation projects there — a shelved Martin Luther King Jr. Avenue extension and connections to nearby streets. The city's own right-of-way reviewers, by contrast, raised no objection to the trade.

If it goes through, the deal carries conditions meant to guarantee housing gets built: at least 70 percent of one of the sites developed as residential, a minimum density of eight units per acre, and the downtown block folded into the land bank with any profits from it returned to the land bank fund.

Thursday's hearing is only the first step. The Heritage Land Bank Advisory Commission would merely recommend the trade; the Anchorage Assembly is set to take it up at a work session later this month before any final decision.