Wasilla planning commission to vote on youth behavioral health facility permit

Denali Family Services wants to build a two-story outpatient youth behavioral health facility on a vacant commercial lot in Wasilla, and city planning staff are recommending the Wasilla Planning Commission approve the permit when it meets Tuesday, July 28.

The proposed facility at 600 N. Lucille Street would be 21,700 square feet on 3.44 acres at the corner of Lucille and Nelson Avenue. The project narrative calls it the Wonderland Project. Denali Family Services currently serves more than 200 youth and families annually across Anchorage and the Mat-Su Valley. The new building would consolidate outpatient wrap-around services including therapeutic foster care support, psychiatric care, early childhood and school-based behavioral health, and case management. At full build-out, the facility would employ approximately 35 to 40 staff.

The project narrative states the facility is intended to reduce reliance on higher-cost institutional and out-of-state placements for Alaska youth. That framing fits a broader regional push: the Alaska Department of Health approved a Certificate of Need in 2024 for a 45-bed behavioral health hospital adjacent to Mat-Su Regional Medical Center in Palmer, a $72.5 million project with a projected June 2028 completion. The Denali Family Services proposal addresses a different gap, outpatient and community-based care for children and families, rather than inpatient beds.

Staff Recommendation and Conditions

City planning staff found the proposal meets all nine conditional use criteria under Wasilla Municipal Code. Staff recommend approval with conditions. One condition ties final sewer capacity verification to completion of the city's wastewater treatment facility improvements before occupancy. A second requires the applicant to obtain a letter from the Central Mat-Su Fire Department Fire Marshal for a certificate of approval before building permits are issued. Other conditions include resolving all reviewing agency comments, obtaining required utility and driveway permits, submitting a complete site plan for city review, complying with exterior lighting standards, installing landscaping per the approved landscape plan, and obtaining drainage approval from the Public Works department. The Alaska Department of Transportation and Public Facilities reviewed the application and raised no comments on CU26-03. By contrast, DOT&PF requested that the applicant for the second permit on Tuesday's agenda, a gas station on Parks Highway, continue working through a Traffic Impact Analysis process with DOT&PF Right of Way and Traffic and Safety.

Public Comment and Next Steps

By the July 21 written comment deadline, the city had received two agency review comments and one public comment on the Denali application. Comments received after that deadline may still be distributed to the commission and become part of the public record. The commission will take public oral testimony at the July 28 hearing, with five minutes allowed per person. Staff recommendations are advisory only; the commission makes the binding decision.