After years of working through platting boards and city departmental reviews, developers Bob Miller and John Berggern got the go-ahead in August 2005 on their Southpointe subdivision project in Potter Valley.
They took out a $1.3 million construction loan and hired crews to start building a road through the 51-acre parcel.
Things seemed to be going well until the city issued two stop-work orders, one in June and another in July. The project has been at a standstill since.
“It's devastating,” Miller said. “I'd be surprised if we make any money on this.”
Builders across the city have similar stories, saying projects have been delayed due to changes in approved plans, late inspections and a host of stop-work orders issued by the city.
City officials say they are working with the engineers on dozens of subdivision projects to iron out the issues and get the developments back on track, but admit the road to building subdivisions has changed.
The municipality's Project Management and Engineering Department is trying to rebuild its procedures to truly follow the rules and regulations for the first time in years. Many developers, the city says, don't like it.
Developers, meanwhile, say problems stem beyond the department trying to enforce the rules. The department lacks the staff, the experience and the courtesy it needs to get homes built.
Developers say the municipality's Project Management and Engineering Department unfairly stalled housing and subdivision projects during the entire 2006 building season.
No foundations for new homes were approved during the fall, according to the Anchorage Home Builders Association. The lack of starts raises concerns about shortages, and the potential for higher home prices in an already-tight housing market.
In all discussions, builders bring up one name, project administrator Glenda Radvansky, as the reason for all the problems.
“I don't know how many projects she's got bogged down, but it's a lot,” said Paul Palmer, a land developer with Prudential/Jack White Vista Real Estate, and agent for the Southpointe project, in December. “The department is not very responsive, and the attitude is, 'We don't care if we hold up your project.'”
Radvansky readily admits there have been problems since she came on board. When she was hired last spring, Mayor Mark Begich and her direct supervisor, municipal engineer Howard Holtan, directed Radvansky to follow the regulations and statutes to the letter.
“When I took the job, I grossly underestimated the challenge,” she said. “We really changed the rules on them and some are having a hard time with it.”
Both Begich and Holtan agreed there have been differences between the department and developers, and Radvansky was getting the blame for their direction to follow the rules.
“She's the messenger,” Holtan said. “We recognize that we are having difficult relations with developers, but development in Anchorage is more difficult now.”
In June, Radvansky wrote new policies and procedures that outline what the project management department does and specifically outlined the developers' rules and responsibilities.
“We're implementing the rules that are on the books,” she said. “For years, people's feet had not been put to the fire. Now there's a lot of fallout.”
The department has dozens of old housing projects that haven't been closed out. For some, the developer hasn't filled out the applications to close them, others because the department didn't do its job.
“Once the infrastructure was complete, there was no motivation to complete jobs,” she said. “There was a 1996 project on the books, and I just got them to put streetlights in this summer. Performance bonds and warranty bonds expired, and the municipality didn't pursue it.”
Some 209 subdivisions are in various stages of completion, according to the city. Of those, notices of completion have been filed for 32 projects, while 26 are under construction and 20 are scheduled for inspections this spring to either put the project on warranty or close it out.
The department is in negotiations to close nearly a dozen old projects, and has referred more than a dozen more to the legal department to settle.
The project management department primarily oversees the road and drainage portions of housing projects. Developers put proposals through other departments as well, including zoning, traffic, code enforcement and street maintenance, among others.
Staff in each department review proposals and list changes that must be made before final approval. Once issues are whittled down, departments give the developer a notice to proceed and construction on an access road and homes can start.
Developers hire an engineer to oversee the work, while the city does surveillance and inspections, Radvansky said.
“An inspector drives by to make sure they are following the rules,” she said. “Make sure they're not paving in puddles, that they've got an engineer onsite.”
When the road is completed, an inspection crew comes to the site and, if everything is in order, the city takes over the street maintenance and the project goes into a warranty phase for two years.
Developers go to a bonding agency to get a warranty bond, similar to an insurance policy. During the warranty period, developers agree to fix items in the subdivision, cracks in the pavement or a tilted fire hydrant, for example.
If developers don't fix problems — or don't install such required items as streetlights — the city can take steps to seize the bond.
In the past, the department didn't always follow through on its end, Radvansky said. Sometimes it didn't do necessary inspections at the beginning of the warranty phase or to close out a warranty bond. Some inspections generated a list of items that needed to be fixed before the project and warranty were cleared, but the developer didn't fix them, and the city didn't pursue it.
Miller's Southpointe project has yet to get past the road portion after two stop-work orders were posted this summer.
A June 13 posting stopped work because the city said daily engineers reports had not been filed. Before that could get worked out, a second notice on July 11 said the plan was under review.
Construction equipment has sat idle since. Meanwhile, Miller and Berggern are paying interest on the portion of the loan they've used and potential buyers for the properties have backed out.
The major roadblock is in the grading — some areas through the 51-acre parcel are too steep, Radvansky said.
Work was stopped because the developers didn't have final approval to build the road; they had “conditional approval to do clearing and grubbing,” Radvansky said.
“They didn't have the authority to build a road, they had the authority to take down the trees,” Radvansky said. “They had put down a sub-base. There was no inspection, no testing, no reporting, no nothing.”
Miller harbors some well-earned hard feelings over the whole project, he said.
On July 27, city inspector Robert Hagberg called Anchorage police to report a violation of a stop work order on Miller's property. A survey crew was on the property to assess a utility easement that was not related to the Southpointe project, Miller said.
The next day, Miller called 911 to report that Hagberg was trespassing on his property, and asked for police to escort him off. Police did not respond.
“My big question is where are they getting all this authority?” Miller said. “She has supreme authority, there is no appeal recourse to anyone. Is this legal? It's troubling that this whole thing is sliding into a political issue and nobody is examining who has the authority to do what.”
In addition to Southpointe, seven other projects are currently under stop-work orders, the city said. Three of those are due to disputes between the city and the developer over road grading or drainage concerns. Stop work orders were not tracked before 2006, Holtan said.
The city spends more than $2 million a year to fix items in subdivisions that fail before their time, he said. Street maintenance doesn't keep track of street and drainage improvements it does in these subdivisions, he added.
“It is reasonable to expect subdivision roads to last more than 30 years without major maintenance or reconstruction, yet we have many subdivisions that have required reconstruction five to 20 years after developers have installed the improvements,” Holtan said in a written message. “The evolving improvement in the administration of municipal code, design criteria and subdivision agreements by the municipality should minimize the occurrence of premature failure of subdivision streets and drainage improvements in the future.”
Road and drainage improvements in Kempton Hills, Geneva Woods, Devonshire, Foxridge and other subdivisions were recently reconstructed after premature failure because of inadequate design or construction, Holtan said. Examples of subdivisions with prematurely failed roads and storm drains on the list for reconstruction include Town and Country Estates and Bayshore West. Individual streets that have prematurely failed and are scheduled for reconstruction include Marathon Circle, Leawood Drive, Roy Street, Arlene Drive, Kingfisher Drive and Pelican Circle. Subdivisions where streets have begun to show problems and will likely fail prematurely and require reconstruction include Olympus, Michael, Muirwood and the Ponds, he said.
Radvansky said things will get better, though the department will continue to strictly enforce the rules.
Inspections last summer were slow, and weren't always consistent, one of the bigger complaints from developers. The department had one inspector for most of the season, but hired two temporary inspectors to help with the backlog.
“It was a valid complaint; inspections used to be piecemeal,” she said. “But in our defense, if they see a crack in the sidewalk, my guys didn't need to come and tell them that. We shouldn't have to tell them they didn't put in the streetlights. If they know it needs to be done, they should do it before they call for an inspection.”
To catch up on the backlog, the project management department has already scheduled some inspections for the spring and for the winter, Radvansky said. Representatives from the various departments will do the inspections at once, to eliminate the inconsistencies.
The department is also planning to ask the assembly to approve a change in billing, so that the city can charge a flat fee for services.
By the end of January, department staff will have gone through each of its more than 200 dead file project stack to determine how to close the project out.
The department is in the process of developing a database for projects, so it can better track of warranty timelines.
Change is difficult, but the department is making progress, Radvansky said.
“We've made a lot of progress,” she said. “We've not had a chance to prove ourselves yet. By the end of next year, I'm hoping that these complaints on consistency will be nonexistent.”
Melissa Campbell can be reached at melissa.campbell@alaskajournal.com.
