As recommended by the borough manager, the assembly voted on April 22 to sell the first 20 lots of the Alder Top Village (Keishangita.’aan) subdivision by auction to the highest bidder, dropping plans of the past 18 months to sell half of the parcels by lottery.

The intent of an auction is to raise more money than in a fixed-price lottery to help cover a larger share of the development costs for the borough-owned land just past Shoemaker Bay.

“It would be imprudent of us to use public dollars to subsidize a lottery,” Borough Manager Mason Villarma told assembly members.

The borough is advertising for bids for a contractor to finish road construction and install underground utilities at the subdivision. That work is estimated at $1.9 million. When added to the $1.887 million the borough already has spent on clearing the land and roughing in streets, the development costs come to almost $3.8 million, Villarma explained.

The federally funded Denali Commission awarded the borough a $300,000 grant to help defray some of the costs, the manager told the assembly.

Depending on the auction bids, the borough could recover around half of its costs if all 20 lots sell at above their appraised value.

The money for the subdivision work — and the proceeds of the land sale — come from and go back into the borough’s land development fund which was set up in the 1990s to develop municipal land for sale to private ownership.

“Realizing how much we have put into it at this point,” Villarma said of the expensive site work, he recommended the assembly sell all of the lots by auction.

The assembly approved the motion unanimously.

The lots were last appraised in 2023, showing a fair market value ranging between $46,400 and $69,600 for the roughly half-acre parcels, depending on their location on the land. Assembly members said they want a new appraisal that considers the road and utility work to set minimum prices for the auction.

The online auction is set for July 1 through Sept. 29.

“I liked the lottery for new families,” who might not be able to afford a bidding war in an auction, Mayor Patty Gilbert said at the assembly meeting, but added that she understood the financial reasons for the auction.

“We won’t give up on that entirely,” she said of a possible lottery sale if the borough develops the second phase of Alder Top, which could provide an additional 20 lots.

In approving the land sale resolution, the assembly also accepted the administration’s recommendation that the borough offer financing for buyers.

The down payment and interest terms will be decided later, Villarma explained.

Requiring payment in full on the lots could make it unaffordable for many people, he said, particularly when adding in the cost of building a home on the land.

He will bring an ordinance to the assembly for consideration and approval this summer, setting up the specifics of a financing plan.

Assembly Member David Powell said that if City Hall offers financing, it needs to inspect the construction work to ensure compliance with building codes — to protect the borough’s investment in the parcels.

Both Villarma and Economic Development Director Kate Thomas explained to the assembly that the borough will heavily market the parcels on social media, with a video, Google ad buys and tours for prospective bidders.