An appraiser told Anchorage its property was worth $3M. The city sold it to the

In 2019, an Anchorage real estate firm estimated the market value of a downtown parking lot at more than $3 million.

Earlier this year, an obscure city agency voted to sell the lot for $1 million less.

The buyers were a pair of politically connected developers, who are in the process of renovating a nearby hotel: Mark Begich, a former Anchorage mayor and Democratic U.S. senator, and Sheldon Fisher, a former state revenue commissioner who once ran for U.S. House as a Republican.

The agency that sold them the lot, the Anchorage Community Development Authority, or ACDA, is focused on striking real estate deals that boost the city’s economy.

But the sale price raises questions about whose interests were served by the transaction, as does a below-market lease that the agency previously granted to the developers — especially given Begich’s close ties to two of the board’s nine voting members.

Two independent real estate appraisers who examined the deal at the request of APM Reports and Alaska Public Media say the sale price was lower than the property would likely fetch on the open market.

Public agencies often grant financial incentives to trigger new development. But construction on the hotel is already underway.

Begich, at the recent ACDA board meeting where the sale was approved, suggested that the parking lot is not an essential piece of his project. And his plan isn’t to transform the lot into a vibrant new development; it will still be used to park cars.

“It’s really just kind of a complementary component,” Begich said. “It really is just part of this bigger complex that we’re trying to develop.”

The sole board member to vote against the sale, Lance Wilber, said he did so because he felt “a little uncomfortable” selling the lot for less than its $3.2 million appraised value.

“I think Mark and Sheldon have a great, great project. I have confidence that they’ll pull it off,” said Wilber, who also leads the city’s Office of Economic and Community Development. “I just want to make sure we’re not devaluing the property for a great development opportunity.”

Among the board members voting in support of the sale was Ron Thompson, who owns a business that handled some of the permits for Begich and Fisher’s hotel renovations.

A former head of the city’s public works department, Thompson and his family own Scope Permitting & Engineering, according to its latest corporate filings dated December 2022. His business handled some of the hotel’s electrical, mechanical and plumbing permits, according to city records.

Thompson declined to comment on his vote when reached by phone afterward.

Begich said Thompson’s connection to the permitting work for the hotel business was “incidental” and downplayed the significance of their relationship.

“Even without his vote, it passed,” Begich said.

Leslie Ridle, another board member who works part time for Begich and Fisher, recused herself.

But she voted in support of the previous lease and a separate agreement for another nearby parking lot that the developers plan to rent from ACDA for the next 99 years. Ridle was not employed by Begich and Fisher at the time, but she worked for Begich for nearly a decade when he was mayor and senator.

Begich’s policymaking experience has given him firsthand knowledge of ACDA’s purpose: As mayor, he led its creation in 2005. The agency, he said, was designed to have flexibility to partner with developers on projects in ways that don’t meet what he described as the “black and white” standards of traditional procurement rules.

ACDA, which also manages a number of city-owned parking lots and garages, is not subject to standard city purchasing and competitive bidding restrictions. It can buy or sell property worth up to $6 million without approval from the Anchorage Assembly, and in the past, it has invested cash directly into projects through public-private partnerships.

“ACDA was set up for the purpose of ensuring Anchorage had an arm to spur economic development,” said Begich, who’s worked in real estate for decades. The deal, he added, is “a win-win for everyone, and that two-block area is going to be just a catalyst to change the environment of downtown and create much higher value of economic development.”

Politically influential buyers

Both Fisher and Begich have lengthy…