Redeveloping Properties in Downtown Anchorage to Uplift the Neighborhood

The third phase will complete the last 86 rooms, including suites in the old pool building along Third Avenue and the glass-enclosed entrance along Fourth Avenue.

The rooms, restaurant, bar, and brewery total 200,000 square feet. No hotel of this size and scope has been built in Downtown in more than twenty years since the Marriott Anchorage Downtown high-rise opened in 2000.

This hotel is not being built, though; it’s repurposed. Begich says he prefers to redevelop properties, as he did with the old Florcraft Carpet One building near the Downtown fire station. As a revitalization project, Alaska Hotel Group benefits from a municipal property tax exemption worth approximately $1 million, spread over ten years.

The city is also helping to facilitate clean energy and resilience improvements through the Commercial Property Assessed Clean Energy & Resilience (C-PACER) program. The project will pay back more than $16 million in private-sector lending to cover the cost of ventilation and wiring upgrades, much of it through operational savings. “We’re basically taking out ‘80s technology and bringing all the new stuff,” Begich says.

Renovating and Repurposing

To avoid tearing out walls for electrical renovation, wooden panels cover the outlets. This feature creates space above the beds for a relief sculpture resembling a topographic map of Denali. That artwork accompanies one of four prints designed by local artist Ted Kim that hang in each room.

In the yet-to-be-finished lounge, Begich envisions gleaming pipes from the brewery and flames from kitchen stoves. The décor is being refined in-house even though the hotel is joining a national brand. MASH has a deal with a franchise, but Begich wasn’t prepared to announce which one until closer to the 2024 grand opening.

The brewery partner has been named, though: Midnight Sun Brewing Co. is prepared to open a new branch as early as next summer. Begich considers it both a centerpiece of the hotel’s restaurant, lounge, bar, and flexible gathering spaces while also being a standalone attraction. “You can park in the back, come through here, sit in here and have a beer with your friends. Never have to go into the hotel. You won’t even know it’s up there, if you don’t want to,” he says.

Critical Partnerships

Multiple hospitality options—food, drink, active environments or quiet rooms, open-air views or indoor art exhibits—call to mind the Downtown destination up Third Avenue, 49th State Brewing Company. In its previous incarnation as the Snow Goose Restaurant, the former Elks lodge was converted into performance space, private dining, and rooftop patio, served by an upscale restaurant with suds brewed on the premises.

When Begich’s joint opens, he expects it will grow into something more than a second choice for overflow crowds when 49th State is too busy. “We hope it’s the other way: we’re full and they go down there,” he says. “Here’s why: the parking.”

Huge lots on Third Avenue service the hotel and the mall. The city controlled the parking, though, so MASH arranged to buy the hotel’s 200 spots from the Anchorage Community Development Authority for $2.2 million. The agency also agreed to lease the mall’s parking to the developers.

Cooperation with the city maintained cashflow during construction. Hotel rooms served as transitional housing, paid with federal COVID-19 relief funds. “We were able to supply what the city needed at that time and keep our project from being interfered with, frankly,” Begich says. “Don’t stop the project because of COVID; figure out how to work with it. In our case, we helped the city house a lot of people in the middle of winter.”

The city’s upgrades to Fourth Avenue—spending $6.5 million on improved curbs, sidewalks, lamps, and planters—work to the advantage of the Downtown Revitalization Project, as well. “The city did a great job on this street. They did that over two years ago. It changed the look. Now we have to do our part,” Begich says. “Public partnerships with the private sector are critical; this is an example.”

MASH negotiated with the city to heat the sidewalks outside the hotel using surplus energy as part of the C-PACER upgrade. On that snow-free pavement, Begich wants to install two or three fire pits for outdoor entertaining. “In Downtown, there’s no commercial property that has exterior fire pits on the main street,” he says. “The only other fire pits at street level are my wife’s at the back of The Kobuk.” (Deborah Bonito, Anchorage’s former first lady, owns the gift shop and café in the historic Kimball Building, a three-block walk from the hotel.)

As another way to bring the indoors outside, the hotel will have a service window for coffee. “You want locals to come here and feel like they don’t have to go to a hotel, and you want hotel folks to go where locals go,” Begich says. “We’re creating the best of both worlds.”

Open Market

The most local of locals to congregate at Fourth and C might be occupants of condo housing at that address. MASH aims to have units finished by spring, pending permits. Fifteen homes would fill 18,000 square feet on the Post Office Mall’s top floor, formerly leased office space. With 12-foot ceilings and 9-foot windows, Begich boasts of “nothing like it in the marketplace.”

The market for Downtown housing is surging. This month, Block 96 Flats is getting ready to welcome its first tenants. The five-story apartment complex at Eighth Avenue and K Street has forty-eight units loaded with smart features, such as water detection to notify management if the washer leaks. Developer Shaun Debenham says the project is going great, and he’s excited to enter the market.

Housing is also part of redevelopment plans at Block 41, where the historic 4th Avenue Theater and a neighboring building have been demolished to make way for a $200 million mixed-use complex. Residents would share that address with planned hotel, office, retail, and entertainment space—not unlike Begich’s project barely two blocks down the street.

“I feel competition is healthy and offers the community more options,” says Block 41 developer Derrick Chang. “We are glad to know that he is also revitalizing Downtown and making Downtown a strong and attractive district.”

While welcoming other projects to make Downtown more vibrant, Begich eagerly points to unique features in the refurbished Post Office Mall, such as a planned distillery. The indoor mall will have raised ceilings, inspired by waterfront market halls like Pike Place Market in Seattle. “It’s not this ‘80s ‘box everything in.’ When you walk in, you’ll see a much more open environment,” Begich says. “Right now, the idea of this [existing] design is to block away the street, which is a problem.”

On the lower level, Begich envisions an indoor “alley” as a rally point where visitors branch out to the property’s other experiences (and validate their parking stubs). That could include a film festival at Alaska Experience Theater or breakfast at Biscuitclub, a current tenant that already draws crowds.

The café occupies part of the former post office that gives the 88,000-square-foot mall its nickname. Those 14,000 square feet hold the key to living Downtown: it could become a supermarket.

As if pitching to a grocery chain, Begich points out, “This concrete is built to post office standards; you could drive a semi-truck on this, and it’s not gonna crack.”

No retailer had inked a deal as of this writing, but the obvious candidate is Begich’s own. One of his other ventures is Aurora Stores, which operates the Stuaqpak supermarket and convenience store in Utqiaġvik. Begich acknowledges the possibility but says he’s keeping options open.

Transform Downtown

For all the talk of revitalization, Begich is quick to note the vitality of 4th Avenue Market Place’s street-facing tenants. Downtown’s only Thai restaurant and florist are in the building, he says, and Downtown Bicycle Rental does brisk business. Bike shop owner Peter Roberts says tenants were uncertain when the previous owner, a Lower 48 financial institution, sold the building, so he’s glad to see local investment.

The Downtown Revitalization Project involves only the properties managed by the MASH partnership, yet the ambitious name speaks to the broader perspective. “For example, as we’re working here, we’re talking to the people across the street,” Begich says. “Not about buying the property, but what can they do differently?” He recognizes improvements at the Avenue Bar and at the former Cyrano’s Theater, where the new owner plans to restore some upstairs apartments.

The fulcrum for change rests on four blocks of Fourth Avenue from E Street to A Street.

“You can transform a downtown. There’s not many cities you can do this with. Most of these are fifty blocks, sixty blocks, seventy blocks; we can do four,” Begich says. “That’s significant.”