The downtown building that once housed Nordstrom is at 6th Avenue and D Street on Feb. 12. Nordstrom closed at that location in 2019. (Marc Lester / ADN)

Mayor Suzanne LaFrance’s administration wants to convert the old, vacant Nordstrom department store in downtown Anchorage into new housing and commercial space.

“The Nordstrom property is a key symbolic and physical asset in Anchorage’s downtown core,” according to a public benefit statement filed by the Anchorage Community Development Authority, a quasi-governmental municipal corporation that is behind the redevelopment effort. ”By providing a mix of specialty retail and housing, the project will reactivate foot traffic and economic opportunity.”

Nordstrom closed in 2019 after 44 years at the location, where it occupied a place of reverence in the lives of many Alaskans as a fixture of Outside finery and elegance. Since then, the structure has been empty.

Nordstrom announced in June 2019 that it would close the Anchorage store in September of that year. (Anne Raup / ADN archive)

“There’s a lot of work that has to be done before we can put forward a real development plan,” said Mike Robbins, director of ACDA, in an interview Monday.

The first step in that process is an ordinance going before the Anchorage Assembly on Tuesday during its regular meeting. For the Anchorage Community Development Authority to begin the process of soliciting conceptual designs for a potential overhaul of the structure, the city first intends to transfer formal ownership of the parcels from the municipality’s Real Estate department over to ACDA.

The move does not kick off any renovation work, according to a memorandum submitted by the LaFrance administration to the Assembly in support of the transfer. But it gives officials at ACDA the legal ability to begin looking for a tenant with a vision for what could be built within 80,000 square feet of interior space.

“In the current configuration we own the land underneath, and then we have this ownership interest in the building,” said Tiffany Briggs, director of Anchorage’s Real Estate department. “It’s transferring management.”

The city owns four of the five parcels at the site. The fifth is owned by a private entity that the city is working with, which will have to agree to final development plans.

Until 2024, Nordstrom covered upkeep costs at the building, including security, maintenance and utilities as part of its lease with the city, Briggs said. The municipality has since taken those over. Briggs explained that the point of transferring management of the building from her department to ACDA is because they have more capacity for redevelopment.

“ACDA is better suited, and that’s kind of their mission,” she said.

ACDA redevelopment plans

So far, ACDA’s plans are general. Robbins said that the authority’s role is facilitating development, but specific plans for the number of housing units, price, potential retail components or cultural spaces will take shape as proposals are submitted down the road.

ACDA anticipates redevelopment at the site to begin contributing revenue to the municipality about a year after a private developer signs a lease agreement. There are proposed incentives specified in the public benefit statement, including a complete exemption on rent for the first year of the agreement, and a graduated increase for the first decade of an agreement. Rent costs would rise and hit market rate, roughly $300,000 annually, in Year 11 of the agreement. Three-quarters of the rent collected would stay with ACDA, and the remaining 25% would be set aside for a maintenance reserve for major upkeep. The tenant would be responsible for insurance, maintenance costs and property taxes paid directly to the city, anticipated at around $180,000 a year at current levels.

Robbins, who has toured the empty building several times in recent months, said renovations will not entail major demolition.

“The building has good bones,” he said.

Inside downtown Anchorage’s Nordstrom store in summer 2019, before it closed that September. (Anne Raup / ADN archive)

The site has also been consistently locked up and patrolled, without instances of squatting or destructive vandalism, Robbins said.

ACDA has worked on a number of fledgling projects over the last year, including a 32-unit tiny-home recovery cluster in Midtown, an RV park along Third Avenue and a workforce housing development at an empty lot on Fireweed Lane.

According to ACDA, should the Assembly approve the property transfer, they intend to solicit proposal bids this summer. Permitting would happen in the following months, with construction beginning by late 2027.

“This one really checks a lot of boxes for us. It’s downtown revitalization, which is part of our mission,” Robbins said, adding that housing and new development is a priority of the mayor’s administration and an issue for residents across the municipality. “We try to be responsive to what Anchorage needs.”

The property transfer ordinance is on Tuesday’s Assembly agenda for introduction, with public comment scheduled for a future meeting.