For rentals, water rights are a balancing act

PALMER — Borough officials have recently held up the Bella Vista subdivision along 49th State Street as an example of one way to meet the future needs for housing in the Valley.

The place is mostly rental townhouses with some condominiums — the location’s developers describe it as “high-end” — an attractive option for Valley residents looking to avoid long-term mortgages, according to a recent borough survey. The available units were rented within months of going on the market, which borough officials pointed to as further evidence of local housing demand.

More importantly, the newly constructed housing is not apartments, according to borough planning chief Lauren Driscoll.

“It’s another type of higher density housing,” she said.

Most single-family homes in the Valley now rely on personal water and wastewater systems, which required about 2 acres each to function. Water systems such as Bella Vista use shared water and wastewater systems and allow for denser developments on small acreages.

Beyond running into market demographics, the housing units of Bella Vista are also being rented on something of a bet, though developers were quick to point out that they believe the gamble will pay out.

The bet stems from the split nature of water jurisdiction in Alaska. In order to operate a well drilled into a new aquifer (known as a “water right”), developers must obtain permits from two agencies which have jurisdiction over water in Alaska: the Department of Environmental Conservation, which oversees issues pertaining to water quality, and the Department of Natural Resources, which primarily oversees water quantity, but has secondary jurisdiction over water quality, according to state officials.

Bella Vista has obtained an operating permit from the DEC, but has only submitted the application for the DNR permit, a process that can take between one and five years. That means the development’s community water system can continue to operate in the short term, but also could be ordered shut down at any point, according to David Schade, the DNR’s water chief.

“Just because they apply doesn’t mean they’re going to end up with a water right,” he said. “We will adjudicate it. There is no pre-determined outcome that they be given the water right.”

That means the shining new development could potentially end up without access to the nearest source of potable water, Schade said. Other apartment complexes in the Valley have been constructed without securing the necessary water rights, according to Schade. And those developers now have to truck or haul water onto the property for consumption, he said.

While that might seem harsh, it’s simply aggressive stewardship of a public good, Schade added.

“We’re just trying to manage the resources in the public interest,” he said.

Water rights were among the issues cited when the development came into play. The then-owner of the Supersuds Car Wash at the corner of 49th State Street and the Palmer-Wasilla Highway said he was worried the large, high-density development would hinder his ability to get enough water to do business. The car wash has changed hands since then, and while Jacob Smith, the current owner, says he’s only been familiar with water usage in the area for about two years, he’s keeping an eye on it. The last six months, he’s noticed more sand in his water filters, but that’s about it.

“There’s been a little bit of sand coming through compared to the first year,” he said.

The property was developed in 2012 by ARC Land Development LLC, which is licensed to Cameron Johnson, Alexis Gevorgian, and local housing developer Robert Yundt.

Engineering assessments by his company show there is virtually no chance their water right permit will be denied, according to Johnson. They didn’t even consider a possible denial among the contingencies they planned for, Johnson said.

“That’s never happened to us in the past in all of the other subdivision we’ve developed,” he said. “I don’t know why that would happen here.”

Asked to speculate as to what he would do if his bet doesn’t pay off, Johnson said one potential solution could entail waiting until city water mains were installed along nearby Bogard Road, then paying to connect the property to the City of Palmer’s water supply.

The lack of infrastructure curbs development, Johnson said.

“One of the biggest issues we run into is a lack of vacant land serviced by both city water and city sewer,” he said.

The potential emergence of lots of high-density housing — which is inevitable given the cost of building out and maintaining infrastructure — also increases demand for the treatment of wastewater, which the borough hopes to address by constructing a new septage plant, according to Driscoll. Borough figures show only 7 percent of all borough residents are connected to a city water or sewer supply, with the overwhelming majority on well water and septic tanks, Driscoll added.

“We’re at the very, very beginning of this discussion,” she said. “It was always about septage. It’s starting to become more and more about water, too.”

Contact Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.