Wasilla considers paying Lowe's $350,000

JOEL DAVIDSON

Frontiersman reporter

WASILLA -- As giant retail box stores proliferate in Wasilla, the city's traffic problems continue to compound. One city council member called Wasilla a "traffic snarl" and city officials are scrambling to find solutions before the situation causes a major accident.

In a spirited meeting Monday night, several council members argued that stores like Home Depot and Lowe's should be required to pay for additional traffic lights on conjested roads due to the fact that their stores impose heavy traffic burdens on the city's existing facilities.

They argued that the city shouldn't use taxpayer dollars to help multi-billion-dollar corporations create easy customer access to their stores.

Mayor Dianne M. Keller and several members of her administration, however, argued that Wasilla has a responsibility to help the large retailers with the cost of constructing traffic lights near their stores, regardless of whether Wasilla has any legal obligation to do so.

The debate Monday night focused on whether the city should help Lowe's with the cost of constructing a traffic light at the intersection of Hermon Road and the Parks Highway, near Mat-Su Cinema.

According to Keller, the Alaska Department of Transportation told Lowe's the light would cost only about $200,000. Recently, however, that price has nearly tripled and Lowe's, a company that rang up more than $30 billion in sales last year, is now asking the city for financial assistance.

Keller said it wasn't fair to make one business pay for a traffic light other businesses will also benefit from. She argued strongly in support of an ordinance allowing Wasilla to pay half the price of the traffic light, a financial contribution that could cost the city as much as $350,000 out of its capital-improvement funds.

Under the proposed ordinance, Lowe's would pay the total cost, up front, and then receive reimbursement of 20 percent of its sales tax, which would be returned in quarterly payments from the city. The payments would continue until the city paid half the estimated $676,000 cost or reached its contribution limit of $350,000.

According to DOT spokesman Rick Feller, Lowe's is currently under legal contract with DOT to pay the entire cost for a permanent traffic light, equipped with right-turn and side-street turning lanes.

Feller said he didn't know why the cost of the traffic light was so much higher than what DOT had originally quoted Lowe's, but he did say Lowe's had a financial responsibility to pay for it.

"There is an agreement between DOT and Lowe's," he said. "It is signed and sealed, saying that Lowe's will cover all the costs of turn lanes and signals."

Feller said the costs can be seen as development fees.

"This kind of development has a direct impact on the state highway system and whenever there is an impact on our infrastructure we assess a fair impact fee for developers," he said.

Despite the fact that the city has no legal obligation to pay for the traffic light, Keller and Ron Single, the city's recently hired economic development director, expressed concern about the possibility that the council members would not support the agreement with Lowe's.

Single cautioned council members that the city might appear unfriendly to potential developers.

Wasilla Public Works Director Archie Giddings said in a phone interview that the city had planned to install a traffic light there for quite a while.

"We wanted a light there before Lowe's ever showed up, but DOT said there wasn't enough traffic to justify it until Lowe's put it over," Giddings said. "DOT said private development caused the need for a light, and private development must pay for that need, but we were willing to pay for a light before Lowe's ever showed up."

According to Giddings, Lowe's was "sticker shocked" upon learning that the price of the light was outside its original budget, and the company wanted the city to help. Giddings noted, however, that the light would benefit Lowe's by creating easy customer access to its store.

"It's an improvement they want, no doubt," he said.

Council Member Mark Ewing agreed that the city desperately needs a traffic light at the intersection of Hermon Road and the Parks Highway, but he expressed concern that $350,000 is a hefty financial burden on the city.

"It's a good idea to have the light there, but I think we are setting a precedent for the next time a business asks us to pay for their stoplights," he said.

Keller agreed that the city was setting a precedent, but she said it was a good precedent; one that demonstrates Wasilla is pro-industry and friendly to future economic developments.

She framed the ordinance as an economic incentive for businesses.

When Ewing asked if the city had ever before agreed to erect traffic lights for any other businesses in Wasilla, Keller said the Lowe's agreement is the first of its kind between the city and private industry.

Similar financial partnerships for constructing traffic lights could occur in the near future, however, depending on how the city council decides to approach the issue.

Giddings said the city is already holding discussions with other major developers, including Home Depot, which asked the city to help pay for a traffic light near its store that could cost as much as $1.2 million.

Council Member Noel Lowe expressed concern about these types of future agreements.

He said the city needs to have a clear vision and approach to economic-development incentives before it starts paying for traffic lights.

"We need to have a conversation about what our economic development approach is," he said. "I want to know if this administration is going to build stop lights as an economic-development incentive."

Council Member Robert Sande said the administration cannot justify the traffic-light expense as an economic-development incentive because Lowe's and Home Depot have already built their stores, hired employees and committed themselves to doing business in Wasilla.

"This is acting retroactively," he said.

The council voted unanimously to postpone any action on the proposed ordinance until it has a chance to discuss both Lowe's financial obligation to build a traffic light and the city's willingness to provide financial assistance. The next scheduled meeting is 7 p.m., Dec. 13, at Wasilla City Hall.

Contact Joel Davidson at joel.davidson@frontiersman.com.