City considers KEDC proposal for partnership, affordable housing development

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Kodiak’s City Council is considering a request from the Kodiak Economic Development Corporation to join forces and jumpstart economic activity on the island. The corporation’s board members and staff pitched the idea at Thursday’s city council work session.

The Kodiak Economic Development Corporation – also known as KEDC – was established back in March of 2020 as a way to hand out COVID-19 relief money to local businesses. Since then, it’s been designated as a nonprofit, established a board of directors and hired a part-time project manager. 

But in order to keep growing, the organization needs more money. KEDC asked council members on Thursday for $150,000 in city funding annually for the next three years. The bulk of that funding would go towards hiring a full-time executive director, and the organization proposed entering into a public-private partnership with the city of Kodiak as part of its expansion. 

The Kodiak Economic Development Corporation proposed a public-private partnership with the city as part of its funding request at Thursday’s work session (Photo: KMXT)

“What we’re really asking here I think is that the city help us bridge this sustainability gap that we have for the first three years in order to get an executive director position off the ground to establish those key programmatic and financial resources, and to carry forward a long term future for KEDC and economic development in the community,” said Greg Zadina, a KEDC Board member.

KEDC has outlined a number of areas of interest for economic development in Kodiak – including worker retention and workforce development, and investments in the island’s mariculture sector.

Zadina said KEDC plans to diversify its funding sources over the next several years as it expands.

“Over time, the strategy then is to decrease that pie slice from the city,” he said.

The funding was one of two requests the organization presented to council members. The other was for the city to help KEDC establish a nonprofit community land trust to help ease the island’s housing shortage.

In that model, the trust would own the land under a building, while a homeowner or developer would own the housing unit itself. When a home is sold, the cost of the land and site development is taken out, lowering the overall purchase price of the home. 

Mallory Arnold, KEDC’s project manager, told council members the model would help first-time homebuyers – and bring much-needed workers to town.

“Our goal is to make that affordable for the workforce that is coming in so we can attract the nurses, the teachers and the welders of Kodiak,” said Arnold.

KEDC has outlined three potential sites that are owned by the city to build duplexes – on Selief Lane, Larch Street and a plot on Near Island. The Larch Street property is co-owned by the borough. Arnold said a four acre lot can fit 18 duplexes, or 36 units, in KEDC’s preliminary plans.

Kodiak isn’t the first to look at a land trust to ease its housing woes; Sitka also has a community land trust, with several below-market value homes already sold and occupied by new homeowners.

Councilmembers and city staff were receptive to both requests but noted that there’s a lot to work out with each. There are also some issues with the land identified by KEDC, according to city officials, like aging infrastructure that may not support additional units. 

Kodiak Mayor Pat Branson said she liked the land trust idea, but the annual funding request seemed like a better place to start.

“That’s what I would like to focus on, as well as the public-private partnership – how is this going to work? What are the details? Sometimes when you have a partnership, it goes awry, and we wouldn’t want that to happen,” said Branson

Branson also noted that the city has no economic development arm and said she hopes to include KEDC’s funding request in upcoming budget discussions for the next fiscal year. 

Thursday’s presentation was part of the council’s work session, so no action could be taken. Councilmember John Whiddon is on KEDC’s Board of Directors; he was present at the work session, but did not participate in the presentation or conversation.

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