Despite rising costs, developer says major downtown Anchorage project on block that once housed the 4th Avenue Theatre is moving ahead

A project to overhaul nearly an entire block in the heart of downtown Anchorage is moving ahead steadily, though not as fast as some Anchorage residents would like.

Peach Holdings has already demolished several buildings on the block, between Fourth and Fifth avenues and F and G streets, including the iconic but long-shuttered 4th Avenue Theatre.

The demolition of the World War II-era theater with its Art Deco-style began nearly two years ago, sparking an outcry from historical devotees and other residents. But there was also resignation that change was inevitable for the deteriorating, long-shuttered building. It was costly to improve and public efforts to save it had failed even before Peach Holdings acquired it in 2009.

Now, with the theater and other buildings gone, the block largely consists of a giant hole in the ground, surrounded by covered chain-link fencing that blocks much of the site from view.

The state of the project has led to questions from Anchorage residents who say they hadn’t heard much about over the last couple of years. Some want to know what’s next at the site. Others are curious about the developer’s efforts to preserve historical aspects of the theater.

The project called for a hotel, housing, office and retail space, entertainment venues and a parking garage.

The project is considered one of the largest-ever investments in Anchorage. Plans released two years ago pegged the cost of the new development at more than $200 million.

Derrick Chang, a member of family-owned Peach Holdings, said this week the costs of the project have jumped to $300 million, in part because of challenges all builders face nationally: Rising costs associated with borrowing, labor and construction materials.

“We are not stopping,” he said. “We continue to work around the challenges.”

The company is currently working on designs for the 4th Avenue side of the block, he said. The designs are based on renderings released two years ago, but some details will change because of the higher costs, such as the overall appearance and size, he said. Peach is also looking to build the development in phases because of the extra costs.

“The vision hasn’t changed drastically,” he said. “The program remains the same.”

Plans for the summer involve ground and site work to prepare for vertical construction, he said.

Dave Whitfield, manager of Current Planning for the municipality of Anchorage, said the developers are moving ahead with aspects of the project at the municipality, including working on water and sewer extensions.

The project involves replatting — the resubdivision of parcels on the block — to prepare for such things as the large parking garage.

Peach is also taking steps to demolish the last standing building in the project, the nine-floor tower on the block’s southwest corner. Built in the 1960s, at 423 G St., it is partly boarded up.

Plans to retain historical elements of the theater remain, Chang said. Those include incorporating aspects of the distinct 4th Avenue facade into the design, and documenting the theater under a project with the National Park Service.

The theater’s beloved murals have been preserved, he said. They will be incorporated into the overall development, though exactly how is not yet known, he said.

[Earlier coverage: A developer is again planning a major new construction project for a downtown Anchorage block. It includes demolition of the 4th Avenue Theatre.]

Peach Holdings will release more information about the project at some point in the future, such as renderings, as details solidify, Chang said.

Only one original building will remain on the block. Peach Holdings does not own the building housing Polar Bear Gifts on the block’s northeast corner.

‘A symbol of hope for downtown’

Peach Holdings has already made a large upgrade on the block.

The company has updated the former nine-story Key Bank Plaza building on the block’s southeast corner, a $50 million-plus effort, Chang said. It is a separate investment from the remaining development on the block, he said.

The gleaming, like-new tower is larger, with new glass skin and an overhanging facade inspired by Alaska glaciers, among other changes.

“It’s a state-of-the-art building with modern systems,” Chang said.

Workers with Santos, the oil company pursuing development of a huge North Slope oil field, have recently begun to move into the building as the anchor tenant, leaving their former digs in the BP building in Midtown Anchorage.

It is a huge moment for downtown, said Jenna Wright, president of the Anchorage Economic Development Corp.

The district has struggled to attract new investment for many years.

“It’s the first new corporate headquarters in a number of years, certainly since the pandemic,” she said. “It will put several hundred employees into downtown, all going to lunch, going to happy hour, going shopping during the holiday season.”

People are eager to see improvements on the rest of the block, but there is optimism, too, she said.

“While it’s not currently the most attractive block in downtown, it symbolizes that something is happening there,” she said. “The developers have done a lot of work demolishing old buildings, and getting the site ready.”

“And while we’re all excited, some us may also maybe a little impatient,” she said.

“But it should be seen as a symbol of hope for downtown,” she said.

The Block 41 redevelopment, as it’s known, has been called the largest private sector investment in downtown Anchorage in several decades.

Bill Popp, former head of the Anchorage Economic Development Corp., said the last comparable effort of this size was the creation of the Performing Arts Center and adjacent Town Square Park on two downtown blocks in the 1980s, part of Project 80s that relied on state money to build public facilities in Anchorage.

It’s an extremely complex project, involving multiple buildings and lots, he said.

It will take time to complete, he said.

“This is not something we have seen in a long, long time,” he said.

Theater loss still stings for some

The loss of the 4th Avenue Theatre is still painful for some people.

David Ramseur, president of the Alaska Historical Society, said in a statement that many Alaskans were “devastated” by the demolition.

“And like many Alaskans, we’re anxious for the current hole in the ground to be filled by a new structure that is appealing and reflects Alaska’s colorful history,” he said. “We understand many of the historic elements of the 4th Avenue Theater have been preserved and may be used in a new structure. That would be well received by Alaskans still bitter about the theater’s demise.”

Sandy Harper, founder of Cyrano’s Theatre Company that long operated near the 4th Avenue Theatre, said it’s difficult for her to pass by the construction site.

“It’s a total void,” she said. “If you walk by it and know about the 4th Avenue Theatre, it makes you feel so sad.”

She said the beloved history of the theater should not “disappear into the mist of memory,” and she’d like to create a museum exhibit about it. It was a treasured landmark and a social mecca for weddings, reunions and other events, said Harper, who maintains a website about the theater.

Officials with the National Park Service’s Cultural Resources Program in Alaska said the developers reached out to them for a project that will allow archival materials to be posted at the U.S. Library of Congress website for the Historic American Building Survey.

The project will consist of special photos taken in 2022 and data from a high-definition laser scan of the theater building, they said. The materials will be added to a handful of historical photos already at the Library of Congress website.

Chang, with Peach Holdings, said architectural renderings as part of that effort are being worked on.

Those renderings will highlight unique design details of the building, said Grant Crosby, a senior historical architect with the Park Service in Alaska.

He said the materials will help people imagine what it was once like inside the theater.

The chance for people to visually engage with the inside of the building is significant, because it had been closed for more than a decade to the public.

“It will give people a far clearer understanding of that building than they could have gotten just by walking past it,” he said.