ANDERSON -

The city is looking at foreclosing on most of the 26 lots it gave away two years ago as an experiment in community growth.

The mayor blames landgrabbers' starry-eyed expectations clashing with the reality of building a house in rural Alaska. A councilwoman thinks the experiment failed owing to too few jobs in the city of less than 300 people located off the Parks Highway about 75 miles southwest of Fairbanks.

"I think there were people who wanted to relocate but didn't realize the logistics of building out in the country," Mayor Keith Fetzer said. "They had this dream, 'Oh my God, I'm getting free land.'"

They came from all over the country and stood outside city hall in below-zero temperatures to claim their piece of Alaska. The city doled out land on a first-come, first-serve basis, distributing 26 lots.

The lucky 26 each put down a $500 deposit. They were given two years to built a house - not a cabin - after which the city would return the $500. Three houses went up, and a bed and breakfast is under construction. The owners of three more lots have asked the city for more time to build. One lot was turned back over to the city. Eighteen face foreclosure.

One of the three homeowners said he plans to walk away from his house, a manufactured home that apparently does not meet building standards required by his finance company. The man declined to provide his name.

Some of the people who paid their $500 to acquire land have not

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been seen or heard from since, according to the Anderson municipal clerk. A few reportedly are angry that the city was slow to put in roads at the new neighborhood, called the Northern Lights Subdivision.

Julie and Chip Morris hope to be a success story.

They were living in Juneau when they heard about the land giveaway on Fox News. "I said, 'Where the hell is Anderson?'" Julie, 49, said. "So we got out a map and we looked it up. I looked at my husband and said, 'You've got to go.'"

"We had just enough air miles," Chip, 47, said.

Julie is a school teacher. Chip is a plumber and commercial fisherman. They have five grown children. Chip flew to Fairbanks, picked up his son at the University of Alaska Fairbanks and stood in line for two days.

"They froze their butts off," Julie said.

By mid-August of this year, they had their more than 4,000-square-foot structure framed and were putting on a roof. The B & B will have six bedrooms and six bathrooms.

Julie said it's been her dream for years to run a B&B. She already has a name in mind, the Homefire Country Inn.

"I never thought I'd be able to do it," she said. "This last summer, I've seen things come together that I've been hoping for my whole life."

The place is a quarter-mile from a view of Denali. They hope to hold a grand opening in the spring. "You live in a state as big as Alaska, you can't see it all unless you go live there," said Chip. "We always knew we were going to leave Juneau. We just didn't know when. The deal is, when we get a chance, I get to buy an airplane."

"That's way down the road," Julie said.

The couple live in a rented apartment in Anderson but plan to move into the B&B soon. Their house in Juneau is still for sale.

"This is the smallest town I've ever lived in," Julie said.

The idea for the land giveaway came from Daryl Frisbie's government and economics class at the Anderson High School. The class did research and lobbied the City Council to try the experiment. It was part of a larger development plan for the city, Frisbie said. The teacher has since moved to the larger Parks Highway community of Healy.

"We went in with high expectations, and obviously those expectations were not met," Frisbie said. "We had a blast. It was 20 minutes of fame my students will never forget. I would encourage the city to go for something like this again and just learn from the mistakes that were made the first time."

The mayor said the city probably will sell the 19 lots. The giveaway caused property values in Anderson to freeze, an unintended consequence that Fetzer thinks is temporary.

"It didn't quite hit the expectations we all thought," Fetzer said. "You go into something with maybe unrealistic expectations."

City Councilwoman Karen Southwood agreed.

"I think it was a good experiment," she said. "Obviously, it was not successful."

Southwood said the building requirements for the houses probably were too strict. No trailers were allowed and outhouses were forbidden. The homes had to be at least 1,000 square feet.

She added that there aren't enough jobs in Anderson to support a slew of new families.

"There are not many places for people to go and make money," Southwood said.

Still, she is thrilled about the bed and breakfast, which she thinks might make the experiment worthwhile. "

Ideally, we'd have 30 new families in the community," Southwood said. "If we just got the bed and breakfast out if it, that's a good thing."

The city clerk said she stills gets regular calls, letters and e-mails from people interested in acquiring free land.

To contact the Newsroom, call 907-273-3186.