Portions of the defunct 4th Avenue Theatre would be incorporated into a downtown Anchorage complex that would include a pedestrian shopping galleria, parking garage and skyscraper in a proposal that Peach Investments, owner of the theater and adjacent properties, plans to present to the Anchorage Assembly.

Chris Beck of Agnew Beck Consulting said the new Peach Tower, across Fifth Avenue from the Alaska Center for the Performing Arts, would be 28 stories high and include a hotel, residences and multilevel parking. The atrium-like shopping galleria, connecting Fourth and Fifth avenues, would be in the space now occupied by the Reed Building.

Beck said the redevelopment project would restore or re-create the facade of the theater and endeavor to retain elements of the lobby, including the woodwork depicting Alaska scenery. But the former auditorium space and its unique murals depicting Alaska industry of 70 years ago -- gold mining and riverboats -- would be a different matter.

"The harsh reality is that the interior has been stripped of its seats and is now an empty box with serious leaking and mechanical problems," Beck said. "It's not practical to re-create it as a theater. Ideally, we would hope to remove the murals and find a new home for them, if possible." He stressed the last two words. "But technically, that would be a real challenge. They're built in and they're huge."

The project itself will probably not fly without a tax break, he said. The owners hope to convince city officials that the property qualifies for "deteriorated area status" under chapter 12.35 of the municipal code. If so designated, the property would be taxed at its current "deteriorated" level for 10 years, rising to the full assessment of the redeveloped property after that.

In the case of what Peach Investment is calling the "4||5" project, the current property taxes are $235,000 per year. If the plan is completed, the property taxes would be $1.5 million to $2 million starting around 2026, Beck said.

Beck said the process would begin with an ordinance designating the area as "deteriorated" at the Assembly meeting on Tuesday.

The multistep process would include demolition of the derelict Northern Lights Hotel in Midtown Anchorage, which Peach Investments also owns. Demolition would have to be complete by Dec. 31, 2017. Presumably a new building or buildings would go up at that site.

"This will only be practical if the city acts as a partner," Beck said.

He noted that ambitious downtown redevelopments in Seattle, Portland and elsewhere were the result of such partnerships. Peach Investments would seek the kind of agreement with the city used in those cases to remove uncertainty and political vagaries before moving ahead. Beck said the downtown project would cost $150 million to $200 million.

In comparison, the building at 188 W. Northern Lights, also owned by Peach Investments, would cost around $40 million, he said.

Peach Investments is owned by Joe and Maria Fang, whose sons Terrance and Derrick Chang live in Anchorage. Among the corporation's other properties is the One Kearny development in San Francisco, which Beck described as a model for redeveloping a historical area.

The downtown project would be "a large-scale development on a scale maybe never seen in Alaska," Beck said.

"It's a chance to revitalize downtown, which has seen very little private investment in the last 15 years," he said. "Downtown is hurting, unsafe. There are a lot of boarded-up storefronts. But there are surveys that show employees want to live downtown. People are looking for a place, not just a house.

"This can be a catalyst for real transformation of the city. What's at stake is the future of downtown."