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Anchorage officials ask Assembly for more money to fight port lawsuits

Tegan Hanlon
Horizon Lines dock cranes stand atop pilings, many of which are in the process of being reinforced, on Monday, August 11, 2014, at the Port of Anchorage. ERIK HILL / Alaska Dispatch News

With no end in sight to ongoing lawsuits over the botched Port of Anchorage makeover, city officials are asking the Anchorage Assembly for permission to spend up to another $1.5 million on lawyers and legal fees. 

The city hired Seyfarth Shaw LLP, an Outside firm, to fight legal battles over the port expansion project that cost more than $300 million and resulted in the partial construction of an unusable new dock. This summer, the city has essentially started the project over and will present a new design in November to revamp the 53-year-old port. 

“We spent over $300 million and really have nothing to show for it,” Bob Owens, an assistant municipal attorney, said Friday at a special Assembly meeting.

In an effort to recover money already spent, the city filed a lawsuit this year against the U.S. Maritime Administration, or MARAD, charged with overseeing the port expansion. In 2013, it sued the project manager, Integrated Concepts and Research Corp., and engineering firms CH2M Hill and PND Engineers Inc.

"MARAD wasted a lot of one-time money," Owens said. "We're now at the point where we have to spend substantial funds to take care of stabilizing and demolishing what's there in order to protect existing municipal property and avoid personal injury potential." 

The Assembly initially approved a $500,000 contract with Seyfarth Shaw in July 2012. That amount was increased to $2.5 million by January 2013. Now the money is nearly gone, according to a recent memorandum from Anchorage Mayor Dan Sullivan.

“Right now, we need to make sure we have the resources available to pursue the claims,” Municipal Attorney Dennis Wheeler said in a recent interview with Alaska Dispatch News. 

On Tuesday, the Assembly will consider bumping the law firm's total contract to $4 million, giving it authority to spend $1.5 million in additional money.

The memorandum says the law firm should not spend more than $600,000 during the remainder of 2014. That money will come from the pool of remaining funding allocated to the port project, Wheeler said. The city will ask for the additional $900,000, if necessary, during the annual budget process in 2015, he said. 

Wheeler said the city has asked for the contract increases in installments over the past two years because it was unclear if either of the lawsuits would be resolved early.

Bennett Greenberg, construction attorney with Seyfarth Shaw, said Friday that MARAD filed a motion to dismiss the lawsuit in July. The city will file its response next week.

The other lawsuit against the three private companies may expand, he said. CH2M Hill and ICRC have filed a motion to allocate fault to parties not currently present in the suit.

In both cases, Greenberg said, the law firm is waiting for the court to set hearing dates.

“There’s obviously a lot of moving pieces going on,” he said.

Wheeler said that between the two lawsuits,  "we think the damage claims may be in excess of $300 million." As the contract stands, the city would retain all damages awarded.

If the Assembly votes against the contract increase Tuesday, the law firm would have to stop all work once the remaining funds run out. The city pays the attorneys an hourly rate, Wheeler said. 

"We'd have to figure out what Plan B is going to be," he said.