Anchorage Daily News

PALMER -- Bonds to finance construction of the state's largest prison were approved by the Matanuska-Susitna Borough Assembly on Tuesday, bringing that project a step closer to construction.

Bids to design and build the 1,536-bed men's prison at Point MacKenzie will be turned in Sept. 25, borough purchasing officer Russ Krafft told the Assembly. Three design-build teams are competing for the project: Cornerstone and J.E. Dunn, joint venture; Hunt/Lydig and Kiewit Pacific Co., joint venture; and Neeser Construction Inc.

The borough Assembly authorized selling up to $275 million in lease-revenue bonds, although borough finance director Tammy Clayton said it's likely only $258 million to $259 million actually will be sold.

The state law that authorizes construction of a prison in Mat-Su limits the total annual debt load per bed to $11,600. Clayton said the per-bed debt payment depends on interest rates, so the total amount of bonds sold could increase if interest rates drop before the bonds hit the market in six weeks.

The bonds will be repaid by the state over 25 years, starting with a $17 million payment in March.

The construction cost is pegged at $219.6 million. It's less than the total bond amount because a portion of the bonds sold will repay the borough for out-of-pocket expenses, Clayton said.

The actual construction cost won't be known until the project bids are opened. Krafft said the design-build teams know the construction cost limit and have been asked to submit cost-cutting measures, each of which must be approved by the state Corrections Department, to keep under $220 million.

The winning proposal will be selected Oct. 24. Krafft said a public hearing to approve the funds and set the project in motion would be held Dec. 2.

Construction is expected to begin in early 2009 and wrap up in early 2012. The borough estimates the prison will employ 350 workers with an average salary of $48,000 after it opens.

Find Rindi White online at adn.com/contact/rwhite or call her in Wasilla at 907-352-6710.

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