City's troubled SAP project may move to Sunshine Plaza building downtown

Anchorage's SAP data systems upgrade project may soon be headquartered at the bright yellow Sunshine Plaza downtown.

Mayor Dan Sullivan's administration is proposing to lease two floors of the Fourth Avenue building as officials seek to get the SAP project, a complex overhaul of the city's financial system marked by missed deadlines and cost overruns, back on track.

Under the proposed agreement, the city would pay $11,304 per month to lease the space. The lease would start July 1 and last 18 months, with options to extend up to another six months.

As many as 120 city employees, contractors and project managers would be working in the building at a time, said chief fiscal officer Kate Giard. She said a recent increase in staffing requires more space, and it's more efficient to concentrate resources under the same roof.

"The bottom line on the lease -- to get this thing done efficiently and effectively, you have to put developers and contractors and MOA people in one space, and tell 'em to get 'er done," Giard said.

The Anchorage Assembly needs to approve the proposal. Giard also said Assembly action would simply give the city authority to complete the deal, and no further action would be taken without checking with incoming mayor Ethan Berkowitz first.

"We would certainly welcome his comments on this," Giard said.


Further development of the SAP system has been on hold since November as the city brought in experts for two separate evaluations. Giard said the project is scheduled to resume around June 1 with a revised work plan and a new senior project management team.

Assembly member Elvi Gray-Jackson, a critic of the SAP project, said Wednesday she had hoped the city would be able to find space in a publicly owned facility like the Egan Center.

"Maybe that wouldn't cost us as much," Gray-Jackson said. "But here we go."

At the privately owned Sunshine Plaza, the city would be occupying space vacated this year by the state Pipeline Coordinator's Office, an office within the Department of Natural Resources. Giard said the first floor would be dedicated to training about 2,300 city employees on the new SAP software in shifts.

Giard said the administration tried unsuccessfully to find space already owned by the municipality before reaching out to the private sector. She said SAP project staff had been spread between the Fire Training Center on Airport Heights Drive and downtown.

Giard said there are no plans to buy new office equipment. She said the city is looking to borrow or lease surplus office equipment from the private sector or the Anchorage School District.

The SAP project has cost $36.5 million to date, which includes city labor. The Sullivan administration is asking the Assembly to approve an additional $21.6 million short-term loan to cover costs that include external contractors, software upgrades, equipment and project accounting.

In April, a consultant told Assembly members the project would cost a total of $73.3 million to complete, city labor included.

Devin Kelly

Devin Kelly was an ADN staff reporter.