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Lawmakers say they need more information before vote on Anchorage offices

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  • Updated: September 28, 2016
  • Published December 4, 2015

A committee of state House and Senate leaders on Friday postponed a decision on whether legislators should stay at their expensive renovated Anchorage offices or move into other state-owned space downtown.

During its afternoon meeting, the Legislative Council — made up largely of members of the Republican-led House and Senate leadership — instead spent two hours poking holes in an analysis of options, questioning Sen. Gary Stevens, R-Kodiak, and legislative staff about the report's assumptions.

They asked about its time horizon, why it didn't adjust prices for inflation, and whether it left out information about lost revenue from a state-owned parking lot next to the Atwood Building if the Legislature decides to move there.

"If we're going to start talking numbers, we ought to include them all," said Rep. Craig Johnson, R-Anchorage.

Stevens, who chairs the 14-member Legislative Council, unveiled the report this week. It said it would cost at least $43 million to buy the Legislature's current Anchorage office building on Fourth Avenue, while moving into the Atwood Building a few blocks away would cost $10 million over the same 10-year period.

Stevens said before the meeting that he hoped the committee would pick an option to send to the full Legislature as a budget recommendation when the legislative session starts in January.

But lawmakers instead postponed a vote following a closed-door executive session in which they discussed a citizen lawsuit challenging the lease for the renovated Fourth Avenue space, as well as the potential cost of a lawsuit that could be filed by the building's developers if the Legislature chooses to break the lease and move to the Atwood Building.

Even before the executive session began, Stevens expressed his frustration that a decision could be postponed, saying,: "We can keep fighting and arguing and kicking this can down the road."

"I'm really concerned about those timelines and I think it really puts us under the gun," he said.

Stevens has been studying the Anchorage office space since April, when the same committee decided to explore a purchase of the Fourth Avenue building rather than break the lease and try to move to the Atwood Building.

The no-bid, 10-year lease extension left the Legislature paying $4 million in annual rent, up from $680,000 last year before the renovations, and some lawmakers have said they think that could be too expensive when they're trying to make budget cuts to help close a $3 billion deficit.

The Fourth Avenue building, with its glass walls and twin glass elevators, has been dubbed the "Taj MaHawker" by critics, after Rep. Mike Hawker, R-Anchorage, who negotiated the lease. Recent filings in the citizen lawsuit included emails showing Hawker working closely with developer Mark Pfeffer to make the deal fit within state procurement law.

The Legislative Council includes some of Hawker's close allies in the House majority leadership, but Stevens' own colleagues in the Senate also questioned the credibility of his report.

Sen. Peter Micciche, R-Soldotna, said he wants the Legislature to end up in the space where it's paying the lowest rate. But he and others said they weren't sure whether the report, which accounted for the legislative offices' "usable square feet" and left out elevators and bathrooms, offered a fair basis for comparison to the costs of other spaces.

Micciche asked if Stevens was thinking about setting up a task force to get "better numbers."

"I'm not sure that we've looked at all those scenarios," Micciche said.

Other lawmakers wanted more information about the lease rates paid by state agencies that could move into the Atwood Building if the Legislature doesn't.

A document distributed at the meeting showed those costs through 2017 but Johnson asked to see lease rates that would be paid in 2018, since that's when the Legislature would be in the Atwood Building.

Rep. Sam Kito III, D-Juneau, the only Democratic minority member on the committee, pointed out that nearly all of those agencies' costs were below $2.70 a square foot, compared to the $7.41 that Stevens' report says the Legislature is currently paying for each usable square foot in the Fourth Avenue space.

Using the Atwood Building, Kito said, would save "a significant amount of money."

"At this point, to me, there's not a comparison because we're paying so much more," said Kito.

In an interview after the meeting, Stevens said his office did "the best we could" in writing its report.

"People have some important questions about the ramifications of what we might or might not do," he said. "I think they're all honest questions — everyone is approaching this with good will."

The committee will meet on Dec. 19 to consider its options again. Stevens said he is anxious about the delay, but he added, "We don't move fast."

"This is the Legislature," he said.

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