The contentious plan over what to do with the Legislative Information Office in downtown Anchorage became more confusing Monday night, when the Legislative Council approved spending up to $12.5 million to buy the Wells Fargo Bank building in Anchorage’s Spenard neighborhood.
The decision opens up even more uncertainties about the future of the LIO.
The council started looking at new real estate options after Governor Bill Walker threatened to veto a $32.5 million appropriation for lawmakers to buy the current LIO building on the corner of Anchorage’s 4th Avenue.
In March, a state judge found the council had violated competitive bidding requirements in negotiating renovation work, and ruled that the state’s 10-year lease of the LIO is invalid.
Council chairman Sen. Gary Stevens, R-Kodiak, said that amid a veto threat from the governor he was forced to look for cheaper alternatives.
“That really places me in a very tenuous, very difficult position,” Stevens said by phone from Juneau, adding that its his job as chair to make sure there is office space available for Anchorage legislators to conduct government business.
Stevens sees the Wells Fargo building as the best deal on the table. The bank would rent out the first-floor retail space for its branch. The two vacant upper floors of the 47,000 square-foot building are “move-in ready.” Though he couldn’t provide specifics for how much tenant improvements will cost, Stevens believes they’ll be minimal, and not add much on top of the purchase price.
The council is beginning a 60 day exploratory phase to ensure the building is structurally sound and can accommodate lawmakers’ needs.
“We want to make sure that if we decide to purchase it that it’s a building worth what we’re paying for,” Stevens said.
After talking with Walker’s chief of staff, Stevens was assured the governor would not veto this purchase option, which Katie Marquette, press secretary for the governor’s office, confirmed in an email.
While the purchase price is much lower than the proposal to buy the current LIO building, it’s not clear how much more money the state might have to pay if a lawsuit is filed by the owners of the downtown property.
Amy Slinker, a spokesperson for the building’s owners, declined to say whether they are currently considering suing to recover tens of millions of dollars sunk into the renovation. Asked about the council’s action, Slinker wrote in a text message, “We are reviewing the decision.”
Stevens is not concerned.
“Lawsuits go both ways,” he said. “They could sue us, we could sue them. But the contract we have is void, that’s what the judge has said, so how (are) they going to sue us? Sue us for what?”
Another uncertainty is how much of the $12.5 million approved by the council will go to a commission for the real estate broker facilitating the sale.
On large commercial sales, Wells Fargo typically outsources the job of securing a deal to a broker, explained Joe Everhart, regional president for Wells Fargo in Alaska.
“All I know right now is that the Legislature is interested,” Everhart said. “The legislature is talking to our broker.”
Everhart estimated the commission will be at four to six percent of the sale price, which could mean $500,000 to $750,000 for broker Marc Dunne.
But the commission figure is a “moving target,” according to Dunn. Reached by phone, Dunn declined to provide a range on how much he could make from the sale, saying only that he can “guarantee it’s less than four percent” of the total price.
The Anchorage Downtown Partnership asked the council to keep the office downtown, writing in a letter signed by Board President Gideon Garcia that moving the location conflicts with the city’s long-term planning and zoning goals, putting the potential sale at odds with the state’s own regulatory statute over land use.
Stevens noted that lawmakers have had offices in Anchorage’s Midtown district in the past.
The 14 members of the Legislative Council have to approve the purchase before a contract can be signed.
In other action, the Legislative Council voted to release the late Rep. Max Gruenberg’s papers to his widow, Kayla Epstein. The council also set up a process for releasing a legislator’s records after their death to his or her family.
A lawyer with the legislature’s legal services division advised that Gruenberg’s papers shouldn’t be released under legislative immunity after the Anchorage Democrat’s death in February.
Andrew Kitchenman contributed reporting for this story from Juneau.
Zachariah Hughes reports on city & state politics, arts & culture, drugs, and military affairs in Anchorage and South Central Alaska.
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