ANCHORAGE — Lawmakers are a step closer to moving out of office space in Anchorage that costs $4 million to lease.
The Legislative Council voted Saturday to recommend that lawmakers pull funding for the lease, while also carving out 45 days to try negotiating a competitive purchase price, the Alaska Dispatch News reported.
The office space was renovated and priced almost six times more than what had been a $680,000 lease.
This year, lawmakers expect a $3.5 billion state budget deficit.
Developer Mark Pfeffer said he was willing to drop his asking price by $1 million from $36 million.
“We know you need to save money,” Pfeffer said. “We believe there are reasonable ways to do that.”
A spokeswoman for Pfeffer said in a statement that they believe it’s possible to save state dollars without breaking the lease, which she called a drastic step.
A legislative attorney estimated a possible lawsuit over breaking the lease could cost $2 million. An ongoing lawsuit challenges the legality of the state’s no-bid lease extension following the renovation.
Cost estimates vary for buying the renovated offices versus moving into the state’s Atwood Building. One estimate by state debt manager Deven Mitchell says Alaska could generate a $1.2 million return in 10 years by buying the building through a particular type of financing.
Another report, this one by the office of council chair Sen. Gary Stevens, R-Kodiak, said moving could save $2 million in comparison to buying the renovated space.
Stevens’ office previously estimated moving would cost $30 million less over the course of a decade than buying the renovated building.
