To stave off a lawsuit, a joint committee of the Alaska Legislature has voted 13-1 to buy the controversial Legislative Information Office building in downtown Anchorage.
In a Thursday night meeting, the Legislative Council agreed to offer $32.5 million for the building and the land beneath it. It now awaits a response from the owners of the building.
The Legislature’s previous lease for the building, which was recently invalidated in court, was $3.3 million per year for a decade.
The lease covered an approximately 60,000-square-foot building at the corner of 4th Avenue and H Street in downtown Anchorage. It holds office space for 24 Anchorage-based legislators and visiting lawmakers.
The Legislature had leased the building for almost two decades, and the 2015 agreement was deemed an extension to an existing lease, not a new lease, even though the Legislature paid about $7.5 million in “tenant improvement costs” to gut and upgrade the space and the new cost per year was five times the pre-renovation cost.
The resulting cost caused the building to be deemed the “Taj MaHawker” by critics who scorned Anchorage Republican Rep. Mike Hawker’s close relationship with developer Mark Pfeffer.
Critics of the lease went beyond namecalling, filing a lawsuit that said the state violated its contracting rules with the lease.
A judge ruled last week that the criticism had merit and threw out the lease.
The Legislature could face a lawsuit from Pfeffer and the building’s other landlords, who were assured that the lease was legal. To avoid that lawsuit, the Legislative Council is tendering an offer to buy the building.
Among the ‘yes’ votes on the purchase offer was Rep. Sam Kito III, D-Juneau.
“We are obligated to honor the previous commitments of the Alaska Legislature by agreeing to this deal, which will alleviate the need for litigation by any party,” Kito said in a prepared statement. “This is a responsible solution that will provide the state a valuable asset at a significant reduction in the asked price.”
In February, the building’s purchase price was $37.9 million. On Thursday, Pfeffer offered to sell the building for $34 million. The Legislative Council responded with the $32.5 million offer.
Rep. Mark Neuman, R-Anchorage, was the only vote against the proposal.
Anchorage lawmakers could instead move into the state-owned Atwood Building, but the Legislative Council has been reluctant to pursue that option because the Atwood Building would need to be remodeled, and the move might expose the Legislature to legal action.
