State could face $28M suit over Anchorage LIO

ANCHORAGE — The state has been threatened with a lawsuit by a bank handling a $28.6 million loan to finance renovations of a legislative office building in Anchorage. Lawyers for the bank say the state must honor its lease agreement for the building, despite a judge’s ruling that found the lease invalid.

In a letter sent to the state’s Legislative Affairs Agency on Tuesday, attorneys representing EverBank said they plan to seek damages of up to $27.5 million if lawmakers abandon the lease or plans to purchase the building, The Alaska Public Radio Network reported.

“EverBank demands that the LAA reaffirm and establish that the Tenant Lease is in full force and effect,” the letter reads, “and cease any and all efforts to invalidate the tenant lease, vacate the property, or secure alternate lease premises.”

A judge ruled in March that the Legislature’s lease of the Anchorage legislative information office violated state contracting rules and should be tossed out. Gov. Bill Walker last month also threatened to veto the $32.5 million purchase of the building if it remained in the state budget, saying it wasn’t “fiscally responsible.”

Alaska faces an estimated $4 billion budget deficit exacerbated by low oil prices.

Lawyers for EverBank argue that the judge’s invalidation doesn’t mean the state is not responsible for upholding the lease agreement it originally signed off on. The letter cites an agreement from December 2014, saying Everbank only agreed to lend funds after the state promised to honor its lease agreement. If the lease is invalid, the letter says, “then each of the express representations made by the LAA were false.”

Lawmakers have also been considering moving the legislative information office to a building the state already owns. The Anchorage Assembly on Tuesday approved a resolution asking legislators to keep the office building downtown, rather than move it to a Wells Fargo building in the city’s Spenard neighborhood.

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