(Juneau Empire File)

Opinion: New City Hall proposition comes down to dollars and sense

Soon, Juneau voters will be receiving ballots in their mailboxes for the 2023 regular municipal election scheduled for Oct. 3. This election will be watched closely for several reasons.

The ballot features the second attempt by our Assembly to pass a bond partially financing the construction of a new City Hall. In addition, dissatisfaction with past Assembly actions has generated a record number of candidates competing for two open Assembly seats as well as challenges to two incumbents.

With the idiosyncrasies of vote-by-mail elections unilaterally imposed upon Juneau residents by the Assembly in 2022, we may not know election results until weeks after election day. The lack of transparency and opportunity for fraud inherent in vote-by-mail systems only adds to the distrust many people have with government and will remind voters how this Assembly has ignored community concerns by conducting their business with minimal regard for public process.

Voters need look no further than these recent examples:

• Unwarranted, contentious and exorbitant increases in property taxes

• Non-disclosure of emails constituting public testimony

• New city manager selection held almost entirely in secret

But the most glaring example of lack of transparency is the Assembly’s dogged pursuit of a brand-new City Hall and their appropriation of $50,000 to advocate for it. The re-introduction by the Assembly of a previously failed City Hall proposal without engaging the electorate or considering any modifications is inexplicable. The location and design remain unchanged with a $2 million increase in cost. It’s essentially identical to their 2022 failed effort, but with a reduced bond amount and higher cost.

There’s no logical reason to present this to voters again unless, now unconstrained by the requirement to remain neutral (having passed an ordinance allowing an advocacy campaign financed by your tax dollars), the Assembly is free to play fast and loose with the facts.

That is exactly what is happening.

Apparently, city leaders hope no one will dive into the numbers, but instead accept their figures at face value.

During a Chamber of Commerce presentation on Aug. 24, City Manager Rorie Watt outlined the purported financial benefits of a new City Hall.

• In three years, CBJ will avoid spending over $1.1 million annually on rent and approximately $14M in repair and replacement costs.

• In 32 years, cumulative savings will exceed $43.3 million when the project would break-even.

• CBJ will save $200 million+ in 70 years.

There is no independent third-party evaluation supporting these alleged financial savings. We only have the city-sponsored economic analysis, by Rain Coast Data in March of 2022, that had sharply different conclusions. That study assumed a project cost that was $5 million less ($38.2 million) and a bond amount that was $2 million lower ($25 million) than is currently proposed, with minor differences in bond rate and amortization.

Despite that, the city has now lowered the project break-even point to 32 years, 20 years less than the 52-year break-even provided to voters just last year. Furthermore, net savings over 70 years of $200 million has been grossly inflated from the $33 million reflected in last year’s analysis.

Voters should ask themselves: how did the city magically concoct a 500% increase in savings and an artificially low break-even point? Apparently by fiddling with their in-house modeling tool, assuming much higher projected rents, and conveniently omitting the hundreds of millions of dollars the $16.3 million down payment would earn after 70 years.

Beyond these financial shenanigans, voters should question the underlying assumption that the city needs brand-new office space for every employee.

The pandemic permanently changed the office landscape. State offices are shrinking, commercial vacancies are increasing, rental rates are falling (not increasing as CBJ would have you believe), and employers are transitioning to a hybrid work environment that increasingly allows work-from-home.

Ignoring these facts by adding another 46,200 sq. ft. of office space to downtown Juneau is not a solution. A better approach would be to explore future possibilities as more vacant office space opens up and/or evaluate re-purposing under-utilized school buildings.

Before filling out your ballot, ask yourself, are we really getting the facts on the City Hall project?

The dollars don’t add up.

Will voters be swayed by spin or common sense?

• After retiring as the senior vice president in charge of business banking for KeyBank in Alaska, Win Gruening became a regular Opinion Page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.

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