JUNEAU -- The Alaska Senate Finance Committee is proposing to strip funding from the Legislature's lease for its newly remodeled Anchorage offices, forcing legislators and their staff to move to another building owned by the state.
The state would save some $3.4 million a year -- and $33.5 million over the life of the pricey lease -- if the Legislature moves into the Atwood Building in downtown Anchorage, according to documents attached to a state budget amendment submitted at a finance committee hearing Thursday.
The state's existing lease for its remodeled office building runs for 10 years.
Sen. Pete Kelly, R-Fairbanks, proposed the budget amendment. It passed without objection.
The budget, however, still has to pass the full Senate and also needs to be reconciled with an earlier version passed by the House. House members may be less likely to support the plan to move the Legislature's Anchorage offices since the current lease for their remodeled building was negotiated by one of their colleagues, Rep. Mike Hawker, R-Anchorage.
Critics have derided the remodeled building as the "Taj Mahawker."
The Senate's proposal doesn't imply the Legislature is being cheated in the remodeling and it isn't an attempt to get the building's developers, Mark Pfeffer and Bob Acree, to lower their price, said Sen. Gary Stevens, R-Kodiak, who's been reviewing the lease.
Stevens chairs the Legislative Council, the committee of House and Senate members that deals with the Legislature's internal business and budgets. Hawker had been the chairman in the previous Legislature.
"It's a beautiful building. It's first class," Stevens said in an interview, referring to the Legislature's office space on Fourth Avenue. "The question in the end is: Should we pay for a Cadillac when we could pay for a Ford?"
The Legislature's lease with Acree and Pfeffer is subject to lawmakers appropriating money to pay for it.
"Does that mean that we cannot be sued? No," Stevens said.
Pfeffer didn't return a phone message Thursday. In a prepared statement sent by a spokeswoman, Pfeffer said the developers had worked "above board, diligently and cooperatively to deliver public building space that provides accessibility to all Alaskans."
"After delivering the facility as requested, we are disappointed that the committee now chooses an alternate direction," the statement said. "We believe that breaking agreements and financial commitments potentially impact the state's credit negatively, and therefore should be carefully considered. We have offered several ways to work with the Legislature to look for cost savings and hope that through the upcoming budget process, the Legislature will consider the commitments they made and choose to find a solution that works for all parties."
The Legislature's lease for its Anchorage offices -- which can house about half of the state's 60 senators and representatives -- spiked to $4 million per year from $682,000 when members moved back into the renovated building in January.
Hawker negotiated the no-bid lease for the offices after the Legislature searched for new space for more than 10 years.
A commercial real estate broker unaffiliated with the Legislature says it's paying two or three times as much as it would for comparable space elsewhere. Hawker has said there was no other property that could offer a competing proposal and a state appraiser found that legislative offices are too specialized to be compared to other spaces.
The renovated building is glass-skinned, with two glass-walled elevators on the outer edges. Toilets are in rooms, not stalls, and bathroom trash cans -- with a listed price of $200 each -- have lids that automatically open and close with the wave of a hand.
Stevens said he was reviewing the lease in light of the state's multibillion-dollar budget deficit, with the Senate Finance Committee proposing 10 percent cuts in unrestricted general fund spending on state agencies.
"Almost every aspect of our budget has been touched," Stevens said. "And the question is: How much of a cut do we want to take to the Legislature itself?"
The Senate Finance Committee's budget plan would cut the Legislature's budget by 7 percent, or $5.7 million. That figure includes $1.4 million in savings from the proposed move to the Atwood Building.
The amendment passed by the committee Thursday funds the lease for the renovated building through the end of January. Then, the Legislature would move into the Atwood Building after the end of their 2016 session in April.
All options are still open, however, when it comes to the Legislature's Anchorage space, Stevens said. That includes remaining in the renovated building or even buying it, though that hasn't been explored recently, he said.
Those options will be examined and debated during the conclusion of the Legislature's budget process, with its three-month session currently scheduled to end April 19.
Following the finance committee's passage of its budget Thursday, the full Senate must approve the package, which will likely happen Friday. Then, members will have to negotiate with the House, which already passed a budget that includes full funding for the existing lease for the Legislature's Anchorage offices.
It's unclear how hard the House will fight to stay in the renovated building, if at all, but Stevens acknowledged "lots of differences of opinion on what we should be doing." A staff member for Hawker said he wouldn't comment on the Senate's proposal.
House Speaker Mike Chenault, R-Nikiski, said in a Thursday morning news conference that he didn't know much about the plan and would wait to see what the Senate proposed.
"We've got to look at it and vet it and see what we think is the best thing," Chenault said.
After the plans were discussed in a closed executive session of the Legislative Council, Chenault declined to comment further.