Landlords won’t get paid despite Alaska Legislature walking away from building lease, judge rules

JUNEAU — A judge has rejected a $37 million damages claim by the former landlords of the Alaska Legislature's abandoned Anchorage office building.

Anchorage Superior Court Judge Mark Rindner, in an April 6 decision, denied the appeal from landlords Mark Pfeffer and Bob Acree.

They had appealed an earlier rejection of their claim by a committee of legislative leaders, the Legislative Council.

The claim came after lawmakers decided to terminate their lease for the downtown building, on West Fourth Avenue, by not setting aside money to pay for it. The lease included a "non-appropriations clause," which allowed the Legislature to back out if it failed to include the necessary cash in the state spending plan.

Lawmakers moved into the renovated building, on Fourth Avenue and H Street downtown, in early 2015.

The building quickly became a target of derision, with critics describing its glass elevators and motion-sensing trash-can lids as symbols of government largesse amid Alaska's budget crisis.

Under the Legislature's 10-year lease, the state's annual payments for the space rose to $4 million from $682,000. Critics branded it with a nickname poking fun at Mike Hawker, the former House member from Anchorage who negotiated the deal: the Taj Mahawker.

In early 2016, another Anchorage Superior Court judge, Patrick McKay, said the 10-year lease — which was technically a lease extension — was illegal and invalid because it evaded competitive bidding rules. Lawmakers then relocated to a building in Spenard, at Minnesota Drive and Benson Boulevard, that they bought for $12 million.

Rindner, in his 25-page order this month, rejected the appeal brought by the landlords' company, 716 West Fourth Avenue LLC.

The landlords now have 30 days to appeal Rindner's order to the Alaska Supreme Court.

Pfeffer, and a spokeswoman for his company, didn't immediately respond to a request for comment Monday.