State lawmakers approve $8 million for improvement to Anchorage offices

JUNEAU — What’s old is new, and what’s new is old, which is why the Legislative Council of the Alaska Legislature voted 11-0 earlier this month to spend $8 million renovating its office building in Anchorage.

Two years after the Legislature abandoned a brand-new $44.5 million downtown office building amid legal turmoil, lawmakers are preparing to make the former Wells Fargo building on West Benson Boulevard in Spenard into a more permanent home.

“I think at various times, the Anchorage (Legislative Information Office) situation has been difficult, to say the least, and this was the responsible thing to do,” said Rep. David Guttenberg, D-Fairbanks and chairman of the Legislative Council.

Rep. Charisse Millett, R-Anchorage, was one of a few Anchorage lawmakers on the Legislative Council for the 11-0 vote.

“I think the value for the public is pretty good. It’s not downtown, it’s much more centrally located; you don’t have to fight for parking,” she said. “It’s a bare-bones building, it’s not anything extravagant.”

By the time the latest renovation is finished in summer 2019 by Bauer Construction, the Legislature will have spent more than $24.7 million on the West Benson building. Atop the $11.85 million purchase price and the $8 million in this latest renovation, lawmakers spent $3.7 million to renovate the first floor and the building’s shell. More than $550,000 in additional money has been spent to prepare for this last phase of renovation.

The $8 million allocated for this phase of the renovation, according to this year’s capital budget, is coming from the leftovers of other projects.

The plans for this phase of renovation involve creating what Guttenberg in a memo calls a “functional, yet modest floor plan.”

The second, third and fourth floors of the building will contain 26 legislative offices, two larger offices for the speaker of the House and Senate president, respectively and five offices for non-Anchorage lawmakers who may have to work in the city temporarily.

All of the offices except those for the speaker and president will have natural lighting and space for staffers. Conference facilities will also be available, but there will be no large chamber suitable for a full session of the House or Senate.

Legislators already have individual offices in the unrenovated building, but staff space is shared, which creates privacy concerns, Millett said.

“When we do constituent work, people have PFD issues, people have child-support issues … if they’ve been wronged by a department or feel like they have been, they don’t want to blast that to every office,” she said.

“If we did nothing, it would be embarrassing,” Guttenberg said, calling the office space “not functional.”

Wells Fargo will continue to rent a portion of the first floor, and users of the building’s rooftop antennae will also rent access, earning the legislative landlords slightly less than a quarter-million dollars a year, according to figures from the nonpartisan Legislative Affairs Agency.

The building will also contain space for the state ombudsman and legislative ethics office.

“We moved a couple of state agencies in to take up some of the space, which saved us money and the rent on a couple of other places,�� Guttenberg said by phone.

Guttenberg became chair of the Legislative Council — which performs the Legislature’s work when lawmakers are not in session — earlier this year. By phone from Fairbanks, he said he wanted to see the office situation settled before he left office. (Guttenberg did not run for re-election and will leave office when the new Legislature convenes Jan. 15.)

While not entirely supportive of the West Benson building concept, he said he felt it was the cheapest option available for lawmakers right now.

Two years ago, lawmakers had considered moving into the state-owned Atwood Building. According to a state analysis released at that time, making the space available to lawmakers for 20 years (including renovations) would have cost $24.2 million.

Speaking Tuesday, Millett said lawmakers at the time were opposed to moving into the Atwood building at least in part because it would have meant surrendering some legislative independence from the executive branch.

“We are a separate and equal branch of the government,” she said. “I think some people thought well, maybe we shouldn’t do that.”

Four years ago, construction finished on a new $44.5 million legislative information office building at 716 W. Fourth Avenue in downtown Anchorage. That building was the work of the Legislative Council, then headed by Rep. Mike Hawker, R-Anchorage, and a group of developers led by Anchorage’s Mark Pfeffer.

The Legislature paid $7.5 million up front and agreed to lease the building for 10 years, but Anchorage attorney Jim Gottstein, a Democrat who owns a building near the new tower, sued over the lease, and a judge agreed in 2016 that it violated the law. In the meantime, Pfeffer and the building’s developers filed a claim against the Legislature, alleging that the failure of the lease was the fault of the Legislature.

Lawmakers had considered simply buying the building outright to short-circuit the legal disputes, but Gov. Bill Walker said he would veto the proposal.

A Florida bank foreclosed upon the building in April this year, and it sold a month later for $14 million to the Anchorage Community Development Authority. The Anchorage Police Department is now leasing the building.

Lawmakers are now left with the former Wells Fargo building and lessons learned the hard way.

“I can guarantee you there won’t be any automatic garbage cans in that building. Those kinds of mistakes won’t happen again,” Millett said.

Correction: The Legislature will convene Jan. 15, 2019, not Jan. 22, as stated in a previous version of this story.