The owner of the Juneau office building known as the “Plywood Palace” is disappointed the state is looking at leasing space elsewhere, but says they’re still looking at making improvements to the building.
“We’ve always respected the state’s right at the end of the lease that expired June 30 to move out of the building,” said Patrick Holmes, representing the building’s owner, Juneau I, LLC.
The biggest problem, he said, is they don’t know what is causing problems for the Department of Labor & Workforce Development employees who work there.
“I think what’s been shown through numerous tests there just doesn’t appear to be an issue with mold in the air,” he said.
Juneau I, a company owned by Patricia Blomfield, owns the building on West Eighth Street. Holmes represents Juneau I locally.
The building got its informal name due to it is original plywood sheathing, but Holmes said it was replaced with steel several years ago.
State leasing managers say they have ended lease extension negotiations with Juneau I, and will instead go out for bids on replacement for 68,000 square feet of office space for the Labor Department.
State Procurement Manager Vern Jones said the lease on the building expires at the end of June, but it will likely be extended for a few months to allow time for the request for proposals to be issued and a new contract to be negotiated.
Holmes said Juneau I would consider trying to keep the state as a tenant.
“We certainly will look at any RFP they put out, and if we feel that we can be competitive and bid on it, then we certainly would,” he said.
“We’ve been told that it would be an open and competitive process and we wouldn’t be precluded from bidding on it,” Holmes said.
Jones said that was correct.
“We require compliance with code and the RFP, and if they comply with the building code and the RFP there’s no prohibition against them (bidding),” he said.
Both building codes and the state’s standard lease RFP are different than they were when the building was built about 30 years ago, he said.
“The RFP has been evolving over the years,” he said.
Holmes said he knows the building does need work, with one area needing attention being an old heating, ventilation and air conditioning, or HVAC, system that may have contributed to employee problems.
“We’ve hired an engineer to design a brand new system, it’s much more modern and would much better regulate the airflow,” he said.
“The state’s consultant has identified the humidity in the air as being dry, which could cause some of the symptoms that have been raised,” he said.
Additional work needing to be done includes carpet replacement and a complete replacement of the bathrooms.
The total cost of the needed improvements is about $2.5 million, Holmes said.
Juneau I had hoped to extend the existing lease, Holmes said, but under state rules that can only be done if it is at below market lease rates. Financing the improvement meant that was not possible, he said.
• Contact reporter Pat Forgey at 523-2250 or at email@example.com.