State to keep most employees in the 'Plywood Palace'

A fourth of Labor Department employees will move to Mendenhall Mall

The Parnell administration has decided the new location for Department of Labor & Workforce Development employees in the building known as the “Plywood Palace” will mostly be to remain in the same building.


State Chief Procurement Officer Vern Jones said Monday that 78 Department of Labor employees will move to new offices in the Mendenhall Mall, while 260 will remain in the current location.

“I’m not happy about it, we’re very concerned about the people who are in that building,” said Kim Metcalfe, business agent with the Alaska State Employees Association, whose General Government Unit represents the rank-and-file workers in the building.

Juneau’s legislative delegation had been hoping the decision by the Department of Administration to seek bids on new office space would mean new quarters.

“This was certainly not the delegation’s understanding, or our hope,” said Rep. Beth Kerttula, D-Juneau.

Instead, Juneau I, the limited liability company that owns the Plywood Palace and other state office buildings offered the low bid.

Jones said a review committee made up of staff from the Division of General Services and the Department of Labor reviewed the bids and made the selection.

The building on West 8th Street at the foot of the bridge to Douglas has had water infiltration and subsequent mold problems, though the building owners say they’ve taken steps to solve the problems. Despite its nickname, the building is now clad in steel, for one thing.

The Legislature provided money for the administration to study locations for a new, state-owned building for the Labor Department offices, but it instead decided to continue to rent space.

Kerttula said she doesn’t want the employees in that building, unless they can show the mold that is thought to have caused employee health problems can be shown to have been eliminated.

“The bottom line is the employees’ safety, and we were told that was also the administration’s bottom line,” she said. “This is not what I expected to see,” Kerttula said.

Metcalfe said she was “very upset” when she heard the employees would be mostly remaining in the same building.

“I’m very concerned about the people who are in the building,” she said. “We’ve been working on this for years.”

She said she had hoped a new state-owned building would be built. “That sounded like the solution we needed,” she said.

Jones said the notice of contract award has been issued, but they are now in a 10-day protest period before they can take steps to finalize the new leases.

Following that, it will take some months for the Mendenhall Mall space to be readied for its new occupants. Jones said the move there might be in November.

The work groups moving to the valley will be Network Services and the Employment Security Division’s Unemployment Insurance call center.

Jones said he wasn’t sure where in the Mendenhall Mall the new space would be located, but other state offices recently moved into a portion of the former Gottschalks location. There are numerous other vacancies in the mall, however.

The lease term will be for five years, with shorter renewal options, Jones said.

• Contact reporter Pat Forgey at 523-2250 or at


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