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Legislature to pay more for Anchorage office space

Posted: October 6, 2013 - 12:06am

ANCHORAGE — A deal to renovate and expand the Legislature’s leased office building in Anchorage will result in a huge increase in monthly rent.

The Legislature pays about $57,000 a month to lease its current downtown building, where local legislators work between sessions and other lawmakers, including the House speaker and Senate president, have offices.

Under terms negotiated by Rep. Mike Hawker, the state will pay more than $280,000 a month once renovation is complete in January 2015, the Anchorage Daily News reported.

Hawker crafted the deal as chairman of the Legislative Council; it was vetted by the Alaska Housing Finance Corp., or AHFC. The Legislative Council set aside $50,000 for AHFC’s help.

Michael Buller, deputy executive director of AHFC, said that while rent will be going up significantly, the amount will be 13 percent lower than the fair market rate for similar property downtown, as determined by a California real estate expert hired to analyze the deal. The rate will be locked in for the 10-year lease.

Hawker, R-Anchorage, said the current rent is well below market rate. But after unsuccessful efforts to buy or build a new Anchorage office, legislators needed to find something before the current lease expired May 31.

The building also houses a Legislative Information Office and has been the Legislature’s home base in Anchorage for two decades. Following $44 million in renovations, it will be more energy-efficient and better designed for public access, said Hawker and Mark Pfeffer, the landlord and new part-owner of the building.

During an open house to explain the project Thursday, they said it won’t be deluxe. For example, the House speaker and Senate president will have smaller offices.

But the ramp into the underground parking used by legislators will be heated, to make it safer. And the ground floor — where the information office will be moved — will be redesigned to include an auditorium big enough for 110 people, along with three conference rooms that could open into another large room for about 50 people.

The full Legislature could meet there for a special session. However, the state’s Capitol building is in Juneau and lawmakers have said they are not trying to quietly change that.

The Legislature also is putting in $7.5 million for carpet, walls, doors and other items to finish work spaces. Pfeffer said developers plan to spend $36.5 million for renovations like a new heating and air conditioning system and new plumbing, bathrooms and elevators.

“It’s a very old, tired existing structure,” Hawker said. “We don’t even have potable water in the building.” Over the years, there have been numerous complaints about the building.

Under the current lease, the Legislature is renting about 40,000 gross square feet; under the new terms, it will end up being about 64,000 gross square feet.

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