Subport building wins House approval

HB 161 would authorize Mental Health Trust Authority to invest $22.7 million in trust funds

Posted: Thursday, April 09, 2009

The House of Representatives Wednesday gave a big thumbs up to a new office building for state employees in Juneau.

House Bill 161 would authorize the Mental Health Trust Authority to invest $22.7 million in trust funds and borrow the remainder to build a new $45 million office building, with the expectation the state will lease space there.

It must still pass the Senate and be signed by the governor to become law.

Rep. Cathy Muñoz, R-Juneau, who introduced the bill, said it would provide new offices for Departments of Corrections, Fish and Game, Public Safety and Labor employees.

It would also mean the state would be making lease payments, which would go back into providing services to Mental Health Trust Fund beneficiaries, instead of a private owner.

Muñoz said some of those employees are in aging state buildings with growing maintenance needs, but the real need was a new location for the Department of Labor, which is nearing the end of its current lease.

"The real driver for this legislation is the 300 employees of the Department of Labor," Muñoz said.

The building is estimated to cost up to $50 million, according to Muñoz and trust officials. It would be four stories tall, and have 147,000 square feet of space. The building will be located at the intersection of Egan Drive and Whittier Street on a lot now used for parking.

State officials say they are adamant they want to move out of the current Department of Labor offices due to water leaks and mold problems, and will not be renewing the lease.

Rep. Beth Kerttula, D-Juneau, who co-sponsored Muñoz' bill, warned that the lease on the Department of Labor building was going to be up in 2012, requiring a rapid decision.

She praised the work of the Mental Health Trust and state officials in putting together a deal that also benefits the trust.

"It was a wonderful resolution for a huge problem," she said.

Rep. Bill Stoltze, R-Chugiak, praised Muñoz for her work on HB 161.

He credited her "zealous representation of the capital city," and her decision to involve Kerttula with the bill's success.

The bill was also amended to allow the Alaska Housing Finance Corporation to purchase its Anchorage offices for $14.5 million.

Rep. John Harris, R-Valdez, supported the bill, saying the Tatitlek Village Corp., which owns the building, wants to sell it. That village is near Valdez.

Harris said that even with the inclusion of that amendment, he would have been skeptical of the Juneau project if it was any developer other than the Mental Health Trust Authority.

"It supports some of the neediest people in Alaska," he said.

The bill passed 38-1, with only Rep. Craig Johnson, R-Anchorage, in opposition.

The bill has taken most of the 90-day session to move through the House, and has until April 19 to pass the Senate and become law.

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