The old subport property in downtown Juneau may have missed a chance to become a $45 million state office building after a bill to pave its way stalled in committee when the Legislature adjourned last week.
The building would have housed 400 state workers, 300 of which currently work in dilapidated, leased quarters, while at the same time bolstering Juneau as the center of state government.
"We're just starting talking about where do we go from here, a lot of our focus up until Sunday was trying to get this bill passed," said Kevin Brooks, deputy commissioner of the Department of Administration.
To Brooks, it's crucial to find new offices for the Department of Labor's 300 employees, currently housed in a leaky, mold-infested building known colloquially as the "plywood palace." It's a building the state badly wants to get out of.
The plan was to have the Alaska Mental Health Trust Authority build a new building on the downtown subport property, and then lease it to the state. The proceeds from the lease payments would then go to trust beneficiaries across the state instead of a private company.
The effort to pass House Bill 161 got off to a rough start, with key mistakes made by Rep. Cathy Muñoz, R-Juneau, some legislators said. As it progressed, powerful opponents surfaced.
Early support crucial, lawmakers say
Typically, a lawmaker pushing a big project in Southeast would have lined up support before introducing such a significant bill. Muñoz made a mistake that was difficult to overcome by not doing that, said Rep. Bill Thomas, R-Haines.
"When you introduce a bill that impacts Southeast, you never introduce it without all of us on it," Thomas said.
"Cathy introduced hers, the subport bill, without our names on it," he said.
Muñoz said that concern was not serious, as all the Southeast legislators joined as co-sponsors later.
"That's not really an issue," she said. "Everybody in Southeast signed onto the issue, the bill had a lot of support."
Muñoz also broke from tradition by not including Rep. Beth Kerttula, D-Juneau, as a co-sponsor. The building site is in Kerttula's district.
Kerttula tagged them as freshman missteps - it was Muñoz's first session in her first year as a legislator - but Kerttula joined as a co-sponsor and helped shepherd the bill through the House.
Muñoz said Kerttula, the House minority leader, may not have had time to push the bill aggressively while she was seeking appointment to the state Senate seat recently vacated by Kim Elton.
"It takes a lot of work to take an issue like this one," Muñoz said. "I think she was very wrapped up in the issues regarding the Senate nomination."
Once the bill was introduced, the subport building faced opposition from some legislators outside Southeast who didn't want it built in Juneau.
"They wanted this Mental Health Trust building built up north," Thomas said.
In the House, the bill was delayed in committee while Reps. Charisse Millett, R-Anchorage, and John Harris, R-Valdez, questioned the financial terms.
After the bill was amended to provide for the purchase of an Anchorage building from a Valdez native corporation, they withdrew their objections.
Lobbyist opposition clouds bill's future
With Kerttula lining up Democratic support, and Muñoz, Harris and others lining up Republican support, the subport bill passed the House easily.
Problems loomed in the Senate, however.
The owners of the plywood palace, a limited liability company, hired lobbyist Kevin Jardell. His mission, said the subport building's advocates, was to stop the building and avoid losing the lucrative lease with the state.
"He was lobbying hard against the bill, no question," Muñoz said. Jardell was hoping to see the state rent the plywood palace for one more year, she said.
In an e-mail, Jardell said it was not accurate to say he was trying to stop or slow the bill.
Brooks said the state was spending $2 million a year under a 30-year lease for the plywood palace that expires in 2012. If forced into a one-year extension, the rent would likely be even higher. Alaska Public Offices Commission records show Jardell was paid $55,000 to handle "real estate matters." Jardell also represents Exxon Mobil Corp. and other clients.
"I think he was urging at least waiting a year," Brooks said. "How successful that was, I don't know."
Patricia Blomfield, a plywood palace owner/partner, said their opposition to House Bill 161 was due to fear the subport building would not be a good deal for the state.
Senate without a Juneau senator
After Elton left for a job in the Obama administration, Juneau was without representation in the Senate, but Sen. Donny Olson, D-Nome, championed the issue for Juneau.
A Senate companion bill, Senate Bill 167, passed through two Senate committees and then on to the Senate Finance Committee, where it was joined by the House bill.
The bills never moved from the committee, and Sen. Bert Stedman, R-Sitka, would not tell the Empire why he held the bills.
Muñoz said she lobbied Stedman several times, but was not given a reason either.
"He was never specific about what his concerns were," she said.
At the same time, Muñoz was lobbying the Palin administration for support, but the governor didn't act on a request to make the bill a priority.
Muñoz backed Palin's controversial choice for attorney general, Wayne Anthony Ross, but Palin declined to publicly back the subport building. Muñoz had previously touted support from the governor during a Chamber of Commerce luncheon in early 2009. Palin spokeswoman Sharon Leighow said the governor was neutral on the bills.
Late in the session, the governor's office barred departmental legislative liaisons from the capitol unless they were lobbying her priority bills. Brooks said that wasn't a hindrance, however, since he was given special permission to lobby for the subport office building.
In the Senate, the bills idled in the Finance Committee. Juneau had no senator to advocate for it because Palin and Senate Democrats were fighting over who should be appointed to the seat.
Sen. Lyman Hoffman, D-Bethel, Stedman's co-chair on the Senate Finance Committee, blocked a last-ditch attempt to include the subport building in a separate bill that was still moving through the process, Muñoz said.
"I think it had something to do with the vacant Senate seat," Muñoz said.
Hoffman had been supporting one of his aides, Tim Grussendorf, for the appointment.
Rep. Harris said that if new Sen. Dennis Egan had been appointed by Palin when he was first suggested by Mayor Bruce Botelho instead of on the last day of the session April 19, things would have been different.
"If Dennis had been appointed sooner, when it was first suggested, Juneau would have won approval for a new state building at the old subport," he said.
House Speaker Mike Chenault, R-Nikiski, said he was disappointed that the Juneau office didn't get approved, but that he'd make it a top priority when the next session begins in January.
"That's very significant," Muñoz said. "That was a very strong statement of support that he's willing to work with me to see the bill move," she said.
• Contact reporter Pat Forgey at 523-2250 or email@example.com.
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