City pursues land agreement with state for parking project

Juneau must resolve decades-old deal before it can build a garage

Posted: Tuesday, August 05, 2008

The Juneau Assembly met in executive session Monday to discuss negotiations with the state of Alaska on land at Telephone Hill, where the city plans to develop a parking project.

Brian Wallace / Juneau Empire
Brian Wallace / Juneau Empire

The state owns the nearly two-acre parcel at the corner of Main Street and Egan Drive, and the city needs to resolve a decades-old agreement with the state before it can build a planned four-story parking garage and transit center.

That could be achieved through a lease or a sale, city Lands and Resources Manager Heather Marlow said Monday, before the meeting at City Hall.

The negotiations involve a cooperative-use agreement signed by the two government entities in 1984 so that both could develop public facilities in Juneau's downtown core. The area has long been discussed as a site for a new capitol, but immediate plans call for an $11 million to $16 million parking garage.

As part of the 1984 agreement, Juneau paid the state $2 million to acquire private property in the area through eminent domain. If the state did not develop the property in 10 years, Juneau could be reimbursed or receive a portion of the land.

Marlow said the city estimates its initial investment to now be worth about $6.5 million.

The state wants to clear up that debt, said Randy Ruaro, special assistant to Gov. Sarah Palin who is working with the Department of Transportation in negotiations with the city. DOT holds the title to the land.

The state would like to transfer the property deed or agree to a long-term lease, Ruaro said.

"We want to help the parking garage get built, but we want to do it in a way that's fair to the state," he said, adding that any deal would have to consider fair market value of the land while taking into account that the project will serve a public purpose.

The state offered the city a long-term lease to forgive part of the debt, but the two sides did not reach an agreement Monday night. While he was available for questions during the executive session, Ruaro did not participate.

"We're committed to working with the city to reach a fair resolution," he said after the meeting. "And we think we can do that."

Dixie Hood protested the Assembly's decision to discuss negotiations in executive session, which bars the public's attendance.

Hood called on elected officials for more transparency.

"I feel this whole project has just been way over any costs the public has ever been informed about," she said.

Alaska's open meetings law allows elected officials to discuss matters in private that, if made public, would clearly have an adverse effect on the finances of government.

Mayor Bruce Botelho said after the approximately 45-minute meeting that the reason it was held in private was to protect the finances of the city.

The discussion likely centered around a 58,000-square-foot piece of property that mainly borders South Main Street. It includes the flat portion used for parking and bus operations, plus the part known as Telephone Hill.

While the city attained permission to develop other parts of the property in its cooperative-use agreement with the state, the parcel in question was not included, Marlow said.

The city might prefer to own the land, Marlow said.

"Typically with the city, we build on property we own," she said. "(A lease) would be a unique circumstance if we were to build on it."

Botelho said the Assembly gave direction to City Manager Rod Swope about how to proceed in negotiations with the state, but he did not reveal the city's position.

Swope is expected to report to the Assembly at its next meeting, set for 7 p.m. Monday at City Hall.

Voters approved $7.7 million for the parking garage and transit center in a 2005 election by passing a temporary sales tax extension.

Proponents say the project is needed to free up on-street parking downtown. It is supported by heads of the Downtown Business Association and Juneau Convention and Visitors Bureau.

The project has drawn criticism from residents who don't like its size or design. Opponents also say a mass transit plan that would decrease vehicle trips into downtown would better serve the community.

• Contact reporter Kim Marquis at 523-2279 or e-mail

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