Alaska transportation officials are reconsidering whether to purchase the building occupied by the state ferry headquarters in Ketchikan after an engineer's report showed it could require a $7 million upgrade.
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"It wouldn't be wise at this point to purchase the building," said Roger Wetherell, spokesman for the Department of Transportation and Public Facilities.
The Ketchikan Gateway Borough, which owns the building, has already invested $1.1 million in upgrades and has subsidized rent to cover the cost of the state moving the ferry system headquarters from Juneau to Ketchikan in 2004.
The move was controversial at the time because 60 jobs were transferred. The ferries are maintained in a shipyard in Ketchikan, and the intention was to put the management closer to those facilities.
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Rep. Beth Kerttula, D-Juneau, who opposed the original move, said the cost of the upgrade was disappointing and wondered what the ramifications would be for the state.
"We were sold this whole idea saying that it would save money, centralize, etc., and here it is, and it isn't that at all," Kerttula said. "We've got to support our ferry system. This is our highway in Southeast and I don't want to see it put in more jeopardy."
Wetherell emphasized there's no discussion of moving the headquarters out of Ketchikan. No final decision had been made on whether to buy the building, and discussions are ongoing with the borough, which is asking $2 million for it.
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The state Legislature in 2006 appropriated $2 million in federal transportation money to buy the site, the former Ketchikan Pulp Corp. mill office building at Ward Cove.
Wetherell was not aware of other money available for renovations.
"If the money was available, it would be worthwhile to construct a new building," Wetherell said. "We're in Ketchikan now, and we're going to stay in Ketchikan. Will we be in that building five years from now? That remains to be seen."
The Alaska Marine Highway System has a 20-year lease on the building.
The borough paid about $1.7 million for the building when it acquired several parcels in the Ward Cove area, Bockhorst said.
"We have a fairly substantial investment in that building," he said.
"We have not yet reached a conclusion whether that figure ($7 million) is a reasonable estimate or not, in terms of what one would reasonably expect to be undertaken at that location," Bockhorst said in response to the report's findings.
It would cost about $4.6 million to bring the building up to code for safety, disabled access, structural integrity and habitability. Another $2.4 million would go toward future upgrades, and "energy and functionality" issues. The building is 50 years old and does not have insulation in the roof or walls, according to the report.
Dennis Hardy, deputy commissioner for marine operations, said in a November letter to Ketchikan borough Mayor Joe Williams that there would be no "hasty decisions."
"I want to assure you the Department of Transportation has no intention of moving the Alaska Marine Highway System out of Ketchikan. We have built a solid management team and it is in the best interest of the state's ferry system to have the headquarters where the vessels are," Hardy wrote.