Moving forward on purchasing two floors of the three-story Michael J. Burns Building for City and Borough of Juneau employees got near-unanimous approval from Juneau Assembly members on Monday, despite concerns about costs and reducing the amount of office space available for state workers — thus perhaps furthering the trend of fewer of them in the capital city.

Purchasing the two floors would be part of an “office space shuffle” now occurring for CBJ employees, according to City Manager Katie Koester during a presentation of the proposal at an Assembly Committee of the Whole meeting. The current proposal is CBJ would own the lower two floors and the Alaska Permanent Fund Corp. would remain the owner of the top floor under a “business condo” agreement.

But moving city workers from existing facilities that are aging is a process that’s been ongoing for a year — after voters twice rejected bond measures for a new City Hall — including Assembly members in January expressing support for a possible Burns building move. Koester said she is still awaiting an appraisal of the building’s value now expected by December, but in the meantime wants authorization to proceed on as many specifics of an agreement with APFC as possible.

“This beast really is very slow moving,” she told Assembly members. “Meanwhile our office needs are very acute, and just seem to be getting worse and worse by the day.”

CBJ employees downtown occupy space in five buildings, including City Hall, and officials have stated the spaces being leased are both too costly and in need of too much maintenance to be practical. A new City Hall with a price tag of more than $40 million on a vacant lot near Centennial Hall was rejected during the 2022 and 2023 municipal elections, prompting the search for existing space to relocate some or all of an estimated 165 downtown employees.

A step in that direction occurred in September when Parks and Recreation employees at City Hall moved into what was the Juneau School District’s administrative building downtown until the district vacated that and two schools as part of a budget-cutting consolidation plan. Some CBJ finance department employees are scheduled to move into that building soon as well — and staff from other city departments will move into some of the now-vacated City Hall spaces.

Koester, in a memo presented to Assembly members Monday, stated there were also hopes of moving some employees into the nearby Marie Drake Building are on hold due to asbestos and other extensive maintenance that is needed.

“In the near term, this finding puts a hold on city employee uses for Marie Drake,” she wrote. “Longer term, it puts in jeopardy public uses without significant investment in remediation.”

Among the options worth considering at this point is demolishing part or all of the building, creating a parking lot with up to 212 spaces, Koester added.

Meanwhile, the renewed focus Monday on the Burns building raised some concerns among Assembly members, including what Alicia Hughes-Skandis called seemingly “jaw-droppingly high” condo dues Koester estimated at $650,000 a year. Koester said that figure includes maintenance and she doesn’t consider the dues a major concern “because they go back into the building that we will be a majority owner of.”

CBJ is currently paying about $800,000 to lease office space, which is somewhat lower than recent years due to some employees who have been moved from buildings not owned by the city, Koester said.

A different and more opinionated concern was expressed by Assembly member Ella Adkison, who said purchasing most of the Burns building is detrimental to Juneau’s short- and long-term future in terms of providing sufficient office space for non-city employees. She specifically referred to ongoing efforts by APFC to move employees to an Anchorage office, despite the Alaska Legislature denying the corporation funds for such a move, and said it may encourage more so-called “capital creep” or prevent state employees from returning here if that trend reverses itself.

“We have an administration and a governor right now that is moving jobs out of Juneau, but that’s not forever,” she said. “We have a few more years of this, but there is potential for positive change in our state administration and I don’t like this permanent change in state office space, and I worry that we are preventing jobs coming back to Juneau.”

Adkison, a staff member for state Sen. Jesse Kiehl of Juneau — a leading opponent of the APFC move — cast the lone dissenting vote as Assembly members by an 8-1 tally authorized Koester to research and draft documents for an ownership agreement with APFC for the Burns building. The agreement will be subject to further review and approval by the full Assembly.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.