Negotiations For New Labor Building Lease Break Down

Mediated negotiations between the state and the owner of the Alaska Department of Labor building in Juneau have ended without a deal to extend the state’s rental agreement.

The state will soon start looking for office space for Labor Department employees.

“We weren’t able to come to terms on the Juneau Labor Building. Our plan now is to put out a competitive solicitation for replacement space for that lease,” says Vern Jones, Chief Procurement Officer with the Alaska Department of Administration, which negotiates leases on behalf of other state departments.

Jones says the main sticking point was over the length of a new deal. The owners wanted a 10-year extension, while the state wanted no more than 5-years. He says Administration Commissioner Becky Hultberg wants more flexibility as the state explores its office space options in Juneau.

“Our commissioner has said all along that she wants to preserve the option of a new state office building,” Jones says.

That’s good news to members of Juneau’s legislative delegation, who have pushed for a new state-owned office complex in the Capital City.

The Labor building has been plagued by numerous structural and air quality issues in recent years, and many employees say it’s causing their lingering health problems.

Juneau Democratic Senator Dennis Egan says something had to be done to improve conditions for those workers.

“You wouldn’t believe the emails that we get from employees,” Egan says. “And it’s not two or three employees that are disgruntled and then other employees think, ‘Well, I don’t feel well either.’ There are a lot of employees that are directly affected and I applaud the administration for getting them out of there.”

If the state decides to build new office space, Egan says the delegation would like to see it located downtown, near existing state offices and the Capitol.

“It’s more convenient, it’s in the core area of government and that’s where government ought to be. Directors and financial people; people that directly relate to the legislature,” says Egan.

In the meantime, Jones expects the request for proposals for office space to go out in the next two months.

“We’ve done some preliminary work and we know that there is space available,” he says. “Maybe not all in the downtown area, but area-wide we think there is sufficient space available. So, we’re hoping for good competition.”

The state’s lease at the Labor building expires at the end of June. Jones says it’s unlikely all of the employees will be moved out by then, but the current lease allows the state to stay in the facility on a month-to-month basis.

As we reported Monday, work began over the weekend to identify and remediate any mold in Room 210 of the building. Jones says the end of negotiations between the state and owner should not affect that work, which had already been agreed to and is being paid for by the owner.

Department of Labor officials involved in the lease negotiations were not available to comment by air time. But Labor spokeswoman Beth Leschper says there are absolutely no plans to move employees outside of Juneau.

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