Legislators offer $32.5 million for Anchorage LIO

The state government would buy the Legislative Information Office in downtown Anchorage for $32.5 million, under a recommendation made Thursday night by the Legislative Council.

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The sign outside the Anchorage Legislative Information Office, March 4, 2016. (Photo by Megan Ahleman)
The sign outside the Anchorage Legislative Information Office, March 4, 2016. (Photo by Megan Ahleman)

But it’s not a done deal. The council’s final offer is more than a million dollars less than what building’s owners 716 West Fourth Avenue LLC have said they’d accept.

Council Chairman Kodiak Republican Senator Gary Stevens says the offer is similar to the cost to move the office to the state-owned Atwood Building.

“The council said 32.5 is the fair price, and we won’t go any higher than that, so it’s really now in the owner’s hands and he has to make that decision. Either he accepts that price or he doesn’t. That’s where we are.”

The council voted 13 to one for the recommendation. It’s the midpoint of two estimates that a consulting group prepared for the state. Big Lake Republican Representative Mark Neuman was the only no vote.

Rep. Mark Neuman, R-Big Lake, during discussions about the state operating budget shortly before it was passed out of the House Finance Committee, March 9, 2016. (Photo by Skip Gray/360 North)
Rep. Mark Neuman, R-Big Lake, was the only no vote on the recommendation to buy the LIO building. (Photo by Skip Gray/360 North)

LIO co-owner Mark Pfeffer says the building cost nearly 37 million. But he adds the owners would accept three million less.

Before the council met privately for two hours, Pfeffer said the owners have accommodated the state.

“Every time we have those requests, we try to solve the problem. And so far, we think we have every time. So, if we can help achieve savings, we’re willing to do it. “

The owners recently turned down an offer similar to the council’s final recommendation. But ownership representative Amy Slinker says they’re glad the council came to a decision.

Slinker said in a statement: “Now we have something to talk about. We are going to analyze it and get back to them soon.”

A Superior Court judge recently ruled the state lease for the building is illegal, because the state didn’t open it up to competitive bidding.

Under the lease terms, the state would have paid twice as much for the LIO over the next 20 years as it would for the Atwood Building space.

Stevens says that if the owners don’t accept the recommended offer, the state would move to Atwood. But he says buying the LIO would save the cost of moving. And it would end the litigation.

“This could wind up as very long, long litigation. And they’re to appeal the decision of the Superior Court, and that could really wind up being quite costly for all of us.”

The state will pay through July based on the terms of the invalidated lease.