Owners of the contentious Legislative Information Office in downtown Anchorage have offered to sell the building for $37 million plus closing costs.
The developer said the sale would save the state $2,052,000 over the next nine years of its lease, and avoid possible lawsuits if legislators walk away from the agreement.
The offer is the latest salvo in a battle between lawmakers, developers and lawyers over the price legislators agreed to for the building in 2013 during a very different fiscal climate. The Jan. 29 proposal outlines savings to the state if it buys the building outright rather than piece-by-piece under the 10-year lease that lawmakers have debated abandoning.
The terms of the deal are laid out in a letter from Oct. 9, 2015, included in the materials made public Friday by the Legislative Council.
Based on figures from the Department of Revenue, the developer claims the sale would be cost-competitive against the alternatives.
“The DOR analysis clearly confirms that the Option to Purchase will provide the Legislature with more significant savings than any other scenario, including a move to the Atwood Building,” wrote developer Mark Pfeffer, one of the managing members of 716 West Fourth Avenue, LLC, the group that owns the building.
Legislative Affairs Agency Director Pam Varni refutes the basis of that claim in an accompanying memo.
“The data provided by 716 West Fourth Avenue, LLC to the Department of Revenue for their Proposal are misleading,” Varni wrote in a memo on Friday. According to Varni, by factoring in a continued debt load for leasing the Atwood space, the price is inflated. The numbers submitted to DOR are “unrealistic and erroneous,” she wrote, as the state will have paid off the Atwood building by March of 2017, although that is not the case for the parking garage that would be part of the potential Atwood lease.
In an emailed statement, Amy Slinker, a representative for 716, wrote that Varni’s memo “lacks third party analysis.”
The disagreement over exact numbers is hardly the final say over the future of the LIO building. The Legislative Council is meeting Thursday to discuss the proposal. Their recommendation will go to the full legislature, which must decide whether or not to appropriate money for the lease in the upcoming fiscal year.
The proposal also notes that the purchase option involves the dismissal of a lawsuit brought against 716 and the Legislative Affairs Agency by Alaska Building, Inc., the company run by Anchorage attorney Jim Gottstein. Reached for comment earlier in the week about what the terms of the dismissal are, Gottstein said only, “We’ll see,” and declined to elaborate.
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