A plan to move Juneau’s city employees into the building that houses the Alaska Permanent Fund Corporation downtown is inching toward reality.
At a committee meeting on Monday, Juneau Assembly members gave city administration the OK to begin negotiating the purchase of two floors of the Michael J. Burns building. If approved, they would become the new location for City Hall.
The only Assembly member to vote against the plan was Ella Adkison. She doesn’t like the idea of taking office space once used by the state. She worries it might add to capital creep if there’s less room in Juneau for state workers.
“I think it’s our fiscally responsible option. I think it’s best for our city employees. That’s not why I have such a problem with this proposal,” she said. “I have an issue with owning this building, with this mechanism, with this partner.”
Last year, the building owners said the floors would be vacant this year because a state agency didn’t plan to renew its lease for the space.
Less than half of city employees fit in the current City Hall building near Marine Park and the building needs roughly $14 million in maintenance work. The city rents additional building space to accommodate all its staff. For years, city leaders have maintained that the current situation is not sustainable and consolidating all city functions would help both city staff and the public.
In previous years, the city controversially wanted to build a brand new City Hall. It asked voters to approve millions in bond debt in 2022 and 2023 to help pay for the bulk of it. Voters said no both times.
But this time the city doesn’t need voter approval for the purchase because it doesn’t need to take on bond debt to pay for it. The Assembly put aside about $14.5 million for a City Hall project during recent budget cycles.
Now, the city plans to form what’s called a condo association at the Michael J. Burns Building, which would allow it to jointly own the building instead of renting. That’s something Assembly member Wade Bryson said is crucial.
“The only way to do something for the long term and be in business forever is to own it,” he said. “It’s just in the city’s best interest. It’s in our taxpayers’ best interest.”
City Manager Katie Koester said the city will begin with an offer of about $9.3 million for the floors, which is their appraised value. But she warned that the cost will likely change during negotiations because the owners are asking for about $12 million.
She said the city will likely need another $5 million to renovate and improve the floors if the purchase is approved.
Once Koester and the building owners settle on a price, she will go back to the Assembly to request final approval of the purchase.
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