Empty LIO owners take $37M claim to court

  • The owners of the now-vacant Downtown Anchorage Legislative Information Office building turned to the courts Dec. 20 in an effort to get the $37 million they claim the state owes them for leaving the building prematurely. (Photo/Elwood Brehmer/AJOC)

The owners of the former Anchorage Legislative Information Office building took their $37 million contract claim against the state Legislative Council to court Dec. 20 after more than a year of wrangling over the Downtown office space.

716 West Fourth Avenue LLC filed the appeal to a Nov. 21 Legislative Council decision to deny the group’s claim in state Superior Court.

The court appeal rehashes many of the ways 716 contends Legislative Council chair Sen. Gary Stevens erred in his Oct. 6 initial denial of the contract claim, which was filed with Stevens in July.

716 West Fourth Avenue is the Downtown Anchorage address of the six-story office building. The owner group is led by Anchroage developers Bob Acree and Mark Pfeffer.

Notably, 716 alleges Stevens did not address the claim arguments in his lengthy October denial document — primarily that legislators violated the building lease despite invoking a seldom-used “subject to appropriation” clause found in many state leases and left the building owner group out to dry on the $44.5 million building project.

Stevens wrote in his denial that, among other reasons, 716 is not owed what it claims because the group still has the prime downtown real estate.

New in 716’s court appeal is the assertion that the council violated the Alaska Administrative Procedures Act by not holding a hearing on the matter before rejecting the adminstrative appeal in November.

The Legislative Council is the Legislature’s day-to-day operations body and through the supporting Legislative Affairs Agency handles business matters for lawmakers.

Legislators moved out of the Downtown Anchorage building in late September and into Midtown office space purchased for $11.8 million via the state capital budget.

Public pressure over the unpopular 10-year $33 million lease for the building, which was custom-built for the Legislature in 2014, pushed the council to start looking for a way out of the space late last year.

Lacking the Legislature’s monthly lease payments of about $280,000, 716 has since defaulted on its $28.6 million loan on the building with Florida-based EverBank, according to the court appeal document.

 

Look for updates to this story in an upcoming issue of the Journal. Elwood Brehmer can be reached at [email protected].

Updated: 
12/22/2016 - 4:56pm

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