Judge in LIO case denies owners’ request to enter new evidence

A request for new evidentiary hearings in the $37 million lawsuit brought by the owners of the now-vacant Downtown Anchorage legislative information office against the Alaska Legislature was shot down in a Wednesday state Superior Court ruling.

Judge Mark Rindner’s order means the case will likely be decided on the facts already presented — and was a win for legislators.

716 West Fourth Avenue LLC, the building owner group comprised of Anchorage real estate developers, appealed its $37 million contract claim to the Superior Court last December after then Legislative Council chair Sen. Gary Stevens denied the claim last fall. The full, 14-member council subsequently denied 716’s appeal of Stevens’ decision without a hearing.

The Legislative Council — the actual defendant in the suit — handles business matters for the full Legislature.

Attorney for 716 Jeffrey Feldman argued before Rindner in a May 19 hearing on the matter that Stevens relied heavily on “hearsay” evidence such as newspaper articles to support his decision and largely ignored supporting materials submitted by the developers.

According to Feldman, an allowance for new evidence in the case would expose the fact that legislators shirked their responsibilities to act in good faith and uphold the 2013 deal that had 716 invest $37 million in the $44.5 million on the premise the Legislature would occupy the building long-term. The Legislature contributed the remaining $7.5 million.

Instead, legislators bowed to political pressure from constituents who were unhappy with the 10-year, $3.3 million per year lease they signed for the space built just for them and backed out of the deal without compensating his clients, Feldman contended.

In his order Wednesday order, Rindner wrote that allowing an evidentiary hearing, or trial de novo, would be outside the norm procedurally for an administrative appeal such as 716’s claim and that “there are significant questions of law that must be resolved before any additional findings of fact are made.”

Rindner said during the May 19 hearing that it shouldn’t be a surprise that legislators make decisions for political reasons and expressed hesitancy towards a court-ordered exposure of why they ultimately decided to leave the building, saying the court could very quickly be blurring the separation of powers between the branches of government.

If and when the legal questions are answered, Rindner can then decide if further discovery is needed, at which point the case could be remanded back to Legislative Council to unearth new evidence, which would be normal procedure, he wrote further.

He did not elaborate on which legal issues are unresolved, but concluded with, “Proceeding in this way will allow remaining factual issues, if any, to be more narrowly defined.”

Legislative Council is now chaired by Juneau Rep. Sam Kito, who repeatedly advised against the Legislature walking away from its Anchorage offices on the belief doing so would invite such a lawsuit.

Elwood Brehmer can be reached at [email protected].

06/05/2017 - 9:24am