Legislature(2005 - 2006)HOUSE FINANCE 519
05/03/2006 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmations | |
| SB188 | |
| SB289 | |
| SB317 | |
| SB274 | |
| SB271 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 317 | TELECONFERENCED | |
| + | SB 274 | TELECONFERENCED | |
| + | SB 188 | TELECONFERENCED | |
| + | SB 289 | TELECONFERENCED | |
| + | SB 271 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 317
"An Act relating to the purchase by the Alaska Housing
Finance Corporation of a parking garage in Anchorage,
Alaska and approving the issuance of bonds for the
purchase of that parking garage; providing notice of,
and authorizing the commissioner of the Department of
Administration to enter into, a lease-purchase
agreement with the Alaska Housing Finance Corporation
for that parking garage; and providing for an effective
date."
SCOTT J. NORDSTRAND, COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, referred to a handout "Atwood Building
Parking Center" (copy on file.) He explained that Anchorage
is building a convention center downtown and wants to
acquire Block 80, which is valued at $4.6 million. An
agreement was made to swap half of Block 70 for half of
Block 80. The state accepted $2.3 million in cash for the
other half of Block 80. That left a shortage of parking in
Block 70. The state made an agreement with the municipality
for the right to park 149 cars in the JC Penney garage for
up to 7 years and for free parking during the construction
of a new parking garage. If, at the end of 7 years, the
state does not build a parking garage, the municipality has
the option to purchase back the property and they would have
to build a parking garage. Presently, there is a need for
about 1,000 parking spaces.
9:07:37 AM
Mr. Nordstrand referred to page 2 and listed the various
parking spaces currently available. The plan is to build a
parking garage on Block 70 that would accommodate up to 830
vehicles and with a skyway into the Atwood Building.
Mr. Nordstrand noted on page 5 the configuration of the
future parking plan. Alaska Housing Finance Corporation
(AHFC) owns the Atwood Building. The developer for the new
convention center will also be used for the new parking
garage in order to get the best possible price.
Construction on the new garage will begin next spring.
AHFC would issue debt and purchase from the municipality,
and the Department of Administration would lease the parking
facility from AHFC. The state will own it at the end of the
lease/debt payoff. The Department of Administration will
build the cost of the parking into the lease rate that is
charged to tenants in the facility.
9:10:41 AM
Mr. Nordstrand related the financial terms on page 7. AHFC
will bond up to $44 million and have a debt service of
$3,700,000 annual lease payments over 21 years. The debt
would be issued at the beginning of construction with
progress payments thereafter.
Mr. Nordstrand talked about the lease cost analysis on page
8. The new lease rate of $2.52 per square foot does not
reflect offsetting revenues and savings. He explained the
revenues and savings on page 9. He estimated that parking
costs would increase. The first floor of the facility will
be used for retail space and will be a source of income.
The convention center cash payment of $2.3 million is
available revenue. After hours parking revenue is estimated
to be $200,000 per year. The total when capitalized is
$23.5 million. Revenues and savings are estimated to reduce
the square foot cost for the parking center by half.
9:14:26 AM
Mr. Nordstrand summarized that there is a demand for more
parking and future cost and demand impacts are imminent.
The Atwood Parking Center would provide safety and
convenience for visitors and 1,000 state employees and other
tenants.
Representative Foster spoke in support of SB 317. He
recalled that a survey in the 80's showed 59 percent of
facilities were not taxed so the burden fell on the other 41
percent of the people. When the state owns facilities,
others have to pay for maintenance. Co-Chair Meyer recalled
when the state bought the Atwood building, which resulted in
a loss to the tax rolls. Mr. Nordstrand described this
transaction as a win/win situation that has the approval of
the city. Co-Chair Meyer commented that the taxpayers may
not be happy.
9:16:24 AM
Representative Kelly asked if there is a charge to park at
the lot. Mr. Nordstrand replied that there are so many
square feet allowed for state parking. He gave an example
of a lease facility with not enough parking. Atwood
employees have not been paying for parking. There are 930
free parking places presently.
Representative Kelly asked if that would be an issue in the
future. He agreed with the concern brought up by
Representative Foster and Co-Chair Meyer. He suggested
letting the people pay for it. Mr. Nordstrand said that
issue has not been looked at. He could see how it could be
a financial problem for employees. The norm is to not pay
for parking.
Representative Kelly cautioned that there is unfunded
liability. Mr. Nordstrand pointed out that the municipality
is planning to build more parking.
9:21:52 AM
Co-Chair Meyer asked if lease payments are shown on the
fiscal note. He asked about savings resulting from
consolidating parking. Mr. Nordstrand said that expense has
not been determined. Co-Chair Meyer asked who would pay for
maintenance of the parking garage. Mr. Nordstrand said the
Anchorage Parking Authority. He spoke of how security would
be handled. Those costs are unknown, but evening and
weekend parking could offset those expenses.
Co-Chair Meyer asked if there would be a walkway to the
Atwood Building. Mr. Nordstrand replied that the Atwood
Building was designed for such a skyway. There may be a
skyway to the Convention Center in the future.
9:25:03 AM
Co-Chair Meyer commented that the fiscal note has unknowns.
Representative Foster MOVED to REPORT SB 317 out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 317 was REPORTED out of Committee with individual
recommendations and with fiscal note #1 by the Department of
Administration.
9:26:37 AM
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