Legislature(1997 - 1998)
04/30/1997 08:07 AM Senate FIN
Audio | Topic |
---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 178 ANCHORAGE OFFICE BUILDING Testimony was heard from DUGAN PETTY, FORREST BROWNE, BOB PARKS, DOUGLAS EXWORTHY, KEITH GERKEN and MITCH GRAVO. SENATOR DONLEY MOVED Amendment #1. COCHAIR PEARCE objected. Amendment #1 FAILED by a vote of 3 to 3. SENATOR DONLEY MOVED Amendment #2. COCHAIR SHARP objected, then withdrew his objection. Without further objection, Amendment #2 was ADOPTED. SENATOR DONLEY MOVED Amendment #2. COCHAIR SHARP objected. Amendment Amendment #4. Without objection, Amendment #4 was ADOPTED. SENATOR PHILLIPS MOVED the bill from committee with individual recommendations. Without objection, CSSB 178(FIN) was REPORTED OUT with fiscal notes from the Department of Revenue and the Department of Administration (1823.0) and (<914.6>). SENATE BILL NO. 178 "An Act giving notice of and approving a lease-purchase agreement by the Department of Administration for an office building in Anchorage; relating to the financing of the lease-purchase agreement; and providing for an effective date." BOB PARKS, President, and DOUGLAS EXWORTHY, Executive Vice- President, TRF Pacific, Inc., addressed the committee. MR. PARKS explained that their company was one of two general partners in the Frontier building. They intended to present a proposal for a long-term lease for state occupancy in that building. He noted they had not been asked to make a proposal until a couple weeks ago by a member of the House Finance Committee. He passed the proposal out to committee members (copy on file) and explained the details. MR. EXWORTHY asked that the Department of Administration include certain factors in their analysis of comparison between the purchase of the Bank of America building and their long-term lease proposal. He further discussed areas of concern regarding development, parking and risks inherent in long-term ownership of real estate. SENATOR PARNELL inquired about the time period of the proposal and operating costs. He also asked about including the value of existing leases. SENATOR PHILLIPS asked for the department's response to the proposal. COCHAIR SHARP expressed concern that it was a contingent proposal based on approval of three additional lenders within a limited time period. DUGAN PETTY, Director, Division of General Services, Department of Administration, had received the proposal at the same time as committee members. He commended the management of the Frontier building on behalf of the state. He noted that the proposal had a smaller square footage and a different method and length of control of the space. He believed the Bank of America scenario compared more favorably for the state than the proposal for the Frontier building. There was additional lengthy discussion between MR. PETTY, COCHAIR PEARCE and SENATOR TORGERSON regarding details of the pros and cons of the two buildings. FORREST BROWNE, Debt Manager, Treasury Division, Department of Revenue, was invited to joint the committee. COCHAIR PEARCE asked him about falling interest rates with respect to financing of the Bank of America building. MR. BROWNE responded that they retain some flexibility to refinance, but there would be a cost. He explained further. He had recently reconfirmed the timing schedule with the lender, noting that it was important. He was confident that flexibility may be extended based on a showing of good faith. In response to a question from SENATOR DONLEY, MR. BROWNE explained that they would have no authority to accept the Frontier building proposal without special legislation. SENATOR DONLEY MOVED Amendment #1. COCHAIR PEARCE objected. SENATOR DONLEY explained that the amendment would require the state to continue to pay property tax to communities for existing buildings that they purchase. He noted that Anchorage taxpayers would be paying the cost and subsidizing the building. The amendment dealt only with purchase of existing buildings. SENATOR TORGERSON asked if the footage rented by the state in the Frontier building was exempt from municipal taxation. COCHAIR SHARP said it was not. MR. PETTY confirmed. There was discussion about the fact that municipalities could grant an exemption to taxation. SENATOR DONLEY noted Amendment #1 would apply to all future purchases. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Torgerson, Parnell, Donley OPPOSED: Phillips, Pearce, Sharp Amendment #1 FAILED by a vote of 3 to 3. End SFC-97 #134, Side 1, Begin Side 2 SENATOR DONLEY MOVED Amendment #2. COCHAIR SHARP objected. SENATOR DONLEY explained that there should be a guarantee of public access to parking. There was additional discussion between SENATORS DONLEY and PHILLIPS, COCHAIR PEARCE and MR. PETTY about the issue of parking. COCHAIR SHARP withdrew his objection. Without further objection, Amendment #2 was ADOPTED. SENATOR DONLEY MOVED Amendment #3. COCHAIR SHARP objected. SENATOR DONLEY explained that the amendment dealt with parking fees for lower salaried employees. SENATOR PARNELL agreed with the concept but questioned how it would work. He also questioned the impact and practicality. MR. PETTY did not have the information before him to respond to the question. COCHAIR PEARCE inquired if the state paid parking for lower range employees of the court system. KEITH GERKEN, Gerken and Associates, Juneau, explained that there was no statewide policy. Some spaces were allocated to judicial officers, others were on a first come, first served basis. Some paid for their own parking by necessity because of lack of spaces. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Donley OPPOSED: Parnell, Phillips, Pearce, Sharp Amendment #3 FAILED by a 1 to 4 vote. SENATOR PHILLIPS noted a proposed letter of intent, stating that he would rather have it added to the language of the bill. It would protect people already in the building regarding standard of maintenance and parking. MR. PETTY spoke to the concerns, explaining that they would be bound to the existing leases and would honor existing rights. Additional discussion ensued among all members present at the table regarding existing tenant leases. SENATOR PHILLIPS MOVED the intent language as a conceptual Amendment #4. Without objection, Amendment #4 was ADOPTED. MITCH GRAVO, Lobbyist, Frontier Building Limited Partnership, commented that the department negotiated a sole source agreement to purchase the Bank of America building. He asked if and when the commissioner had made a written finding that the sole source negotiation was appropriate, and if so, he requested a copy. MR. PETTY responded that under AS 36.38.050, the acquisition of real property was not subject to that type of determination. SENATOR PHILLIPS MOVED the bill from committee with individual recommendations. SENATOR DONLEY objected for the purpose of further discussion. He had concerns that the proposal was unfair to Anchorage property taxpayers and suggested the state continue to pay property tax on the building. MR. PETTY responded that the state would continue to pay a portion of property tax for private interests remaining in the building, but would be exempt itself. SENATOR PHILLIPS expressed similar concerns regarding property tax as well as the sole source nature of the contract in light of the new proposal. SENATOR DONLEY withdrew his objection. There being no further objection, CSSB 178(FIN) was REPORTED OUT with fiscal notes from the Department of Revenue, and the Department of Administration (1823.0) and (<914.6>).
Document Name | Date/Time | Subjects |
---|