Updated: September 28, 2016 
Published March 31, 2016 
JUNEAU — A committee of the Alaska Legislature on Thursday evening voted 13-1 to offer to buy lawmakers' Anchorage offices for $32.5 million from developers Mark Pfeffer and Bob Acree — a decisive step after months of deliberation over whether to move to a cheaper, state-owned building nearby.
The catch: Pfeffer and Acree haven't agreed to sell at that price. Their last offer, which came after a lawmaker's request earlier this week, was $34 million.
"We are glad they came to a decision," Amy Slinker, a spokeswoman for the developers, said in a prepared statement Thursday night. "Now we have something to talk about. We are going to analyze it and get back to them soon."
Sen. Gary Stevens, R-Kodiak, sounded uncompromising.
"We have drawn a line in the sand," said Stevens after the meeting of the Legislative Council, which he chairs. The 14-member House-Senate committee is charged with handling the Legislature's internal business and budgets.
"I think we'll not budge off that price," Stevens said after the committee heard from Pfeffer and Pfeffer's attorney, and went into executive session to discuss the Anchorage Legislative Information Office, where nearly half of the Legislature's 60 members have office space between sessions in Juneau.
Among the participants in the closed-door deliberations was Mike Abbott, Anchorage's city manager, who was there on behalf of Mayor Ethan Berkowitz's administration.
Berkowitz's administration has previously said it could act as a third-party broker to resolve the dispute over the lease — potentially by buying the building and leasing it back to the Legislature.
"There were questions about that, and I was there to answer them," Abbott said in a brief interview after he left the meeting.
Stevens said later that it's possible the city could finance the deal, though he added that no details have been worked out yet.
The council, which is packed with members of the Republican-led majorities in the House and Senate, had only one dissenting vote on the offer to buy: Rep. Mark Neuman, R-Big Lake.
"I don't think it's the building that the public wants us to be in," Neuman said.
Pfeffer, who owns his own development company and manages the landlords' partnership, 716 West Fourth Ave. LLC, left the meeting without answering reporters' questions.
The landlords' original asking price for the building was $37 million.
An independent analysis recently commissioned by lawmakers found the current offices' per-square-foot costs would match the Atwood Building's over a 20-year period if the purchase price fell to $35.6 million.
But because the Legislature needs less room in the Atwood Building, the price of the Fourth Avenue space would have to fall $29.2 million to match the overall cost.
Pfeffer said at Thursday's meeting that he'd dropped his first offer to $35.45 million in response to an initial offer from Stevens to buy the building for $32.5 million. He then dropped it again, to $34 million, after Rep. Bob Herron, D-Bethel, the council's vice chair, asked the landlords for a compromise number this week.
The offer approved by the council Thursday, Stevens said, is "what we think it's worth."
"And it's up to him to decide whether he wants to accept that or not," Stevens said.
Sen. Lyman Hoffman, D-Bethel, said the offer was less than the landlords spent on the building, but added that they'd been caught in the middle of the state's budget crisis, with lawmakers trying to close a $4 billion budget deficit.
"He came through and did everything the Legislature asked him to do at just about every step," said Hoffman, referring to Pfeffer. "Many legislators felt we had an obligation to purchase the building, which was probably the most unpopular step with the public."
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Malamute Matt
Mar 31, 2016
Beyond belief, but not unexpected. They "felt they had an obligation" to the developer? I sure wish they were half as diligent about their obligation to the people of this state.
At this point, I think all this self-entitled and self-serving group deserves is a few rusty connex containers down on the mudflats at Ship Creek. They can keep their automatic trash cans. The darned things never work right anyway.
Charles W. Bingham Jr.
Apr 1, 2016
If any of you are in their district, you could start a "recall". The steps are on the state's website.
Charles W. Bingham Jr.
Apr 1, 2016
The recall procedure is here
https://www.elections.alaska.gov/pbi_rc_gi.php
Douglas Meeker
Apr 1, 2016
In reply to:
Beyond belief, but not unexpected. They "felt they had an obligation" to the developer? I sure wish they were half as diligent about their obligation to the people of this state. At this point, I...
— Malamute Matt
Totally agree!!
Jake Jacobson
Apr 1, 2016
I've often thought we citizens might be better off if Legislators were selected by lottery to serve for 2 or 4 years - a bit like selective service time. I suspect we would at least be no worse off than we are under the system we have currently. But in any case, strict ETHICS RULES - with appropriate penalties for violation thereof - must be put in place, lest we continue to be fleeced by those who are supposed to represent our interests.
Jedediah Smith
Apr 1, 2016
Selected by lottery? That's actually not the worst idea. Kind of like jury duty? Novel concept.
Undeclared
Apr 1, 2016
We certainly couldn't do any worse than this current majority.
907Bob
Apr 1, 2016
Curious to where the money is supposed to come from for this purchase. More senior cut? As deep in red as this state is in, I did not realize we had 32mil just laying around for them to do whatever "they" choose. Not only is it bad optics, but we have representatives who are completely out of touch with their constituency. I hope to see new names on the upcoming ballot. No incumbent will get my vote.
J. Frank Parnell
Apr 1, 2016
"Not only is it bad optics, but we have representatives who are completely out of touch with their constituency."
Which constituency? It certainly can be argued that the voters in their districts aren't their most important constituency.
Gail Heineman
Apr 1, 2016
In reply to:
Curious to where the money is supposed to come from for this purchase. More senior cut? As deep in red as this state is in, I did not realize we had 32mil just laying around for them to do...
— 907Bob
Maybe they plan to sell bonds - you know, after they've wrecked the State's credit rating by their inaction on the budget plan?
JC
Apr 1, 2016
I hope ADN will publish the vote. So we can know who to vote out. We will have empty school buildings from the condensing as population decreases, so there's another option in addition to the connex idea from Malimute Mike.
Another Commenter for Hire
Apr 1, 2016
Here are the members of the Council that voted for this. Are any of these yours?
Bob Herron (Vice Chair), Gary Stevens (Chair)
Mike Chenault, Kevin Meyer
Mike Hawker, Lyman Hoffman
Craig Johnson, Anna MacKinnon
Charlie Huggins, John Coghill
Charisse Millett, Peter Micciche
Steve Thompson (Alt), Lesil McGuire (Alt)
JC
Apr 1, 2016
Thank you and I wasn't voting for Kevin Meyer anyway. ! No incumbents
52yrsanAKn
Apr 1, 2016
In reply to:
I hope ADN will publish the vote. So we can know who to vote out. We will have empty school buildings from the condensing as population decreases, so there's another option in addition to the...
— JC
An empty school building strikes me as the perfect answer to this situation. A win-win-win for the legislature, ASD and the citizens. Mark Pfeffer will do just fine. After years of sweetheart deals between our government representatives and a few select developers, one of them finally went south. Surprised it hasn't happened sooner and more frequently...
Jackiet
Apr 1, 2016
I've been very frustrated with most of Neuman's actions in the past but I must say, I'm glad to hear he actually voted for what his constituents wanted for once, even though it wasn't the popular vote.
John McDowell
Apr 1, 2016
"We have drawn a line in the sand" Sen. Stevens said to Pfeffer.. "we` the state of Alaska, offer 33 million for a building that might be worth 22 million in the face of this economic downturn".
Sounds like Senator Stevens remembers Br`er Rabbit and the briar patch.. (well ok, we`ll take your last and final (wink wink) offer of 33 million if it includes paying my future court costs from this lawsuit down the road...). Trying to convince us this is somehow a good investment and an Engineering Building in Fairbanks isn`t....
Michael Albertson
Apr 1, 2016
As I understand this goat rope with the new LIO in Anchorage the costs were roughly $675,000 per year before the move to the new LIO. That's $13.5 million for 20 years although those costs could have increased over the next 20 years. What I cannot understand is why it would cost almost $30 million to move into the Atwood building now and rent for the next 20 years. This doesn't include costs to the state for outfitting the new LIO which were substantial.
Rep. Newman is spot on for once is the public not wanting the legislature in the new building. A hugh waste of state funds at a time when the state doesn't have the revenue to spend.
I suggest the area legislators find reasonable office space in their own district rather than buying a building we cannot afford and should not be in.
Richard Corbeil
Apr 1, 2016
Well now we have proof, there is no way we can live without an income tax and a raid on the PF. Oh while we're at it, we better also have a sales tax and a VAT tax as well, double property tax and oh goodness, what else can we tax, we just need more money, yes, that's the answer, oh and cut road maintenance and state troopers and everything else that does not equate to the comfort of our legislators. I mean really, is there anything else more important in the universe?
Oops Said It Again
Apr 1, 2016
Don't forget the $100-$500 education head tax that Bishop introduced last session. The head tax will be based on income if it makes it to the House and Senate floors.
JoeLoMonaco1
Apr 1, 2016
I have lived in Anchorage for over 47 years now, 40 of which I have been a commercial real estate broker or associate broker. I have never been in favor of the gov't purchasing real property for gov't use for the following reasons:
* Seldom, in the final analysis, has it been demonstrated to be cost effective.
* Class A office is not necessary for govt offices. For my entire real estate career, I have occupied high Class B space and found it very suitable.
* I believe that gov't should not compete with taxpayers by owning properties available for lease in pvt. sector ownership.
* Alaska is broke, we simply can't afford it. It's not cost alone that is of issue. $33 mil will be taken off the tax rolls and the burden will be absorbed by we individual taxpayers. Unjust! .....
* Finally, this massive type of expenditure should never be negotiated in a "Back Room" environment. It should be put out for competitive bid. There are high Class B offices available now for immediate lease.
Jeff Schmitz
Apr 1, 2016
Well put Joe!
Rudy Wittshirk
Apr 1, 2016
I've been critical in the past of Rep. Mark Neuman, R-Big Lake. However, I'm impressed to see he gets this issue: “I don’t think it’s the building that the public wants us to be in,” Neuman said.