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Assembly OKs selling City Hall to Sealaska Heritage Institute, which plans to demolish building for new $40M complex
- Mark Sabbatini
- 16 hours ago
- 4 min read
Supporters say nonprofit has made significant improvements to downtown; opponents question if city getting fair value from $1.5M sale rather than an open auction
By Mark Sabbatini
Juneau Independent
This is a developing story.
Selling City Hall to Sealaska Heritage Institute for $1.5 million rather than auctioning the site for a minimum bid of $2.5 million was approved by the Juneau Assembly by a 6-3 vote on Monday night.
The Alaska Native nonprofit organization plans to demolish the 75-year-old building in favor of a new $40 million three-story structure featuring a glass-blowing studio, retail gallery for "high-end art" and other facilities. SHI President Rosita Kaaháni Worl, during public testimony before the Assembly debated the proposal, said the new building will be for "the long-term benefit of our community and cultural diversity."
"It'll be a crown jewel of Heritage Square," she said. "We are grounded in traditions, but we are also forward-looking in thinking and planning for our future, and a community that supports cultural diversity and well-being of its citizens."
The new site would create a five-building Sealaska complex along both sides of Heritage Way, including the headquarters of its for-profit corporation and four occupied by the independently run nonprofit established by the company. The other buildings include a retail gift shop, offices, historical exhibits, traditional crafts workspaces, and a recently opened Indigenous Science Building featuring digital as well as traditional activity areas.
Assembly members and residents supporting the sale to SHI noted the nonprofit’s other nearby buildings have been significant upgrades to what were sometimes dilapidated spaces. The Walter Soboleff Building that opened in 2015, for instance, replaced a "pit" left by the destruction of a historic building in a 2004 fire.
"As we move out of that space I think it is so important to think about what we leave in that space," said Assembly Member Alicia Hughes-Skandijs, who made the motion to approve the sale to SHI.
"I think it would be a no-brainer for us to leverage this opportunity that is going to result in maximum community good."
Among the residents testifying who opposed the sale to SHI was Paulette Simpson, a Douglas resident, who said she supports an auction in part because "over past several years an alarming number of properties have gone off the tax rolls."
"This is not the time to rush into a sale that would weaken our city treasury," she said. "We need more property on the tax rolls and not less."
As a nonprofit SHI is exempt from paying property taxes except for space it leases to for-profit operators. SHI, at a webpage dedicated to its City Hall replacement project, notes the organization pays taxes to the city from leased space in the nearby Walter Soboleff Building and Indigenous Science Building, and has contributed more than $13 million to the Juneau School District and University of Alaska Southeast since 2015.
Concern about selling the building to SHI without fully evaluating other options was expressed by Assembly member Neil Steininger, who joined Nano Brooks and Deputy Mayor Greg Smith in voting against the sale.
"I don't think it is prudent for us to go forward without either knowing how much this building is worth," Steininger said.
Also, while ensuring what becomes of the City Hall space is a community asset is a worthwhile goal, "I think we owe it to the public to walk through and say what these characteristics are that we're looking for here, and not just take kind of the first proposal that comes in front of us," he said.
City Manager Katie Koester, in a March 16 memo to Assembly members, stated the suggested $2.5 million minimum in a sealed-bid auction "was determined with input from the City Assessor."
A key selling point: "It is zoned mixed use, which means there is significant flexibility in how the land can be used," she wrote.
Assembly Member Christine Woll, who chaired the Finance Committee during months of hearings earlier this year when city leaders were trying to patch a $16 million budget shortfall said the sale of the building is one-time revenue and thus won’t fix the ongoing yearly deficit.
"There’s so many other ways to address our budget deficit," she said. "We just have to do that."
The alternative proposal on the Assembly’s agenda would offer City Hall in a sealed-bid auction with a minimum bid of $2.5 million. Both options were intended to recover some money being spent to relocate City Hall programs and offices to the first two floors of the Michael J. Burns Building, which is expected to be completed by next May at a cost of roughly $20 million.
Lee Kadinger, SHI’s chief of operations, said in an interview after the Assembly’s vote that he will consult with the city manager’s office before proceeding with the next steps of demolishing the old building and constructing the new complex.
Also discussed during the Assembly meeting was the fate of the 61-foot-long “Raven discovering mankind in a clamshell" mural on the outside wall facing Marine Park. Kadinger said "we've looked at a multitude of ways of preserving the memory of the mural," adding that "right now it's been defaced quite a bit."
Kadinger, in a previous interview, said he believes it will take about four years to raise the funds for the new building and construction will take about 18 months.
The 21,884-square-foot City Hall was constructed as a fire station in 1951 and renovated during the 1970s to serve as City Hall. The city has long leased additional space because the building isn’t big enough for all staff working downtown, which combined with the maintenance issues of the aging building has had Assembly members looking at new sites for several years.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
