Cost of City Hall move to Burns building now $18M instead of $14M for limited remodel
- Mark Sabbatini
- 24 hours ago
- 4 min read
Full remodel deemed too costly at $30M, up from $18M estimate in Sept.; Assembly advances plan to access $6M more for relocation via transfers from other projects, general fund
By Mark Sabbatini
Juneau Independent
The price tag for moving City Hall to the Michael J. Burns Building has jumped to $18 million for a partial interior remodel, $4 million higher than estimated in September, according to a presentation to the Juneau Assembly on Wednesday.
The cost of a full remodel with all features sought by city officials — which jumped to about $30 million instead of $18 million — is too high to merit consideration, City Manager Katie Koester told the Assembly members at a Finance Committee meeting.
"Those cost estimates had some sticker shock from the last cost estimate we brought you, and we said, ‘Don't worry, we're going to do some more design work and we're hopefully going to bring these numbers down,’" she said. "Instead we did more design work and those numbers just continue to escalate.”
The Assembly in September authorized the negotiation and purchase of two floors of the Burns Building from the Alaska Permanent Fund. Corp., after voters the previous two years rejected bonds to partially fund construction of a new City Hall. Both levels of remodeling include paying about $10.3 million to purchase two floors of the Burns building and putting $2.7 million into a fund for future maintenance.
Even with the higher cost, moving to the Burns building remains the only practical option since many downtown office spaces the city has occupied are either no longer available or soon will be unavailable, Koester said. City leaders have also said the move is more economical than trying to repair the aging existing City Hall and leasing space for staff that won't fit there.
Koester said the revised partial estimate came in higher than the amount she presented — $13 million rather than $8.5 million – but "we're committed to value engineering that number down to $8.5 million."
A memo presented by Koester details the differences between a partial and full remodel.
The partial remodel "includes paint, carpet, moving expenses, setting up IT and server rooms, locally purchased partial height dividers, demountable partition walls, accessories and installation for roughly 90 employees, a few interior walls to give supervisors private space for meetings, HVAC and electrical changes necessary for the floor plan, expanding Assembly chambers with a new/refreshed dais, and a public counter space/ reception area," according to the memo.
"The $8.5M estimate does not include a reversed floor plan that puts the management’s offices on the inside of the building and cubicles on the outside with the most natural light (we abandoned that some time ago due to cost). Nor does it include bathroom remodels or new furniture for employees not in cubicles."
The city has $14.5 million in a fund designated for a new City Hall and/or infrastructure upgrades. The current estimate is $20.5 million will be needed for the Burns purchase, limited remodel and maintenance funds held in reserve, according to Koester.
Assembly members unanimously approved having city staff draft a conceptual plan — mostly based on one presented by Koester — to allocate an additional $6 million for the move. Most of the money comes from shifting funds from the following projects:
• $2 million from the Capital Civic Center: The Assembly in 2022 approved an agreement allowing up to $10 million in cruise ship passenger taxes to be allocated for a civic center envisioned as a replacement for Centennial Hall at a total cost of roughly $60 million. The organization backing the project is seeking the remaining funds from federal and other sources, with construction of the facility likely a few years away. The Assembly last October approved diverting $5 million of the passenger fee funds to pay for additional HESCO barriers to safeguard Mendenhall Valley homes from glacial floods.
• $1 million from the North State Office Building Parking Garage. The project currently has $5 million in state funds and $1 million in local sales tax revenue set aside for it, according to Koester. However, she said engineering studies show the project will need significant retrofitting that will make it "prohibitively expensive," and thus recommended redirecting the local funds.
• $525,000 from Lemon Creek Multimodal path. Koester said the transfer will still leave $1 million set aside for the project "which will allow us to continue to pursue grant opportunities." However, she also noted the Trump administration has "deprioritized" such projects. Assembly members rejected a motion by Alicia Hughes-Skandijs to retain the funds by a 5-4 vote.
• $300,000 from the Waterfront Museum, which Koester called "a good project at the wrong time," and $175,000 from the River Road Junked Vehicle program which "is in a holding pattern while it works its way through the judicial system."
The Assembly rejected Koester’s recommendation to divert $2 million allocated for local capital improvement projects. She asserted that "utilizing this funding source does mean that projects needed today are sacrificed for those in the future. But an amendment by Deputy Mayor Greg Smith shifted that to using $2 million from the general fund, which prior to Wednesday’s meeting was projected to have an unrestricted balance of roughly $15 million at the end of the fiscal year on June 30.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
