Fate of aging City Hall may be decided by Assembly on Monday night

Ordinances for auctioning building with minimum bid of $2.5M and selling it to Sealaska Heritage Institute for $1.5 on agenda for public testimony, possible vote

City Hall, foreground, and Sealaska Heritage Institute’s Indigenous Science Building on Friday, Aug. 14, 2026. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

People gathering inside City Hall on Monday night may be getting their final chance to say what happens to the 75-year-old building as the Juneau Assembly is scheduled to consider two sale options.

One would put the building up for auction, with a suggested minimum bid of $2.5 million. The other would sell it to Sealaska Heritage Institute for $1.5 million, with the Alaska Native nonprofit proposing to demolish the 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.

The meeting is scheduled to begin at 6 p.m. in the Assembly Chambers. Public testimony will be allowed on proposed ordinances for each option.

Both options are intended to recover some money being spent to relocate City Hall programs and offices to the first two floors of Michael J. Burns Building, which is expected to be completed by next May at a cost of roughly $20 million. City leaders say the move is more cost-efficient than remaining at the existing building, which needs more than $14 million in repairs, plus paying the cost of leasing additional downtown space.

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.

Sealaska Heritage Institute, in a webpage dedicated to its proposed new building at the site and the reason for its $1.5 million bid, states the rationale for the $2.5 million cited by Koester wasn’t made public. The nonprofit states an assessment of surrounding properties, along with the repairs needed to City Hall, justifies SHI’s offer.

"We are left to conclude that the city is appraising the City Hall property at $2.5 million because they are putting a large value on the building, which is contaminated by hazardous materials and would cost $15 million for clean-up and repairs to the structure, according to the city," the website notes. "SHI sees the building as a liability — not an asset — and the institute would have to raze the structure and remove the hazardous substances at considerable cost."

Another concern raised by some city leaders is SHI, as a nonprofit, will be exempt from paying property taxes except for space it leases to for-profit operators. SHI’s webpage notes it has paid taxes to the city from leased space in the nearby Walter Soboleff Building and Indigenous Science Building.

Acquiring the City Hall property and placing a new building there would give Sealaska a five-building complex along both sides of Heritage Way, including the headquarters of its for-profit corporation and four occupied by the independently run nonprofit SHI established by the company. The other SHI buildings feature 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.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.