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SHI unveils plans for $40M complex to replace City Hall, seeks to get site at a discount
- Mark Sabbatini
- Aug 4
- 4 min read
New building with cultural tourism and education facilities would supplement programs on adjacent properties; offer of $1.5M is below proposed $2.5M minimum auction bid
By Mark Sabbatini
Juneau Independent
Demolishing the aging City Hall and replacing it with a three-story building featuring tourist attractions, year-round cultural activities, and possibly a relocated city museum is being proposed by Sealaska Heritage Institute.
But because SHI estimates the new structure will cost $40 million to build, it doesn’t want to pay a suggested $2.5 million or more to buy the existing City Hall in an open-bid action just so the building can be torn down. Instead, the Alaska Native nonprofit is offering $1.5 million for a purchase that bypasses the auction process.
"Right now we don't have $40 million to spend, and the cost to tear that down and mitigate all of the asbestos, the lead paint, and the heavy metals that we know are underneath," Lee Kadinger, SHI’s chief of operations, said in an interview Tuesday.
City officials have estimated City Hall needs more than $14 million in structural, safety and systems repairs. Kadinger said that makes him question the rationale — and likelihood — of a $2.5 million minimum bid if the building is put up for auction.
"City Hall is not an asset," he said. "City Hall is a liability because of the costs there. There have been no appraisals of what the building is worth that we could even lean on. So while we respect the city's request for a $2.5 million minimum bid, I feel it's a little hopeful."
Both proposals are scheduled to be discussed at a Juneau Assembly meeting on Aug. 17, including an opportunity for public testimony. The Assembly has approved moving City Hall to the first two floors of the Michael J. Burns Building, on the premise that it will be less expensive than remaining in current space, with that relocation now scheduled for next May.
SHI on Tuesday issued a press release featuring illustrations of its proposed building, which were published last month by KTOO. The institute estimates the building would be about 30,000 square feet, making its footprint roughly comparable to the 21,884-square-foot City Hall that has two stories.
A glass-blowing studio and retail gallery for "high-end art" are among the prominent features detailed in the press release, which also notes it would offer various hands-on programs aimed at tourists and residents.
On the second floor, SHI states it would "give the city first right of refusal to relocate the Juneau-Douglas City Museum to the second floor of the building." But whether the city would want that option is questionable.
Catherine Melville, who as director of Juneau Public Libraries is overseeing the museum after the budget cuts, stated in an email to the Independent on Tuesday that "CBJ is not considering moving the Juneau-Douglas City Museum at this time."
City Manager Katie Koester, in a May 4 memo, noted the 8,000-square-foot second floor would be 2,000 square feet bigger than the current museum, which last month cut back its staff and operating hours due to budget cuts made by the Assembly in the wake of voter-approved tax reductions.
"At market rate…it is difficult to imagine a scenario where CBJ is able to recoup personnel and lease costs in ticket sales, regardless of location," Koester wrote.
Kadinger said if SHI provides space to the city under a tax-exempt community-use provision the lease amount "cannot charge more for the space than what it costs us to operate that space." He said that would be significantly less than what might be charged to a for-profit operator.
"We feel that it's a good marriage between SHI and the city…because we have curators, we have archivists, we have a lot of people that work with us and so why not be able to share those resources?" he said.
SHI is also considering setting aside some space for apartments in recognition of the community’s housing needs, as well as its own employees," the release notes.
Kadinger said he believes it will take about four years to raise the funds — and the $40 million estimate includes cost increases occurring during that time — and construction would take about 18 months.
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.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
