Want to buy City Hall for $2.5M? That may be just the minimum bid
- Mark Sabbatini
- 8 hours ago
- 3 min read
Assembly to consider sealed-bid auction, other options for selling 21,884-sq.-ft., mixed-use building from 1950s as CBJ moves operations to Michael J. Burns Building
By Mark Sabbatini
Juneau Independent
You may not be able to beat City Hall, but you can own it.
Although by the time the deal closes the building at 155 Heritage Way presumably won’t be the headquarters of Juneau’s municipal government any longer, since that is being relocated to the Michael J. Burns Building about a mile away. But the next owner will take over a quarter-acre lot with a two-story, 21,884-square-foot building right across the street from Marine Park and the 1.7 million cruise passengers now arriving annually.
While it’s a big building in a premier location, city leaders have also spent years saying it’s quite a fixer-upper (as in more than $14 million for structural, safety and systems repairs). So on Monday night the Juneau Assembly, meeting as the Committee of the Whole, is scheduled to consider options for a possible sale, with the foremost being a sealed-bid auction with a $2.5M minimum.
"The minimum bid amount was determined with input from the City Assessor," City Manager Katie Koester wrote in a memo to the Assembly.
One big selling point: "It is zoned mixed use, which means there is significant flexibility in how the land can be used," she wrote.
The building 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.
Moving to the Burns Building is expected to take at least a year, but Koester’s memo states dealing with the current City Hall "will require significant time."
"The Lands Division estimates disposal will take 9 months, with an additional 3-4 months and $15,000–$20,000 required if an appraisal is needed," she wrote.
The suggested $2.5 million minimum bid is far below the projected $18 million cost of purchasing and remodeling the first two floors of the three-story Burns Building. However, city leaders have emphasized the cost of remaining in the current building — and making necessary repairs — along with continuing to lease surrounding space will be considerably more costly when looking ahead 20 years.
Among the major decisions the Assembly will need to make are how members want to sell the building and if restrictions will be placed on how a new owner uses it — which probably will result in a lower price, according to Koester.
A sealed-bid auction that allows the winner to develop the site as desired within existing codes will likely mean the most money for the city, she wrote. It’s also the most common way CBJ disposes of property and a draft ordinance for such a sale of City Hall is in the agenda for Monday’s meeting.
"A minimum bid is set and there is a period where bids are collected by sealed envelope with a $500 application fee," she wrote. "During that time we may have site visits arranged for interested parties and provide information that is publicly available on the conditions of the facility and any relevant details. All of the envelopes are opened at once and the manager brings an Ordinance to the Assembly to dispose of the property to the highest bidder."
Other possibilities are a live "outcry auction," a direct negotiated sale to a buyer expressing interest and a lottery sale "where applicants purchase a $25 ticket for the chance to buy the property at fair market value," according to Koester.
City leaders can also decide to put conditions on a property sale.
"For example, a proposal could be a sealed competitive bid proposal with a minimum bid of $2.5M that would be rated on the criteria of a) advancement of assembly goals; b) public benefit; and c) year-round occupancy," Koester wrote.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
