NEWS: Legislators Call on DOT/PF to Delay Government Hill Demolition

Rep. Les Gara

Premature Destruction of Gov’t. Hill Residences Will Cost Alaskans Over $2 Million


                Sen. Johnny Ellis  and Rep. Les Gara (both D-Anchorage) wrote today to the Alaska Department of Transportation and Public Facilities on its plans to pay to demolish over $2.2 million in Government Hill residential properties before securing a necessary Federal loan.  "Destroying over $2 million in state property, when this project has not yet been approved, is a fiscally irresponsible use of state assets,” Rep. Gara said.  “Destroying property the state might otherwise sell could cost Alaskans over $2 million in a time of major budget deficits." 

                The letter is both attached and copied below.

     Alaska State Legislature
      Senator Johnny Ellis
      Representative Les Gara
      Official Business, State Capitol, Juneau, Alaska, 99801

July 9, 2014

Commissioner Patrick Kemp
3132 Channel Drive
PO Box 112500
Juneau, AK 99811-2500

Sent via email

Dear Commissioner Kemp:

We are writing to ask that you not spend state money to demolish three Government Hill neighborhood buildings and homes before you know whether you have the financing for the Knik Arm Bridge project.  That project is contingent on the approval of a federal TIFIA loan of roughly $300 million – a loan that is difficult to get.  That doesn’t include the bigger problem that the legislature’s $900 million financing plan only covers roughly half the cost of the bridge, connecting roads and infrastructure that will be needed.  The plan does not include a way to raise the next $900 million that will be needed.

If state does not receive a TIFIA loan, demolition will cost over $2 million for properties the state owns and can sell.  It is fiscally imprudent to throw away over $2 million when we are facing major budget shortfalls.  In addition to the property loss, you will have to pay for the cost of demolition.

I would ask that you reconsider your demolition project.  As you know, the Erickson house had a 2013 assessed value of $279,000, the Harvard Street home had a 2013 assessed value of $402,000 and the Sourdough Motel, which could be sold to responsible owners in the future, had an assessed value of $1.6 million in 2013.  Assessed values are normally lower than actual market value, so the state may be paying to demolish over $2.5 million worth of state property.

Thank you.

Ellis electronic signature                                                            Ellis electronic signature
Rep. Les Gara                                                                                                    Sen. Johnny Ellis

cc: Government Hill Community Council



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