Mayor Mark Begich signed the purchase agreement with Hickel Investments Dec. 14 for Valley River Center, setting in motion the development of a design and cost analysis to determine if purchasing the building jointly with the Alaska Club is possible.
Since then, the Municipality of Anchorage Office of Economic and Community Development Executive Director Mary Jane Michael and her staff have been crunching the numbers and trying to figure out how all the municipal services will fit into the 40,000 square foot space that was formerly home to the Alaska Marketplace grocery store.
With just 90 days from the signing of the purchase agreement to complete the due diligence, which includes a design and cost analysis, the municipality is moving on schedule.
“We just finished up the design layout, or floor plan, with the assistance of Rim Design,” said Michael. “It includes the layout for all the departments and divisions that will be in the town center when we close the deal. Now we'll start looking at how much it will cost to execute the design.”
Michael said laying out the space, including the library, a police substation and offices for the other municipal services wasn't without difficulty.
“One of the biggest challenges was figuring out how to deal with the high ceilings,” she said. “Right now, the ceilings are 14-feet high, and you will want to have some privacy in the offices, especially the police substation.”
To determine how to best use the space, the design team visited the Anchorage School District offices in the recently converted Boniface Center.
“They were effective in making the best use of space in what was also a former grocery store,” Michael said. “And they did it on a tight budget.”
Original plans for the space included the Anchorage Police Department substation, Eagle River-Chugiak Parks, Recreation and Community Development, Health and Human Services offices and the Chugiak-Eagle River branch library, but the current design includes three additional services.
“There will be a development services office, an assessor's office and a facilities maintenance office included in the new design,” Michael said. “We determined it would be beneficial to bring these services to the community.”
At the developmental services offices, residents will be able to apply for building permits and complete other planning and platting services. Municipal assessors servicing the Chugiak-Eagle River Area will work out of the local office, and the facilities maintenance division will be able to maintain the building and other municipal locations in the area.
“We also have an RFP (request for proposal) out for a coffee shop to be located near the library,” Michael said. “There is up to 1,500 square feet available to include the coffee bar and a shared seating area with the library.”
The completion of the design moves the project into the cost analysis of remodeling the space.
“We had to finish the design before we could move into determining the cost,” Michael said. “I'd say we're maybe a week or two away from having the cost for remodeling the space to optimize the use and determine if we have enough money available.”
The Chugiak-Eagle River Parks and Recreation advisory board has authorized the use of $1 million, and the library recently received a $1 million grant from the Rasmuson Foundation for the project.
The joint purchase agreement between the municipality and the Alaska Club calls for purchasing the building for $3 million, splitting the price down the middle. In addition to the $1.5 million to purchase the building, Michael estimated in October that it would cost approximately $2 million to retrofit the space.
To pay for the municipality's share, Michael plans to use parks and rec funds, the library grant and make up the difference with a variable rate loan from the municipality's cash reserves.
Michael estimated the remodeling would cost between $35 and $45 a square foot in November, but she wouldn't guess what the actual cost would be, choosing to wait for the cost analysis to be completed.
Alaska Club president Rob Brewster said his company was planning nearly $100 a square foot to remodel its portion of the building.
Michael believed the project would come in on budget, but said higher costs couldn't stop what residents have wanted for years.
“Even if the price comes in over what we initially projected, I'll go out and find the money needed,” she said.
Michael also reported that there has already been some interest in the 20,000 square feet of space in the building that will not be used by either the municipality or the Alaska Club.
“We've had several serious inquiries,” she said. “We need to meet with officials from the Alaska Club to determine how they want to deal with that portion of the building. Either leasing it or selling it outright to a third owner.”
With just 49 days remaining in the due diligence period, Michael is confident the final design and cost analysis will be completed for the Anchorage Assembly to consider before the March 13 deadline.
Reach the reporter at darrell.breese@alaskastar.com.
