Bank threatens to sue the state for 28M over LIO move

first_imgThe sign outside the Anchorage Legislative Information Office. Photo: Megan AhlemanIn a letter sent Tuesday to the state’s Legislative Affairs Agency, lawyers for the bank handling a $28.6 million loan to finance renovations of the Legislative Information Office say they will sue the state if it doesn’t honor its lease agreement.Download AudioThe letter is signed by Robert H. Hume Jr. of the law firm Landye, Bennett, Blumstein, which represents EverBank, the company holding the debt taken on by the building’s developers.“EverBank demands that the LAA reaffirm and establish that the Tenant Lease is in full force and effect,” the letter reads, “and cease any and all efforts to invalidate the tenant lease, vacate the property, or secure alternate lease premises.”If lawmaker’s abandon the lease or opt not to purchase of the 4th Avenue building, EverBank will go after damages of up to $27.5 million, not including additional expenses from litigation.In March, a state judge ruled the lease agreement over the LIO was invalid because it violated state rules for competitive bidding. The decision left lawmakers with the option to buy the building outright for $32.5 million under threat of veto from Governor Bill Walker, move the LIO to the state-owned Atwood building, or look for an alternate space.But lawyers for EverBank write that the invalidation doesn’t mean the state is off the hook for honoring a lease agreement it originally signed off on. Citing a Subordination, Non-disturbance and Attornment agreement from December 22nd, 2014, the letter says EverBank only agreed to lend funds after the state made promises to uphold its lease agreement. If the lease is invalid, the letter says, “then each of the express representations made by the LAA…were false.”The letter solidifies what many have wondered for months about whether the state could open itself up to a financial liability worth as much or more than the option to buy the LIO building.In a separate action on Tuesday night, the Anchorage Assembly voted 7 to 4 on a resolution asking lawmakers to keep the LIO building downtown, rather than move it to the Wells Fargo in the Spenard neighborhood.The measure’s sponsor, downtown Assembly Member Patrick Flynn, said the switch in location goes against the city’s long-term comprehensive development plan.Wednesday afternoon, the Senate Finance Committee advanced a capital budget leaving $12.5 million dollars in place for the Wells Fargo building. That version of the capital budget goes before the Senate Finance standing committee at 10 a.m. Thursday.As of Wednesday afternoon, Legislative Council chair Sen. Gary Stevens, R-Kodiak, had not returned a request for comment.Correction: an earlier version of this story stated the capital budget was to be heard by the full senate.last_img