ANCHORAGE, Alaska (Legal Newsline) – The Alaska Supreme Court rejected a compensation claim made by a property owner in Anchorage who opposed plans by a state agency to expand and renovate a building to be used as government offices.

The high court said that while the compensation claim was not frivolous as alleged, it had no chance of success.

According to the Aug. 25 opinion, the Legislative Affairs Agency, a state agency, and property owner of 716 West Fourth Avenue LLC took out a lease agreement for a planned expansion of the state’s Legislative Information Office (LIO) Building located in downtown Anchorage in 2013. 

Plans called for a renovation-expansion of the building in which an adjoining building on the site would be demolished to make room to enlarge the facility.

The new building would go from approximately 24,000 square feet in size to 64,000 square feet.

The opinion stats that Alaska Building Inc., owner of the property next door to the LIO building, filed a lawsuit in March 2015 challenging both the new lease agreement and the planned expansion. The plaintiff contended that the lease agreement violated state laws because such a major demolition-expansion required competing bids from other companies, and the project was not an extension of a former agreement (lease) but for renting a new building.

According to a report by Alaska Public Media, the $7.5 million project would have resulted in a five-fold increase in the price of rent.  

The plaintiff also alleged the project was negligently designed, managed and constructed and had resulted in damage to his nearby building.

The complaint sought both invalidation of the lease agreement and money compensation estimated as a percentage of savings once the lease was invalidated.

The superior court agreed to invalidate the lease agreement but refused the compensation claim, stating that such a claim was “frivolous” and had no basis in Alaska law. The superior court granted the Legislative Affairs Agency $2,217 in attorney fees based on the frivolous finding.

Alaska Building Inc. appealed the compensation decision to the Alaska Supreme Court.

The high court reversed the superior court decision, deciding that the compensation claim was based on a “non-frivolous” argument because it called for the establishing of a new law to clarify the matter. However, the court also said Alaska Building Inc. had made the compensation claim without the legal research to support it and would fail.

The Alaska Supreme Court recommended imposing the modest attorney fee reward ($2,217) as a way to discourage future such claims.  

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Alaska Supreme Court
303 K Street
Anchorage, AK - 99501

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