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Anchorage mayor seeks up to $2 million for port litigation

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Posted: Thursday, October 25, 2012 9:22 am | Updated: 11:52 am, Mon Jan 21, 2013.

ANCHORAGE, Alaska - Anchorage Mayor Dan Sullivan is seeking up to $2 million from the Port of Anchorage's budget to hire lawyers to represent the city's interests in lawsuits over the port expansion project, which has run up against construction problems and cost overruns.

The money would be in addition to the $500,000 contract the city already has with the firm Seyfarth Shaw, the Anchorage Daily News reported Thursday (

"The Port of Anchorage is unquestionably critical infrastructure for the Municipality and the State of Alaska, and substantial work is needed to correct deficiencies in the work performed to date," Sullivan said in a memo to the Anchorage Assembly. "The Municipality is the only entity willing and able to lead litigation to recover the additional cost of correcting the work from the parties responsible."

Critics have complained of cost overruns and construction problems on the multimillion-dollar project. E stimates of the port expansion project have ballooned to $1 billion, up from $360 million in 2005.

The design of the expansion project changed from a traditional dock-on-piling port to a design with U-shaped cells. The intent was a new 1.5-mile-long steel dock and berths for larger ships. Backfilling is intended to create 135 acres of new land for operations. However, the steel was damaged when it was installed three years ago, and recent construction seasons were used to repair damage. Sullivan has sought to scale back the project.

Beyond saying the $2 million would come from the port's budget, Sullivan declined to discuss the request during his weekly press briefing Wednesday. He said it was discussed with the Anchorage Assembly during a closed, executive session Tuesday.

"Bottom line is there was an executive session yesterday that both the Assembly and the mayor and some of my staff attended. And everything discussed in the executive session is not to be discus sed," Sullivan said.

"I think the key word is 'up to' $2 million," Assembly member Jennifer Johnston told the Daily News. "The port is one of the municipality's largest assets. And if there are legal issues with one of our largest assets, then I want to have the best and the brightest, the top guns, working on it. Because ultimately, we have to finish the port."

Johnston's Assembly committee has oversight of the port, where an estimated 90 percent of all goods coming to Alaska are offloaded.

Several state and federal lawsuits over the expansion project are pending, but the city is not a direct party to any of them or a recently settled claim filed against the former lead federal agency on the project, the U.S. Maritime Administration. However, the city has interest in recovering money spent to correct the damaged work.

Seyfarth Shaw was initially hired in July and has since been concentrating on the "complex legal and factual issues involving the Project," Su llivan's memo said, adding lawyers are working with the U.S. Maritime Administration in defending claims from contractors.

The engineering firm CH2M Hill has completed a draft study of whether the port project can be built as it was designed. Sullivan is declining to discuss the study after signing a confidentiality agreement with the U.S. Maritime Administration.

Sullivan said the draft study will become public Nov. 9 when the Anchorage Assembly and the city's Geotechnical Advisory Commission are briefed on it.

That will be three days after the general election, in which voters will be asked to approve a $453 million bond proposal for projects statewide. Included in the proposal is $50 million for the Port of Anchorage.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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