Company behind giant oil project will be main tenant in renovated downtown Anchorage building

Oct. 11—Representatives with the oil and gas company Santos said Wednesday that it will move its Alaska headquarters to downtown Anchorage from Midtown next year.

Santos will occupy most of the former Key Bank Plaza building, they said. Work crews are wrapping up a $41 million overhaul at the building that began more than two years ago.

Downtown advocates say Santos' move will be a shot in the arm for the city's core business district, which has languished during the pandemic.

The Australia-based oil company, which is pursuing development of the giant Pikka oil project on the North Slope, plans to make $13.4 million in tenant improvements before moving into the building, according to municipal permitting records released Wednesday.

The newly upgraded building is now called 601 Fifth Ave. It's distinguished by a glass facade with an overhanging entrance inspired by glaciers.

The renovations at the building created a "White Box Finish," meaning leasable floors within the building are a blank slate so tenants can make improvements suiting their needs, according to an article last year in Alaska Business magazine. The improvements include plumbing, electrical and mechanical work, permitting records show.

Santos is planning to make tenant improvements covering seven of the building's nine floors, from the third floor to the top floor, permitting records show. The improvements will create Class A office space covering about 89,000 square feet, spokespeople with Santos said in emails Wednesday.

The move to downtown is expected to take place by July, they said.

When its new offices are ready, Santos plans to leave the former BP building at 900 E. Benson Blvd., where it currently occupies two of the building's 14 floors, Santos spokespeople said.

Santos' employee and contractor workforce has grown as the Pikka project has advanced, they said. Santos expects to employ about 400 by the end of next year.

The former Key Bank Plaza building was battered and left vacant by the 2018 Anchorage earthquake. Its renovation is the first for a major office building in downtown since the completion in 2014 of what's now the Anchorage Police Department headquarters on Fourth Avenue.

Santos' planned move comes as businesses downtown are still recovering after the pandemic caused tourism to plunge and restaurants and bars to shut their doors.

Radhika Krishna, executive director of the Anchorage Downtown Partnership, said the downtown group is eager to welcome new businesses and workers to the area.

"Seeing some of downtown's commercial space filled with new employees that support small businesses and restaurants is exactly what we want to see in downtown," she said.

Jenna Wright, president of the Anchorage Economic Development Corp., said companies and partners involved in the Pikka project will visit the Santos headquarters for meetings and other reasons, bringing more year-round visitors to downtown.

That will spur investment in new small businesses downtown, she said. "The economic benefits to Anchorage's downtown will be huge," she said.

Santos chief executive Kevin Gallagher first announced the news in June at a private event organized by Santos and held at the Alaska Native Heritage Center in Anchorage.

Gallagher said the company in May signed a long-term lease at the building, according to a transcript of his comments provided by Santos spokespeople.

Gallagher told the crowd, which included Anchorage business leaders and others, that Santos is "thrilled" to be taking steps that will help revitalize downtown Anchorage.

"We drove by it on the way here this evening and I can't wait to see the Santos logo on the building," Gallagher said.

Santos' relocation could increase the vacancy at the 14-story former BP building. That building has largely sat empty after BP in 2020 sold its Alaska holdings to Hilcorp Alaska, which is headquartered in the JL Tower building at 3800 Centerpoint Drive in Midtown.

The former Key Bank building is owned by 601 Fifth Ave., an affiliate of Peach Holdings, co-owned by Derrick and Terence Chang.

Peach Holdings also owns the site of the former 4th Avenue Theatre in downtown Anchorage, located on the same block. The historic theater was demolished last year in a major redevelopment effort. Plans there call for the creation of a mixed-use building, with hotel, office, retail, housing, parking and entertainment space.