MV's are not the newest toy to play with...
With MV there would be only the low maintenance, so no chance for lobbying dealers to reach for the huge public money.
LED's are seen as novelty by the public, with lot of mystery and admire, with lot of noise about their excellent efficacy (well, compare to flashlight incandescent, but this is not stressed as much), so for officials it is not as difficult to "defend the investment", mainly when supported by some luxury dinners, travels (or sometimes an envelope) from the dealer...

The biggest problem with LEDS is heat removal, and they pick one of the US's hottest cities? Why not Anchorage?

Actually many cities and towns in Alaska are converting to LED, including Anchorage.  A year ago the city of Fairbanks installed a test group of LED fixtures to gauge reliability, energy savings and public reaction to them.  Since that initial test group was installed, I've seen more of them going up, so I guess the city was satisfied with them.  The public seems to prefer their white light to the gold light of HPS.

Of course they are going to see a drop in energy usage because the conversion to HPS was sloppy when it was done.  Many minor city streets are lit with low mounted 250-400w HPS glarebombs.  I'm not sure if that was because they matched the wattage of the old MV fixtures they replaced, or used whatever was handy.  The LED conversion seems to at least be using appropriately sized lights.  Maybe if they had done that when they put the HPS lights up they wouldn't be replacing them again 15-30 years later.