Municipality of Anchorage finalizes controversial purchase of Midtown hotel for use as drug and alcohol treatment center

The municipality on Tuesday finalized its purchase of the Best Western Golden Lion Hotel in Midtown Anchorage, which it has planned to use as a drug and alcohol treatment center.

It’s the first closing of four buildings the city hopes to buy as it works to take a more comprehensive approach to addressing homelessness in Anchorage.

According to the Alaska Recorder’s Office, the deal was finalized Tuesday morning.

The sale price was $9.3 million, according to Carolyn Hall, a spokeswoman for the acting mayor. The city inspected the hotel, at 36th Avenue and Seward Highway, and determined no major renovations were needed. Staff will now make minor repairs before handing the building over to the health department.

Health officials will soon put out a request for proposals for an operator of the facility, said spokesman Ira Slomski-Pritz. There isn’t an estimated date yet for when the facility will be operational.

“Not only is the purchase an investment in an array of mental health services, but an investment in our local economy,” Acting Mayor Austin Quinn-Davidson said in a statement. “This dire need has been left unaddressed for too long and I’m thankful to our partners and the Assembly for making this transformational investment possible.”

The treatment center is expected to serve 75 to 100 people at a time. According to the city, the demand for treatment services has increased over the years while availability of services has decreased. The center will focus on people with long-term addiction to alcohol.

City officials acknowledged their interest in the Golden Lion and other buildings in June. The plan instantly sparked intense controversy when nearby residents feared a treatment center would lead to increased crime and lower property values.

Residents of the Geneva Woods, College Village and Rogers Park neighborhoods started regularly attending Assembly meetings over the summer to testify in opposition to the plan to purchase the Golden Lion, and they held protests outside of the meeting chambers.

Public testimony on the plan stretched over multiple meetings as dozens of people came to testify in opposition.

The Golden Lion was purchased with $15 million in proceeds from the sale of the city’s electric utility, Municipal Light & Power. Creating a treatment facility was outlined in the sale agreement to Chugach Electric Association Inc. The remaining money can be used for repairs.

The Assembly authorized using $12.5 million in CARES Act funds to purchase the other three buildings — Bean’s Café soup kitchen, Americas Best Value Inn & Suites and a third, yet-to-be-determined location.

Slomski-Pritz said there is no update on the status of those purchases.

Opponents had argued the city’s plan to buy the buildings with federal CARES Act money was illegal. The Anchorage Assembly gave approval for the city to pursue the purchase of the four buildings, using CARES Act money for three.

After complaints by residents were lodged with the U.S Treasury, the city met with federal officials who suggested the city route CARES Act money through first responder payroll, and then purchase the buildings with offset general fund dollars. That is the plan the city pursued.

In November, the city announced it was abandoning its plan to purchase a former Alaska Club building on Tudor Road. It wanted to use the building for day and overnight shelter, but renovations were going to be more costly than thought.

A city spokesman said the city is looking at other properties to house day and overnight services.