Anchorage will again pursue purchase of former Alaska Club for homeless shelter

Anchorage city officials are again pursuing the purchase of the old Alaska Club building on Tudor Road in Midtown for homeless services, which they described as a key part of a plan to transition away from using Sullivan Arena as a mass emergency homeless shelter.

Acting Mayor Austin Quinn-Davidson on Friday announced that the city has entered into a contract to purchase the building for $5.436 million. It would become a 125-bed congregate emergency shelter and resource hub for people experiencing homelessness.

The Sullivan Arena has operated as a mass homeless shelter for the last year. About 400 people are currently housed there. But the city says it must stand down the shelter and return the Sullivan to its original purpose by the end of September.

Quinn-Davidson said creating a new, smaller emergency shelter site in the city is critical.

But the city will not close on the agreement until July 9, leaving it up to the incoming mayor to decide whether to complete the purchase.

Dave Bronson is on track to win the runoff race for Anchorage mayor, and the Assembly is scheduled to certify the election results Tuesday. He would take office July 1.

The city previously pursued purchasing the old Alaska Club at 630 E. Tudor Road as part of a plan launched last summer by former Mayor Ethan Berkowitz to purchase four buildings for homeless and treatment services in Anchorage. The Assembly approved pursuing the purchase of three of those buildings using federal CARES Act funds.

But the city in November announced it would not purchase the building. The city at the time said that it had become clear the cost of the building along with necessary repairs and renovations was too much.

Quinn-Davidson said the property owners — The Alaska Club — returned to the city with a better offer, saving the city $1.4 million from the original purchase price.

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So far, of the four buildings in Berkowitz’s plan, the city has only purchased the Best Western Golden Lion Inn for treatment services, with money from the sale of Municipal Light & Power.

Berkowitz’s overall plan quickly became controversial last summer, and was opposed by many residents near the properties who said they believed it would increase crime and lower property values in their neighborhoods.

Ric Davidge, president of the Midtown Community Council, said some residents support the idea of buying the former Alaska Club, while many of those same concerns linger among other residents and business owners, especially those adjacent to the property.

“You have business properties on one side, and on the back side you have residential properties,” he said. “And the residents there are very concerned.”

Bronson’s campaign for mayor arose amid opposition to the city’s building purchase plan. He gained widespread support from people who rallied against the city’s plan and organized protests, including on the now-private Facebook group Save Anchorage.

While campaigning for mayor Bronson vehemently opposed the city’s plan and has said that he would sell the Golden Lion on “day one.”

Still, he has also said that he believes the city needs one or more new congregate homeless shelters.

Quinn-Davidson during a news conference Friday said that she briefed Bronson on the city’s transition plan and potential purchase and said that the conversation was “really terrific.”

“I just said to him really directly, ‘You know, in a little over a month, you’re about to be the mayor and you’re going to make these decisions and you’re going to want to put together a plan that gets us out of the Sullivan, and it ultimately is your decision and I absolutely respect that,’ ” she said. “At the same time, I think we’re giving him the best of both worlds, he gets to make that decision but we’ve laid out a plan that works for him.”

Quinn-Davidson said she and her team plan to work collaboratively with Bronson during the transition to his administration and to offer support as the city seeks solutions to homelessness.

“Both of us see a need to solve this problem,” she said. “He’s at the beginning of a huge role where he’s rallying his team around him and looking at different options and so he made no promises to me, nor did I expect him to.”

Bronson’s campaign manager, Brice Wilbanks, provided a statement in response to the announcement.

“Dave wants to thank Acting Mayor Quinn-Davidson for her call today advising him of the intended procurement. He will consider this action as he develops his long term strategy to resolve the chronic homeless problem facing Anchorage.”

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Robin Ward, the city’s director of real estate, said that it has invested non-refundable earnest money on the contract.

“If the sale does not proceed to closing, we would lose that non-refundable earnest money, But it’s a small amount of the purchase price,” Ward said. “So, that is the sacrifice that we made to be able to extend the closing date to allow the next administration to make the final decision.”

Ward said that all real estate transactions are confidential until they are closed or terminated and declined to disclose the amount.

‘We need to move quickly’

The shelter at the old Alaska Club on Tudor would provide space for 125 to 150 people. It would need to be operational by the fall.

“We need to move quickly,” Quinn-Davidson said. “... Otherwise, where are those folks going to go? They’re either going to be on the streets, which doesn’t make neighbors happy and puts them at risk, especially as the weather turns cold.”

In 2019, the Midtown Community Council passed a resolution in support of building a day shelter in the neighborhood, as a way to get unsheltered people off the street.

“Our objective in 2019 was to get them off the streets,” Davidge said. “And the question was, ‘what do you have to do?’ Well, we have to have shelter. Okay, where in Midtown do we have adequate shelter options?”

The old Alaska Club is a viable option, he said. Still, it has some potential issues, such as traffic. They may need to find a way to keep its outdoor spaces more separate from the neighborhood.

The community council requested and was awarded $100,000 grant from the Assembly to help create a Midtown business partnership, similar to the Downtown Community Partnership.

It would provide additional security for businesses in the Midtown community, Davidge said. That may take a year or two to form, he said.

Assembly Chair Felix Rivera, a Midtown representative, said that it is in the beginning stages. It is not known exactly what area would be included in the improvement district needed to create the partnership, which would be funded through a property tax levy to be voted on by residents in the area, he said.

Davidge said he plans to visit residents in the area in the coming days and speak with them about the potential project. He is reaching out to city officials and Midtown Assembly members, too.

“Our next step will be working with them to make sure that the shelter has adequate security and competent management,” he said. “We’ve had a conversation with our Assembly members about that already. They’re firmly, completely aware of our concerns.”

Rivera said the issues are ones his district is more than familiar with.

“We knew it’s very likely that there was going to be a shelter coming to Midtown as part of this demobilization and transition. This is a debate that we had last year,” he said.

It was divisive, drawing protesters to gather outside the Assembly chambers.

The debate is again unfolding in community councils as they wrestle with a proposed change to land use codes that would allow a shelter in Midtown.

Currently, shelters can only exist in “public lands and institutions” zoning districts. The Alaska Club is in an area zoned as a “B3″ business district.

[Proposed change to Anchorage land use code becomes focus of debate over future of homeless shelters]

There is a proposal to allow conditional use permits for shelters in B3 districts. The Assembly may introduce that legislation next week, and hold a public hearing on it June 8, Rivera said.

Another ordinance the Assembly will consider paired with it would require licensing for shelters, helping the city to better regulate them and mitigate impacts on neighborhoods, he said.

Ira Slomski-Pritz, special assistant to the acting mayor, in an emailed statement said that the city’s health department director also has authority to temporarily allow emergency shelter in buildings not zoned for that purpose.

“The change to the B3 zoning being considered by Assembly is not an immediate process, but will be required in the long term for this location to work, or likely any other viable new shelter location to work,” he said.

The building is in need of multiple upgrades before it can serve as a shelter.

Those include replacing the roof, replacing a water heater, installing a sprinkler and fire suppression system, removing some internal walls, installing an ADA compliant lift to the second floor, according to Slomski-Pritz.

The current owner is making those upgrades and repairs as part of the contract, according to the acting mayor’s announcement.

According to its tax assessment information on the municipal website, the building was constructed in 1978 and is 28,088 square feet.

Rivera and Midtown representative Meg Zaletel supported the idea of the shelter in Midtown last year, Rivera said.

“We’ll continue to do our best to address each of those concerns, and really make sure that whatever is stood up, have a little impact to the community as possible,” he said.

“Now it’s finally, a year later, going to be becoming a reality,” he said.

Still, that’s contingent upon the incoming mayor.

Standing down the Sullivan shelter

The city now has 700 individuals relying on the municipality every day for shelter — 400 at the Sullivan, and 300 in non-congregate shelter such as city-contracted hotel rooms, said Robert Doehl, incident commander with the city’s Emergency Operations Center.

The city created an emergency shelter at the Sullivan Arena as the coronavirus pandemic upended Anchorage’s homeless resources. Housing people in crowded congregate shelter facilities became implausible with the need for social distancing, increased sanitation and other health precautions.

It was a double-whammy, said Doehl. At the same time, shelter capacity dropped by more than 60%, more and more people needed shelter due to the pandemic’s economic impact.

City officials, nonprofit shelter operators and service providers agree that the old way of sheltering homeless people is gone for good, and that it was insufficient to begin with.

“Over the past year, the municipality has stepped up to shelter hundreds of people and identify real shelter and housing solutions,” Quinn-Davidson said Friday. “Between public and private investments, we’re on the cusp of significantly reducing homelessness in Anchorage.”

The city is using temporary federal FEMA funds to pay for the Sullivan shelter, but the 100% reimbursement ends Sept. 30. It must find housing for the 400 people there, Doehl said.

The city plans to find housing for 75 people using a new housing-first case management contract, he said. Case managers will work with individuals to place them in eligible programs and house them in longer-term situations, including with rental assistance, he said.

The Assembly this week allocated money toward this when it passed the spending plan for its first $51 million in federal American Rescue Plan Act funds.

Doehl said the case management contract will eventually help 300 people find housing, helping them get out of emergency shelter entirely, but realistically only 75 by the end of September.

Another 75 people will be helped through existing case management in Anchorage. About 90 will be housed in community shelters if capacity increases as the pandemic subsides, in contracted hotel rooms or assisted living homes.

Keeping people sheltered at Sullivan means the city pays “an incredibly high cost” and it is not sustainable, Quinn-Davidson said.

As of early May, the city had spent more than $10.65 million for just the costs of the Sullivan shelter.

“That’s why we’ve been reaching out to the new mayor and saying, you know, this is a complex issue but miraculously over months of work we actually have a solution, and it’s in front of you and we want to help you,” she said.