Purchase finalized to make downtown Anchorage hotel into low-income and supportive housing for formerly homeless

More than 130 people who have been experiencing homelessness in Anchorage now have permanent housing after a deal closed last week to permanently transform a former hotel downtown into a low-income workforce and supportive housing complex. The city began using the building as an emergency homeless shelter and quarantine site early in the pandemic, and for the last few months it has been a transitional housing facility for homeless residents.

The long-awaited sale of the former GuestHouse Inn to a local nonprofit was finalized Sept. 12. Its residents are now in the midst of a shift as the property transitions into a privately-owned and operated housing program, after two years of being operated by the city.

A majority of people who have been living in the former transitional shelter as homeless clients will now be renters, leasing their rooms with the support of rental assistance and housing vouchers. Remaining vacancies are being filled by others experiencing homelessness who are moving in after staying elsewhere.

The GuestHouse purchase is the second major piece of a multi-part plan to address homelessness in Anchorage that has come to fruition, which Mayor Dave Bronson’s administration and the Assembly agreed to almost one year ago.

That plan was conceptualized last year during a lengthy negotiation that arose from a series of acrimonious disagreements between the city’s elected leaders on a long-term strategy to alleviate homelessness and to stand down COVID-19 era emergency shelter sites.

Negotiations fell apart in June, but several pieces of the plan are still in motion. The recent conversion of the former Sockeye Inn into a complex care homeless shelter was the first finished. The city is also building a shelter and navigation center in East Anchorage, another aspect of the plan, though funding for continued construction is currently tenuous.

The GuestHouse purchase has been funded with both private and public dollars, largely via the Rasmuson Foundation and city, which were passed through a separate nonprofit entity, First Presbyterian Anchorage LLC, which now owns the property. Rev. Matt Schultz, pastor at Anchorage First Presbyterian Church, said its affiliated nonprofit operates separately from the church, which does not receive any funds from the project, and that there is no religious requirement at the housing complex, nor are any residents questioned about religious beliefs.

It will be operated by the same groups that are currently running the city’s last COVID-era shelter in the Aviator Hotel, said Bob Doehl, a senior fellow at the Rasmuson Foundation. The managing partners of the Aviator’s ownership group, former Sen. Mark Begich and former Alaska revenue commissioner Sheldon Fisher, will oversee the hotel property with their group MASH LLC. Henning, Inc., a homeless service nonprofit managing the Aviator shelter, will provide support for the residents living at the GuestHouse.

Rasmuson was a key partner in ensuring the project moved forward, Schultz said.

The finalization of the project puts to rest fears shared by Assembly members and homeless service providers that the people staying there would lose their shelter if some part of the complex deal fell through. Their doubts intensified over the summer, as the sale closing date drew nearer and as problems delayed the promised $3.4 million in funding from the city for the $7.8 million purchase, nearly quashing the project.

“I chalked it up to it being a very, very complicated deal with so much funding coming from various sources, and each one of those sources has their own very complicated process. And a lot of times that involves what I consider to be very understandable hesitation to put their money on the table, if others haven’t also done so,” said Schultz. “It took a lot of faithfulness from all parties to be able to say, ‘Yes, we’ll go ahead and get the ball rolling here,’ and then others to join in. There was a time, for sure, when the municipality was the last one to ante up to the table, so to speak. But fortunately, it worked out.”

[No place to go: Anchorage’s homeless shelter capacity has been pushed to the brink]

Schultz said the conversion of the GuestHouse into housing accomplishes goals shared “across the political divide” between the Assembly’s moderate-to-liberal majority and the conservative Bronson administration: It gets a large group of people directly out of homelessness and costs far less than providing emergency shelter for the same number of people, saving taxpayer dollars, he said.

Those who are experiencing homelessness “are our beloved brothers and sisters and they deserve the dignity of a home,” Schultz said. “Not just overnight shelter, not just a tent, but an actual home that they are safe and warm and dry and healthy. That they can take pride in. Simply by being human beings, they deserve all of that.”

Though Bronson officials and Assembly members had agreed to move ahead with the project, the Anchorage Health Department did not pursue, on the timeline other city officials had expected, a lengthy process to acquire the expected federal Housing and Urban Development grant funds for the hotel purchase. That left the city without the funds it needed to meet the August closing deadline, putting the sale at risk.

The Assembly then voted in late July to instead spend some of its federal American Rescue Plan Act funds on the project, directing $3.4 million as a grant to First Presbyterian Anchorage in order to secure the purchase of the GuestHouse. The Bronson administration released the money just in time for the scheduled closing date at the end of August.

After clearing several other financial, insurance and real estate law hurdles over the last few weeks, the deal has finally been cinched, Schultz said.

With 130 units, some of which will be shared in roommate agreements, the housing project offers a chance for dozens of single adults who are “workforce ready,” or already working while homeless, to develop a steady rental history and stabilize in a safe place, Schultz said.

“It is so hard to get a place to rent even if you are currently housed and fully employed,” Schultz said. “You need to show rental history and have money to pay for first and last and deposit, and who could do that when you’re homeless? It’s impossible.”

The Assembly, in August, directed about $11.9 million more in federal relief to Rasmuson to pursue similar projects, and the philanthropic organization is currently looking at other hotels for possible purchase and conversion into low-income housing with those funds.