Assembly to vote on whether to finish building embattled East Anchorage shelter project

The Anchorage Assembly is scheduled to decide Tuesday whether or not an embattled city project to build a 150-bed homeless shelter and navigation center in East Anchorage will move forward.

The Assembly abruptly halted its construction last month, after the revelation that Mayor Dave Bronson’s administration had pushed ahead with construction work during August and September, without first getting the Assembly’s approval on a $4.9 million increase to the construction management firm’s contract, as required by city code.

Bronson officials brought their request to the Assembly after the fact, during an early September meeting that was weeks after the administration green-lit construction. Assembly members came close to voting down the project entirely. Instead, they postponed consideration of the administration’s contract upgrade request to Oct. 25.

Now, as they prepare to vote, Assembly members are weighing myriad concerns and serious doubts they have expressed about the project, and are pressing the administration for detailed plans on funding and operations. Other members who have recently voiced support for the project have flagged questions about logistical hurdles, such as needing funding sources for operations, and paying competitive wages in order to find sufficient staff.

Assembly leaders and others are also pushing for answers on the construction work that happened without their approval, a mistake several view as a serious affront to the balance of power between the legislative branch and the mayor’s administration.

“The separation of powers issue is that the administration has effectively created a process by which a massive contract can be offered, contract work can be done — to the tune of $5 million — and then have to come back to the Assembly and ask forgiveness the old Alaska way: Don’t ask permission, ask for forgiveness,” Assembly Vice Chair Chris Constant said during a meeting with Bronson officials last week.

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“I’m not sure how we systematically approach this, because if this is the new paradigm, where we are going to be put on the hook because there’s a massive outlay of cash and labor by a contractor to the municipality — that we didn’t provide — how do we protect our branch of governments authority to authorize expenditures? ‘It doesn’t mean anything anymore’ is the question that just kind of keeps chewing in the back of my head,” he said.

‘Not the norm’

Lance Wilber, the city’s director of the Office of Economic and Community Development, conceded the error during a meeting earlier this month. The contractor, Roger Hickel Contracting, and its subcontractors have put in “a little more than $3 million” into work already done at the site, according Wilber.

Bronson officials are urging the members to advance the project, citing increased costs if the project is further delayed, the need for more shelter space in the city — and that the city will likely face a lawsuit from Roger Hickel if the Assembly does not approve the contract amendment on Tuesday night.

“So then the Assembly is backed up against the wall and told, ‘You’re gonna get sued if you don’t fund this,’” Constant said. “And there’s a moral argument that they did the work for the municipality; we should pay. But there’s also a moral argument that says if we pay this, this is forever going to be the new deal. This is going to be how business is done in this municipality.”

In response, Municipal Manager Amy Demboski told members that Constant’s fears would not materialize.

“I can just assure you, Mr. Constant, this is not the norm. This is not how I envision our construction contracts to be managed,” she said. “And I can just tell you here today, I have had plenty of conversations internally with staff, and we have been developing processes to make sure this doesn’t happen again. Because our goal is to communicate clearly and make sure that you feel well informed and that at any time, you can say, ‘Okay, where are you now with the project?’ And we can tell you that. That’s our goal.”

City attorney Blair Christensen said she believes the mistake occurred when new city staff moved forward without contacting the legal department and made a mistake interpreting language in an Assembly funding document for the project.

She also said it was reasonable for the contractor to move ahead given the information they had and at the direction of administration officials.

Questions on costs

There is largely broad agreement among city officials that Anchorage needs more low-barrier shelter space and homeless services, but since Bronson took office last year, there has been marked and often acrimonious disagreement over how best to make that happen. For the past few months, Anchorage has lacked any walk-in, low-barrier shelter, and many homeless residents had no choice but to camp outside. That changed when the city reopened Sullivan Arena as an emergency cold weather homeless shelter at the end of September. But that is a temporary measure, and both Bronson and Assembly members are seeking long-term solutions.

Bronson spearheaded the East Anchorage project, and it has had a contentious history.

Bronson first proposed a 450-to 1,000-bed version of it soon after his election. Assembly members shot that idea down over its massive size, ballooning costs, a rushed timeline and lack of plans for funding and operations. That triggered a negotiation process on the city’s homelessness plans between the Assembly and administration, and city officials agreed to a plan to bring multiple homeless services online, including a navigation center and low-barrier shelter.

“The reason why the navigation center has not been built yet is because the Assembly has not yet received a plan, a thorough plan from the administration, to see the project through to completion,” Assembly Chair Suzanne LaFrance said Friday. “As of today, we are still waiting to see a comprehensive project budget that includes design and construction costs, FFE, permits and contingencies. We’re still waiting for a detailed operation plan and budget. We’ve yet to see a total project cost estimate that we can be confident in.”

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The Assembly has set aside a total of $9 million for the project. Wilber has said that the city will need to find about another $6 million to fully finish it, with furnishings.

“The cost estimates have ranged from $10 (million) to $22 million, but none have come with details from a professional cost estimator that factor in the entirety of the project. We’ve been asked to greenlight a major capital project without knowing what the total costs will be. And every time we do hear from the administration, we’re given a different number,” LaFrance said.

The navigation center and shelter would cost about $5.99 million per year to operate with an array of services targeted toward moving clients into housing, and treatment services when needed, according to a presentation to the Assembly last week from homeless coordinator Alexis Johnson.

“We envision this is a working document and we are obviously still in the preliminary stages of an operations plan but this will give us a base model for operations costs yearly,” Johnson said.

Tied to the Golden Lion

The East Anchorage shelter project is also tied to another proposal to turn the city-owned former Golden Lion Hotel into a substance abuse treatment center. Members made funding for the shelter project contingent on a firm written commitment from Bronson to pursue the idea.

Bronson vocally opposed the city’s purchase of the Midtown building, and has opposed its use as a substance abuse treatment facility. His criticisms were a rallying cry for supporters and prominent funders of his campaign for mayor.

Assembly members have said they don’t believe Bronson has met the requirement stipulated in the funding.

His administration argues that he did meet that requirement when he stated in June press release that he would continue to consider all options for treatment facilities, including the Golden Lion.

Assembly member Felix Rivera last week called on Bronson to renew his commitment in writing. The Assembly has also pushed for the city to open the building for housing homeless residents in the meantime, while it pursues potentially using it for treatment.

“It is still possible to gain Assembly support for this project, at least my support. I can’t speak for anyone else. But there is work that needs to be done and the case needs to be made for why this project should continue,” LaFrance said.