Anchorage pushes forward on delayed drug and alcohol treatment center project at former Golden Lion Hotel

Anchorage city officials are pursuing a project to stand up a drug and alcohol treatment center at the former Golden Lion Hotel under an agreement that requires to the municipality to have it running by fall of next year — or the city loses millions of dollars.

“We have through approximately the middle of October of 2025 to turn the lights on, open the door and welcome a client into the treatment center,” Assembly Chair Christopher Constant said during a meeting on the issue Friday. “And so while that is a little bit of time, it’s not a lot of time,”

In 2020, the city sold its former electric utility, Municipal Light & Power, to the Chugach Electric Association. The roughly $1 billion deal stipulated that Anchorage had to use $15 million of the proceeds to open a substance use disorder center called the Alaska Center for Treatment within five years of the sale closing, or Chugach Electric gets the money.

The Assembly in 2020 approved the purchase of the former Midtown Golden Lion Hotel using the ML&P funds. The city has spent about $10 million of the required amount so far, according to Chief Fiscal Officer Alden Thern.

It still has to invest about $5 million more in the project, and whatever it doesn’t spend goes to Chugach Electric.

If the city doesn’t meet the deadline, it could lose up to the full $15 million to Chugach Electric, Thern said.

Delayed for years

The building has been a flashpoint in city politics over the last several years. The city bought it as part of a larger, controversial plan from former Mayor Ethan Berkowitz to purchase four buildings for homeless services and for the required treatment center.

Mayor Dave Bronson’s 2021 campaign, in large part, hinged on opposition to Berkowitz’s plan, and he vowed to sell the building if elected. When Bronson took office, he scrapped Berkowitz’s plans.

Save for a brief stint as a questionable COVID-19 clinic, the Golden Lion sat largely dormant for three years.

Then Bronson reversed course and agreed to use it for housing, facing a homelessness crisis and mounting pressure from the Assembly, including from Mayor-elect Suzanne LaFrance, who at the time was the Assembly’s chair.

More than 86 people currently reside at the former hotel, near the busy intersection of the Seward Highway and 36th Avenue.

LaFrance, who won the runoff election against Bronson last month, takes office on July 1.

The clock is ticking on the treatment center.

Thern told Assembly members on Friday that he’s hopeful but concerned about the timeline. The building needs serious renovations, including asbestos remediation.

“If we plan this right and get it all taken care of in the right format, I think we’ll be in good shape,” Thern said.

But the city also needs to find an organization to operate the treatment center, he said. When the city last solicited bids in 2021 to run it, no organization stepped forward, Anchorage Health Department officials said.

“I just hope that we actually have a provider and have an option, and it’ll all work out great. But if we’re stuck in a situation where we don’t, we could have some significant financial ramifications because of that,” Thern said.

Tamiah Liebersbach, administrative manager at the Health Department, told Assembly members that during the April 2021 bid process, potential operators had concerns about uncertainty over Medicaid waivers and reimbursement rates. And the mayoral election was underway, adding worries that “the Golden Lion may not be a facility the municipality owned going forward,” she said.

All of that uncertainty has since changed.

“We were in a really different landscape than we are today,” Liebersbach said.

The Health Department is preparing to open a solicitation for information from potential bidders next month, to get feedback on Anchorage’s unmet needs and how the city treatment center can fill in gaps with services already available, she said.

The city’s lease of the building to local homeless and housing nonprofit Henning Inc. is up at the end of June. Henning is master-leasing the converted hotel rooms to the residents.

Health Department Director Kim Rash said the city will set up a month-to-month lease with Henning and work together to move the Golden Lion residents into other housing so renovations can begin.

When that work will start isn’t yet clear. The city will need an operator in order to know exactly what’s needed to convert the space, she said.

Treatment possibilities

Another issue is that it’s not exactly clear what level of treatment services the ML&P sale agreement requires the city to open, Thern said.

The language in the agreement is vague, saying that the Alaska Center for Treatment should be a “substance use disorder center that will serve the communities of Southcentral Alaska by offering some combination of outpatient and inpatient treatment options, transitional housing services, and crisis stabilization.”

“What I don’t want is them to say, ‘It’s a piece of all of these,’ and we only do two out of the three, and then we’ve spent all this money and we haven’t done it. Or does it just allow us to do one of them and do 100% of that?” Thern said.

Thern said his interpretation is the city can offer any type it wants, as long as the services fall into some of the categories. The city will seek legal guidance, he said, also noting that former Municipal Attorney Becky Windt Pearson, who was instrumental in the ML&P sale, is returning in a new role with the LaFrance administration as municipal manager.

Constant said that although the city committed to a series of requirements in the agreement, it doesn’t have to deliver them all if they already exist.

“We can partner with those providers to meet that need. And so that can that make this facility be more focused on critical needs in the community that aren’t currently being met,” he said.

Constant, whose day job is with a local treatment provider, said there are multiple levels to drug and alcohol treatment, with the most intensive inpatient care similar to hospitalization. It’s unlikely the facility would provide medical care, he said.

Often, residential treatment can be destabilizing because they’re in a temporary living situation and technically unhoused, Constant said.

One model for treatment has permanent and transitional housing, including for families and residents going to outpatient treatment nearby, he said. Some offer child development, youth services, case management or vocational services.

The Golden Lion could become something like that, with leased supportive housing, where residents could get outpatient treatment operating out of the same building, Constant and Liebersbach said.

It’s possible that families of the person in treatment could be able to live there, also receiving support, Rash said.

Assembly leaders have been discussing the project with LaFrance’s transition group and hope to meet with Providence Alaska as well, Constant said.

“None of it’s happening in a vacuum. All of it is starting to percolate,” he said.