Anchorage Assembly approves $3.7 million winter shelter contract with Henning

Anchorage is moving forward with a $3.7 million contract with local nonprofit Henning Inc. to open 200 emergency winter homeless shelter beds at three locations, starting Thursday.

The shelters are non-congregate, using single rooms, and will be located in the Alex Hotel in Spenard, the Merrill Field Inn in Mountain View and the Henry House in downtown.

In total, the city is planning to open 400 shelter beds, in addition to its current mass shelter on East 56th Avenue.

Assembly members approved the contract with Henning on Tuesday night in an 8-2 vote. Its passage comes despite trepidation expressed by several Assembly members about problems with Henning’s management of city shelters in the recent past.

Mayor Suzanne LaFrance’s administration had initially proposed a $9.2 million contract with the organization to handle all 400 beds. The administration halved the proposal after members also voiced concern about Henning becoming the only organization running the city’s emergency winter shelters.

LaFrance at Tuesday’s meeting said that, in response to “Assembly and community feedback about having a single provider, we are in a confidential negotiation process with a second vendor.”

She did not say which organization or where it may operate a shelter. However, she added, “we have no plans to stand up a large shelter in the center of downtown.”

Only two organizations, including Henning, put in bids for the shelter contract, city officials said.

“There really are not, at this point, other options to go forward,” Municipal Manager Becky Windt Pearson said.

Earlier this month, the city switched operators of its 200-bed mass shelter on East 56th Avenue and Catholic Social Services took over its management from Henning.

Some Assembly members had opposed contracting for any shelter services with Henning after the nonprofit came under public scrutiny in May, when screenshots of text messages between then-city homeless coordinator Alexis Johnson and Henning staff were leaked to the Anchorage Assembly.

The messages appeared to show unprofessional and unethical conduct by the organization’s leadership and Johnson, who oversaw the city’s homelessness initiatives and contracts. Johnson and Henning’s leaders have said the messages were taken out of context and have denied doing anything unethical or illegal, or anything to violate its city contracts.

Johnson left the Health Department in July and is now Henning’s director of strategy.

A report from the Anchorage Health Department, completed in the final days of the Bronson administration, largely found Henning employees had done nothing wrong.

Then the LaFrance administration, in an August memo, said that the department’s investigation was flawed and inadequate but that it won’t pursue a new investigation, in part because Henning’s contract at the 56th Avenue shelter was coming to an end.

Assembly Chair Chris Constant, who voted against the contract, expressed frustration and said the city is “facing the consequence” of the administration’s decision not to investigate further.

“Now we have a decision that is, ‘If you don’t do this, you’re responsible for people being homeless,’” Constant said. “It’s a very difficult place to be in.”

The Assembly’s approval of Henning’s contract also comes despite a recent opinion from the city ombudsman that said Henning’s employment of Johnson within one year of her departure from the Health Department may be a violation of the city ethics code. However, both the municipal attorney and the city’s Ethics Board reviewed the issue and have said that Johnson’s employment by Henning is not a violation.

Member Daniel Volland, who voted against the contract on Tuesday, said he found the ombudsman’s memo compelling, and read aloud a paragraph from it.

The ombudsman’s office received “almost weekly complaints from residents of the shelter,” he said.

Other members, including Karen Bronga, urged the city to approve Henning’s contract and move forward.

“Do they do everything perfect? No. But I tell you, I think they do a lot of things right,” Bronga said.

Vice Chair Meg Zaletel and member Scott Myers did not participate in the vote.

On Tuesday, the Assembly also approved a $60,000 contract with Restorative Reentry Services, or RRS, for third-party oversight of all city winter shelters. The same organization supervised during the last two winter seasons.

Several members said the oversight contract gave them enough confidence to “begrudgingly” vote to approve Henning’s contract.

“I fully expect RRS and the administration to do their job when it comes to oversight of Henning, and we should not be afraid to pull the plug,” member Felix Rivera said.

On Tuesday, the Anchorage Assembly also unanimously approved the sale of the city’s $2.39 million prefabricated, tensioned-fabric Sprung Structure to the Don Young Port of Alaska. The money is funding shelter operations and services.

The municipality previously bought and planned to use the facility for a large homeless shelter in East Anchorage under a 2021 proposal from former Mayor Dave Bronson. The Assembly later stopped the project after Bronson officials violated city contracting rules by pushing forward with construction without Assembly approval, and as concerns grew over the project’s rising costs.

The shelter project was infeasible without a source of funding and would cost “easily $17 million” just to finish constructing it, Assembly member Anna Brawley said Tuesday.

The port is in the midst of an estimated $2 billion modernization project, and the structure will serve as warm storage for equipment and road sand, and house port maintenance offices.