Assembly directs $11.8 million in federal aid toward eventual purchase of hotel in Anchorage for low-income housing
The Anchorage Assembly finalized how the city will spend $51 million in federal relief funds, donating the bulk, nearly $11.9 million, to the Rasmuson Foundation to purchase homes in low income and with support services. He identified the Aptel Studio Hotel in northeast Anchorage as the likely building.
The project is among more than 65 that the Assembly has approved federal funding for this week, prioritizing efforts to support housing, children and families, economic development and workforce development. The federal funds came via the American Rescue Plan Act, a $1.9 trillion relief bill intended to help mitigate the impacts of the COVID-19 pandemic.
The city’s spending plan, finalized on Tuesday, comes as the city faces a homelessness crisis. An estimated 350 people are homeless in Anchorage, and shelter and housing programs are largely full. The low barrier walk-in shelter no longer exists — the only option is to camp outdoors at Centennial Park Campground, where Mayor Dave Bronson’s administration directed and transported homeless people as it closed the city’s mass shelter at Sullivan Arena in June .
In a last-minute change, the Assembly directed hotel money to Rasmuson instead of the Alaska Community Foundation, as previously planned. The move completely excludes the city — and Bronson’s administration — from the deal. The community foundation would have needed signers to release the money for the purchase, and that would have required the administration’s signature.
The majority of the electoral bloc of Assembly members say Bronson’s actions have created a humanitarian crisis in Centennial and that they have little or no confidence in the administration’s competence.
“I would prefer that funding go to the health department and the administration,” Assemblyman Kameron Perez-Verdia said. “But we clearly see that their lack of planning and lack of ability to move these projects forward forces us to go directly to community partners and people who we know will make this happen.”
[More coverage of Anchorage homelessness]
Bronson objected to the expense and donated money to the Rasmuson Foundation to purchase the hotel. The mayor vetoed the change at Tuesday’s Assembly meeting, and the Assembly immediately voted to override his veto.
“We’re supposed to allocate nearly $12 million of taxpayer dollars to the Rasmuson Foundation – which has always been a great partner in all things Anchorage – but the question I have, one of the questions I “I have among many is that normally it goes the other way. The Rasmuson Foundation gives us money,” Bronson said.
Bronson said he would rather spend the money on fuel costs for police, fire, transit and other city vehicles. Several city departments have already exceeded fuel budgets for the year due to record high gasoline and diesel prices.
The Assembly rejected a separate proposal from Bronson to cut or cut funds entirely for several projects and instead spend $3.2 million on fuel budgets and $2.5 million on repairs to the Sullivan Arena, which was damaged during the over two years it operated as a mass shelter for the homeless.
Assembly members said the city has other sources of money it can use to pay for fuel and repairs to the arena.
The Assembly also removed language referring to the Aptel Hotel, making funds given to Rasmuson available for building low-income housing elsewhere if needed.
It was about Bronson and those Assemblymen allied with him. They also spoke out against the spending, citing concerns that the deal could fall through and that no entity had yet been identified to own and operate the housing project.
“There are too many unknowns here. Can’t we nail them? This is a business transaction. I need to see a business plan,” Bronson said. “Who is going to operate this thing in 10 years? I mean, is it going to fall on the taxpayer?
Michele Brown, senior fellow at the Rasmuson Foundation, said the operations would largely be covered by rent paid by residents, which will include housing vouchers and other assistance. They will also seek federal funds from HUD through the city, as well as grants and donations to cover costs.
Several Assembly members mocked Bronson’s criticism and pointed to a $15 million request he made last summer to build a 450-bed homeless shelter and navigation center in East Anchorage, designed with a peak capacity of up to 900 people. The Assembly quickly rejected the idea at the time.
“The mayor came up with this without an operating plan or a planned operator, just as he now accuses the Assembly,” said member Forrest Dunbar. “…We also know that the mayor set an arbitrary date of June 30 to close Sullivan Arena and created a humanitarian crisis that is currently unfolding in Centennial Park.”
The city is currently moving forward with a plan to build a much smaller shelter and navigation center in East Anchorage, but the administration said it won’t be completed until late January at the earliest. . It has not yet identified an operator, nor exactly how the operations will be financed, nor exactly what services will be rendered there. The Assembly has so far approved $9 million for the project, which will continue to need more funding.
“Some of us are still waiting for a plan for the navigation center,” Assembly Deputy Speaker Chris Constant said.
Bronson and Assembly members allied with him also said they were concerned that such a large amount of money would go directly to Rasmuson, a private entity. Assembly members fired back saying they were suspicious of the city with the funds.
Rasmuson has been deeply involved in the design and implementation of the city’s homelessness plans. She and other private organizations have donated millions to the city’s homelessness efforts.
Bitter clashes between the Assembly and the administration over Bronson’s initial East Anchorage shelter proposal led them to enter negotiations with animators to develop plans for the homeless. Agreed plans were formed as the city sought to shut down its COVID-19-era mass care operations for the homeless, including Sullivan Arena. However, this nearly year-long negotiation collapsed in June.
The Assembly had already earmarked $3.4 million of federal relief money to secure the purchase of the GuestHouse Inn, which is being used by the city as a transitional housing complex. The property is expected to be converted into 130 permanent working and supportive living units after the sale to First Presbyterian closes this month.
The purchase of GuestHouse was part of the negotiated plan. Members of the Assembly and others involved in the negotiations say the Anchorage administration and health department bungled the planned funding process for this purchase. (The mayor’s office said Friday that it was unable to immediately answer questions about GuestHouse’s funding. It did not respond to previous questions about it.) This put the sale at risk, as well as the 132 people living there who are at risk of losing their shelter.
The Assembly spent the ARPA money to make sure the purchase went ahead.
The GuestHouse and Aptel Studio Hotel are part of a wider Assembly strategy to help tackle a homelessness crisis ahead of winter.
The city and the Rasmuson Foundation worked together to purchase the Sockeye Inn earlier this year. Its purchase was planned during the negotiation process, and today it is a shelter for medically fragile homeless people, managed by Catholic Social Services.
In addition to the hundreds of people living homeless in Anchorage, another 200 homeless residents are staying at the Aviator Hotel. This operation ends on September 30.
“That’s 200 other people who will be put on the street. So we need additional housing space,” Dunbar said.
To choose how to distribute federal relief funds, Assembly members considered more than 130 requests for portions of the money from nonprofits, businesses and organizations across the city, totaling 262 million dollars in funding applications.
Here are some of the other most important elements that received federal funding:
• $8.165 million for Thread, a child care referral and resource network. The organization will distribute money to licensed child care programs to stabilize businesses, hire educators and provide affordable child care.
• $4.5 million in grants to the Cook Inlet Housing Authority to develop 64 affordable housing units.
• $2.375 million to Covenant House Alaska for Covey Academy, its job training and workforce housing project, which provides training and job placement to disadvantaged populations, including homeless youth.
• $1.9 million split between Volunteers of America, Alaska Behavioral Health and Christian Health Associates to expand mental health services in schools
• $1.6 million to Girdwood Inc. for the construction of a new daycare and learning centre.
• $1.2 million to the Alaska Black Caucus to renovate its building and create an equity center as a service center for the BIPOC community.
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