Assembly approves plan to sell a city building that houses nonprofits

rshinohara@adn.comOctober 31, 2012 

— The Anchorage Assembly on Tuesday narrowly approved a plan to sell a city-owned building that houses nonprofit organizations.

The building, at 325 E. 3rd Avenue, is known as the John Thomas Building, and houses the Older Persons Action Group, Nubian Sisterhood, Mabel T. Caverly Senior Services, the NAACP and Intervention Helpline.

The vote to allow the city to sell was 6-5, with Ernie Hall, Chris Birch, Adam Trombley, Debbie Ossiander, Jennifer Johnston and Bill Starr in favor, and Harriet Drummond, Elvi Gray-Jackson, Patrick Flynn, Dick Traini, and Paul Honeman opposed.

Mayor Dan Sullivan said the city wanted to sell the property because it's not being used to directly provide essential municipal services, and in the past the Assembly has encouraged the administration to get rid of assets that don't have a direct city benefit.

Hundreds of Anchorage nonprofits would love to have the discounted rents offered to occupants of this building, but the city can't figure out a way to allocate the benefit fairly, Sullivan said.

The tenants pay 25 cents a square foot, said David Washburn, executive director of the Older Persons Action Group. That amounts to about $915 a month for his group, which occupies the entire third floor.

Market prices for space starts at about $1.25 a square foot, or five times that amount, he said.

Sullivan said the administration had included $300,000 in prospective revenues from the sale of the building in the 2013 city budget. If the Assembly rejected the sale, he said, the city would have to find a similar amount in expense cuts.

The building is worth about $1.6 million, Sullivan said, but because a federal Community Development Block Grant was used to improve the building in the early 1990s, 79 percent of the fair market value must be paid back to the grant program. Grant program money can be used for other Anchorage projects such as building affordable housing, he said.

Supporters of the tenant groups have testified at Assembly meetings in October on what good work the organizations do, and how the city ought to continue to help them.

Former OPAG executive director Ray Clements told the Assembly on Tuesday OPAG has been in the building for 40 years.

"The nonprofits that have occupied the building . . . have diligently worked for the low-income residents of Anchorage," Clements said.

Leonard Kelly, president of the group, said he hopes the city doesn't sell. "The municipality has been steward for these nonprofits for years," he said. The city could continue and raise the rents, he said.

Assemblyman Paul Honeman tried but failed to get the Assembly to take the sale off the table.

"I believe this was determined many years ago that this was the best use of the building," Honeman said.

Sullivan promised the city would offer a lot of assistance to the tenants, including exploring the prospect of their buying the building.

He said the mayor's office has $30,000 available to help tenants with such things as deposits and initial rents if they have to move under a new owner.

And he said the Older Persons Action Group and Mabel T. Caverly might be able to move into the city's Department of Health and Human Services building to be co-located with the city's senior services program. Combining their efforts might avoid duplication of services, he said.

Sullivan also promised to give the tenants six months' notice if they have to leave.

Reach Rosemary Shinohara at rshinohara@adn.com or 257-4340.

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