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Anchorage Assembly OKs controversial plan to negotiate purchase of buildings for homeless services

Update, 3:50 p.m. Wednesday: The U.S. Department of the Treasury’s Office of Inspector General believes Anchorage’s recently approved plan to purchase three buildings for homeless services with federal dollars is an ineligible use of COVID-19 relief funds. Read more.

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Original story:

The Anchorage Assembly on Tuesday approved a controversial plan to purchase four buildings for homeless services and treatment for substance use disorders.

The ordinance received an outpouring of public testimony, stretched over five nights, as well as a multihour presentation from Mayor Ethan Berkowitz’s administration and a night of debate among Assembly members.

“We have a duty to act,” Assembly Chair Felix Rivera said. “We have a moral obligation to do the best we can now.”

The ordinance, AO 2020-66, will allow the city to use $12.5 million in CARES Act funding to pursue the purchase of the former Alaska Club on East Tudor Road, Bean’s Café soup kitchen and Americas Best Value Inn & Suites. It would also allow the city to use $10 million from the sale of ML&P to fund the purchase of the Best Western Golden Lion Inn for the creation of alcohol and drug treatment center.

The Alaska Club building would become a daytime engagement center and eventually an overnight shelter for homeless residents. Bean’s Café would also become a day engagement center where the homeless could connect with services. Americas Best Value Inn & Suites would become a transitional housing complex, and the Golden Lion would become an alcohol and drug treatment center.

On a motion from Assemblyman John Weddleton, the proposal was split into two votes, one containing the purchase of Bean’s, the Golden Lion and Americas Best Value. A second vote was whether to move forward on the purchase of the former Alaska Club.

Assemblywomen Jamie Allard and Crystal Kennedy voted against both, with Weddleton joining them in opposition to acquiring the Alaska Club building. Weddleton voted in favor of moving forward on purchase of the three other properties.

Berkowitz and his staff said passage of the ordinance allows them to engage in formal negotiations and inspections of the properties. If they do decide to purchase them, they will go through a “request for proposal” process with potential operators. Any contract with an operator would be subject to Assembly approval.

The proposal received strong and vocal opposition in recent Assembly meetings. On Tuesday, several hundred people protested the plan outside of Loussac Library, which houses the Assembly chambers. The protest continued late into evening, with vehicles circling the parking lot and drivers honking their horns.

Residents who oppose the projects say they could lower property values, increase crime in their neighborhoods and erode quality of life. They have also criticized using CARES Act funding for the building purchases.

Following the vote, protesters made noise outside the library and some drivers staged their cars outside the library’s side door, prompting Assemblywoman Suzanne LaFrance to ask Municipal Attorney Kate Vogel if the protest had turned into a riot. Vogel said she was inside, so she did not know. The meeting continued on.

Protester Justin Sherman said the Assembly “just blew us off.”

“All we want is to be heard,” Sherman said.

The group of about 20 people was peaceful but remained gathered as the Assembly meeting continued inside the library, though at about 11 p.m. two police cars showed up following noise complaints and officers asked the protesters to quiet down.

After the meeting broke up, the demonstration grew larger and turned contentious, videos posted to social media showed. Protesters surrounded Berkowitz. Some protesters briefly surrounded a car carrying the mayor, shouting things like “people need to work,” “open the businesses,” “shame on you” and “resign now.”

On Wednesday, the mayor’s chief of staff said the administration expects more protesters on Wednesday night when the Assembly reconvenes and that officials have reached out to Anchorage police and others to make them aware of the growing tension.

“Our hope is that they will protest in a peaceful way and allow people to come and go from the Loussac Library before or after the meeting,” said Jason Bockenstedt.

The demonstrators opposed Berkowitz’s latest emergency order, EO-15, which closed bars and restaurants for four weeks after COVID-19 cases surged.

Early in the meeting, Assembly members Allard and Weddleton moved a motion to undo the order.

The motion spurred heated debate and a blunt speech from Berkowitz in which he chastised those who oppose limiting businesses in an attempt to quell the virus’s foothold.

“Those who stand up and stand strong, they’ll be proud of how they behaved,” Berkowitz said. “Those who are petty and vindictive will be ashamed of themselves later on.”

The motion later failed 7-4, keeping the order in place.

Complaints about use of the CARES Act funds for the building purchases will be aired Wednesday during an 11 a.m. meeting with staff from the inspector general’s office of the U.S. Treasury Department, the Berkowitz administration and some Assembly members. After receiving “several complaints” about the city’s intended use of coronavirus relief funding, federal auditors spoke with state officials to gather more information.

“We would now like to coordinate a call with Anchorage to discuss the matter in more detail,” wrote Dionne L. Smith, audit manager with the Treasury Department’s Office of Inspector General, on Monday.

During Tuesday night’s meeting, Allard, of Eagle River/Chugiak, said the Assembly should postpone a vote on the building purchases until after Wednesday’s meeting.

“They don’t come to investigate for NIMBY reasons,” Allard said. “It’s nothing to play with.”

Allard’s motion failed 9-2.

Kennedy, also of Eagle River/Chugiak, joined Allard in the vote. She said the proposal has too many loose ends for her to support.

Kameron Perez-Verdia said he was proud of the community for coming out to express opinions.

“You have been heard. We heard all of you whether we agreed with you or not,” Perez-Verdia said.

Like Perez-Verdia, Assemblywoman Austin Quinn-Davidson said she was saddened and deeply shaken by some of the comments that she heard during the long hours of public testimony, comments she described as racist. Homelessness results from many complex reasons including the high cost of living in Anchorage and systemic racism, Quinn-Davidson said.

“We’re all human, whether we’re housed or not,” said Quinn-Davidson.

Allard said she did not hear racist comments during the public testimony.

“If you didn’t hear racism in this testimony, you weren’t listening,” Assembly Chair Rivera said.

Chris Constant, who represents Fairview, said Tuesday night’s vote may cost some Assembly members their seats but he thanked them for taking the risk. The building purchases will transform a homeless-response system that has allowed people to die on the streets and in packed shelters on East Third Avenue.

He characterized the way the city has segregated its homeless population as morally bankrupt.

“We sent them there so they could literally die in the street,” Constant said.

Anchorage’s shelter system was upended by the coronavirus pandemic, forcing the city to open two sports arenas to provide adequate spacing between cots and mats. The Berkowitz administration wants to close Sullivan Arena as a mass shelter and move many of the city’s homeless residents into transitional and permanent housing units.

Assemblywoman Meg Zalatel acknowledged that her yes vote on the ordinance may ultimately cost her politically.

“This might be the hill I die on,” Zalatel said.

But solving Anchorage’s homelessness crisis is her life’s work and providing an adequate safety net for the city’s most vulnerable people is a public health and safety responsibility that government should bear, Zalatel said.

The Midtown assemblywoman said she understands neighborhood concerns but that “those fears can be mitigated.”

CARES Act funds

A public hearing and action on approval of a plan to spend federal COVID-19 relief funds, scheduled for later in Tuesday’s meeting, was delayed due to extended deliberation on the building purchases.

The plan to spend the $156.7 million in federal funds allocated to the municipality by the state has come under fire as the controversy surrounding the building purchases brought more scrutiny to the use of CARES Act funds.

The Assembly took about an hour of testimony from 13 people on the use of CARES Act funds. Some were nonprofits included in the proposed spending plan, advocating for their need for funds.

Others were bar owners, lobbying the Assembly to carve out a larger chunk of money for the hospitality industry. The industry as a whole has asked the city to appropriate more money for bar and restaurant owners and their workers after Berkowitz ordered them to cease all in-building service.

“With the two shutdowns, the restaurant and bar business has been devastated,” said Nicki Hale, co-owner of Van’s Dive Bar. “These small businesses really need support.”

The public hearing timed out at midnight and will resume at 5 p.m. Wednesday.

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