The Municipality of Anchorage on Wednesday said that it will not purchase the Americas Best Value Inn & Suites as previously planned due to the “significant costly repairs and mandatory upgrades” that would be necessary.
The city had planned to purchase the Spenard hotel building to serve as a shelter and resource center for people experiencing homelessness. But during its “due diligence process,” the municipality found that the building would need “extensive upgrades” to elevators, stairwells, plumbing and electrical systems, and repairs to the exterior siding and roof, the city said in its announcement.
“The Municipality remains committed to our promise to Anchorage residents to conduct a thorough due diligence process, and only proceed with acquisitions that make sense,” Acting Mayor Austin Quinn-Davidson said in a statement. “The need for additional shelter and housing infrastructure is inescapable, and we will address that need with prudence.”
The planned purchase of the inn was part of a controversial multimillion-dollar real estate deal the Assembly has pursued as part of an effort to address homelessness in Anchorage, an issue that has been exacerbated by the coronavirus pandemic. The city pursued the purchase of four properties as part of the effort, including three that would have been acquired with CARES Act funds.
Earlier this month, the municipality finalized its purchase of the Best Western Golden Lion Hotel in Midtown, which will be a drug and alcohol treatment center. It used $15 million in proceeds from the sale of the city’s electric utility to make the purchase.
The Assembly also authorized using $12.5 million in CARES Act funds to purchase three other buildings, which include Americas Best Value Inn & Suites, Bean’s Cafe soup kitchen and another location the city has not yet picked.
Many who opposed the city’s plan to buy the properties have said that using the federal CARES Act money was illegal. Other opponents worry that the treatment center and shelters will increase crime and lower property values in their neighborhoods.
The municipality said it will continue to search for properties that will help create more shelter space, supportive housing and support services outside the downtown area.
To help address the greater housing needs caused by the pandemic, the municipality converted Sullivan Arena into a mass shelter, which costs about $1 million a month to operate, according to the city. That money is temporarily being reimbursed by the Federal Emergency Management Agency, the city said, but it is not a permanent solution.
“Providing more housing options will return the Sullivan Arena to general community use, save the Municipality money, and help reduce homelessness in Anchorage, ensuring residents aren’t left out in the cold,” the city said Wednesday.