What happened to the money behind AO 2020-66?

ANCHORAGE, Alaska (KTUU) - With the announcement that Bean’s Cafe’s 3rd Ave. plot will be purchased by a real estate agency for use as a homeless services hub, three of the four buildings listed in the controversial Assembly Ordinance 2020-66, will now not be purchased by the Municipality of Anchorage.

“Two [buildings] we kind of went through the due diligence process on and, really just identified, there were a number of issues that, you know, as we went through that process just didn’t make them wise investments,” said Jason Bockenstedt, Chief of Staff for the mayor, referring to the old Alaska Club location near Old Seward and Tudor, and America’s Best Value Inn in Spenard.

The fourth building, the Golden Lion Inn, was purchased by the city using proceeds from the sale of Municipal Light and Power. The original proposal, though, would have seen the other three buildings purchased with funds from Anchorage’s CARES Act allocations. That became a point of contention among critics of the plan, who argued it was an inappropriate use of the funds. Complaints about the use of CARES funds eventually reached the Department of Treasury Office of the Inspector General, who requested a meeting with municipal officials. During that meeting, the office expressed skepticism that the plan would be a valid use, but said the city would need a final ruling from the Treasury Department in a later meeting.

According to municipal officials, that meeting with the Treasury had a different outcome than the one with the Inspector General.

“They did confirm it was an eligible expense,” Bockenstedt said. “But one of the key components was that you had to have not only purchased the building, but you also had to have all the renovations and people using that building by, at that time, December 30 of last year.”

Unsure if they could meet that deadline, Bockenstedt said the municipality followed a suggestion from the Department of Treasury to use CARES Act funds for first responder payroll, which in turn unlocked general funds that could be used without a time limit. Those unlocked funds went towards relief programs, as well as the building purchases.

But now with the three buildings either turned down or purchased by another party, the funds remain unspent.

“It is still sitting in the Real Estate Department’s budget,” Bockenstedt said. “It has not been spent and has not been touched, we only had authorization for those specific three buildings.”

Bockenstedt said the desire to find buildings to fill similar roles still exists among the current administration, and the search is ongoing, but with a new mayoral administration coming in July, the search, or a new use for the funds, could ultimately fall on the winner of the April election.