The Anchorage mayor’s decision to cancel a deal to buy a former Alaska Club building is a costly one. The city will lose $440,000, mostly as a result of canceling the real estate transaction after the city initiated it.
Former Acting Mayor Austin Quinn-Davidson entered into a contract to purchase a former gym on Tudor Road for over $5 million. As part of the negotiation, which was approved by the Anchorage Assembly, the administration paid $50,000 in earnest money.
The building was part of a plan initiated under Mayor Ethan Berkowitz that would have built small shelters to address Anchorage’s homelessness crisis at a number of sites within the city.
The city could have closed the purchase in May, but it instead paid another $390,000 to extend the closing date until July, after Dave Bronson took office as mayor.
Details of those costs were released in the purchase-sale agreements, provided by the Bronson administration.
Friday was the deadline for the Bronson administration to close the purchase on the building, which could have housed up to 150 people. The Bronson team decided against the deal and is instead pushing to build a larger shelter and navigation center that could house 450 people in East Anchorage.
In an email, Quinn-Davidson wrote that the city had chosen to postpone the closing of the Alaska Club deal so Bronson’s administration could make any big purchase decisions. She called Bronson’s decision not to purchase the building “unfortunate.”
“I thought (and still do) it was the incoming mayor’s role to make that decision since he would be responsible for a larger homelessness plan moving forward,” she wrote.
Matt Shuckerow, spokesperson for Bronson, said that while the loss of the taxpayer money was regrettable, the administration was looking at the bigger picture of how to address homelessness in the city.
“The administration was fully aware of the fee … the municipality would incur for not moving forward in this,” he said. “This was ultimately part of the decision-making. However, the proposal at this time does not fit in line with what the mayor is working toward on addressing this very complex and complicated issue.”
Alaska Club CEO Robert Brewster said in a phone interview that the company would deduct the payments from any future price, if the administration decides to buy the building in the future, and if the Alaska Club doesn’t find another buyer before then.
“Our mindset at this point would be that if the city eventually — within obviously a reasonable period of time — decided that they want to purchase the building, that we would apply that to the purchase price,” he said.
The Bronson administration is requesting $15 million from the Assembly to build a shelter on the corner of Tudor and Elmore roads. The shelter could be finished by mid-November, a month later than previously anticipated.
Public comment is scheduled on the proposal for Tuesday, July 27.