Homeless individuals from across Alaska have slept in the Sullivan Arena since March 16, 2020. It’s the longest-running Covid emergency order homeless magnet shelter in the nation.
Now, it looks like Anchorage taxpayers will be on the hook for at least $56.5 million in expenses related to the Covid sheltering project — expenses that the Federal Emergency Management Agency will probably not reimburse, according to multiple municipal sources.
The facility, once the go-to venue for concerts and hockey games, has become the place for people being banished from their villages in Alaska and for others who have made a lifestyle out of living on the streets, especially after Covid-19 pandemic policies from the federal and local government forced traditional shelters to reduce the clientele they could serve in their facilities.
In March of 2020, the Sullivan was turned into that mass shelter by former Mayor Ethan Berkowitz. It was a case of “If you build it, they will come.” The cost was to reimbursed by the Federal Emergency Management Agency, or FEMA.
That’s over 720 days of room and board for up to 500 people, at a cost of about $206,666 per day, according to municipal sources. Clients in non-congregate care — area hotels — are fed from restaurants around town such as Humpy’s, at a cost of $46 per client per day, while those at Sullivans are fed through a Beans Cafe contract.
According to the Municipality, Anchorage Assembly authorized the city to spend nearly $93 million as inter-fund loans made under the Berkowitz and then Acting Mayor Austin Quinn-Davidson emergency order.
All this means if the reimbursement is not received from federal or state governments, the Municipality is authorized to collect additional property taxes to cover this spending. And that means additional taxes can be levied that exceed the legal tax cap.
Less than $30 million of the $84 million in expenses relating to the Covid emergency order, mainly Sullivan Arena shelter, have been reimbursed by FEMA.
Anchorage is spending between $5-$6 million per month on all services related to sheltering, and up to $75 million annually to support sheltering, mostly in the Sullivan Arena, according to municipal sources.
FEMA has been tough on the project reimbursements, requesting additional documentation and even turning down some requests for reimbursements — not only in Anchorage, but in other cities that have been keeping shelters open far past emergency orders.
For over a year, the Municipality has been promising that the Sullivan Arena will be closed “soon,” yet none of the deadlines were ever met under previous administrations, and the early refusal of the Assembly to work with the current mayor on a viable plan led to the inevitable second winter of this arena-turned-shelter.
Those knowledgeable of the situation say that 80 percent of the people using the 32,000-square-foot Sullivan Arena to shelter at night are drug and alcohol abusers with no motivation or intention of cleaning up their lives, regardless of the services that have been offered at the service desk. The facility has been significantly damaged and will cost millions of dollars to restore. For example, the plumbing have been clogged by clothing and other items being shoved down the toilets, which are now unusable.
The previous mayors (Berkowitz and Quinn-Davidson) wanted to open up a shelter at the former Alaska Club on Tudor Road, and $50,000 was spent on earnest money for that failed project — the $5.4 million building would have cost too much in restoration to make it usable and the midtown neighborhood rose up in revolt. That was $50,000 down the drain.
Berkowitz and the leftist Assembly also intended to use the Best Western Golden Lion Hotel as a drug treatment center. The city bought the building for $9.5 million. The neighborhoods nearby revolted and today the building is vacant, unused for any purpose.
The Berkowitz Administration and Assembly also tried to buy a hotel in Spenard, but Acting Mayor Quinn-Davidson eventually let go of that effort in late 2021, as the cost of restoration was also too high.
If other cities’ experiences are any indication, Anchorage property taxpayers will foot the $56.5 million for the Sullivan. And that’s if the shelter is closed right away.
In a report by the Denver Gazette, a similar dispute between Denver officials and administrators with the FEMA may cost that city close to $32 million, “money already spent on homeless shelters last year that FEMA is poised to refuse to reimburse.”
