An appropriation of $338,000 in emergency funding for senior housing at Fireweed Place in Juneau was stripped out of the capital budget Sunday night in the House Finance Committee.
The apartment complex, which houses about 50 seniors, faces foreclosure without a temporary bailout by the state or city.
An amendment by Juneau Democratic Rep. Beth Kerttula to put the money back into the $1.2 billion budget failed on the House floor Monday by a vote of 26-13. Juneau Republican Rep. Bill Hudson broke ranks with the Republican majority and voted yes with 12 Democrats.
The capital budget, SB 247, was given preliminary approval by the House on Monday.
The apartment complex, on Willoughby Avenue downtown, is struggling to pay off a $4.2 million loan from Alaska Housing Finance Corp. The building's monthly expenses exceed income by about $26,000, and its board of directors has said it will not be able to make the June mortgage payment without help.
Juneau Assembly members, waiting to see what developed in the legislative session, held off on responding to a Fireweed Place request for a $100,000 city grant earlier this month.
Kerttula asked House members on Monday to vote with their hearts and approve the amendment.
But House Finance Co-Chairman Rep. Eldon Mulder, an Anchorage Republican, said the project was deemed financially unfeasible when the complex was built in 1995. He noted that Fireweed Place faces foreclosure and any money appropriated for the complex would go eventually to AHFC.
"It was not an easy decision to make in Finance ... these are the ones that kind of rip your heart out because you really want to help the community," Mulder said. "But you look at it and say, 'At what point do we stop throwing money at a project that just isn't going to make it?' "
Rep. Jeannette James, a North Pole Republican who has lived at Fireweed Place for the last three legislative sessions, agreed with Mulder, noting that the complex needs redirection.
"Just this amount of money is not going to solve their problem," James said.
Though the full appropriation was left out of the capital budget, which awaits final approval by the House today, Hudson said he is still working to get six months of emergency funding - about $137,000 - for the complex.
"I am cautiously optimistic that we will have it in before (the end of the session)," Hudson said.
Hudson said he's worked with the Republican majority and the building's board of directors and hopes to attach the appropriation to another bill through an amendment before the end of the day.
"We are constantly looking for vehicles at this stage of the session," Hudson said. "This is the last opportunity to tag something on."
The average 74 percent occupancy rate at Fireweed Place is below the 95 percent anticipated when the building opened. The loan also was built on higher rents than Juneau's market can handle today, according to Thomas Dahl, president of the nonprofit Senior Citizen Support Services Inc., which runs the facility. In addition, the building's smaller studio apartments have been difficult to rent, he said.
"The building of Fireweed Place was the right thing to do, but the Alaska Housing Finance Corp. mortgage loan has been a problem from the beginning," Dahl wrote in a letter to the Juneau Assembly last month. "Due to many political and community factors, the loan was granted in spite of AHFC staff concerns against it."
Fireweed Place also has grappled with city property taxes, securing a downward adjustment in the building's assessed value last year, but not a complete tax exemption. Residential electricity bills were reduced last year after the board of directors filed a complaint with the Regulatory Commission of Alaska.
"AHFC has told us that they don't want the building back. There are some other alternatives with private foundations and sources," Dahl said in an interview earlier this month. "We do need this interim stopgap in order to keep us alive."
Senior Citizen Support Services Vice President Susan Plummer said Fireweed Place also has been working with a Native housing authority to create a partnership to help ease the budget shortage.
Plummer said if control of the complex goes back to AHFC, it likely will open to non-senior residents.
"If it goes back to the hands of AHFC, they will not limit it to people 55 and older," Plummer said. "That's what we are battling."
AHFC officials have said no one who lives in Fireweed Place will be evicted if foreclosure occurs. Fireweed Place is current on its loan payments.
"We're working with them and trying to arrive at an equitable solution if in fact it's necessary," said AHFC Executive Director and CEO Dan Fauske.
Plummer said Senior Citizens Support Services will meet Thursday to decide its next plan of action.
Timothy Inklebarger can be reached at firstname.lastname@example.org. Empire reporter Joanna Markell contributed to this article.