An Associated Press report in Sunday's Empire gave the impression that 60 senior residents of Fireweed Place would be "displaced" if emergency funding wasn't found to help the facility meet its loan payment obligations. Seniors shouldn't pack their bags just yet. There's more to this story.
The downtown apartment complex is operated by Senior Citizen Support Services Inc., a nonprofit group set up to own and manage the 67-unit congregate housing facility.
The Alaska Housing Finance Corp. holds the loan on the building. AHFC cannot make material changes to the terms and conditions of the loan because it is bound by the promises it made to the bonding agency.
Since Fireweed Place is current on its note payments, it is premature to determine if AHFC would move quickly to foreclose on the facility.
Sherrie Simmonds, corporate communications officer for AHFC, said this past week that AHFC has been working with SCSSI to find ways to make the apartment complex viable. She stated that, "The last thing we want to do is take the property back."
She also made it clear that AHFC is happy with the current management at Fireweed Place and that no seniors living there now would be evicted.
If foreclosure does happen and AHFC assumes the deed, the state agency would then weigh a number of options with the sincere intent to preserve housing for existing senior residents and seek ways to keep the facility as a seniors-only complex.
Another possibility would see a private firm take over the deed and operate the facility for profit. In order for the facility to be profitable, it would need to operate at a higher occupancy rate and likely could only do so by renting to tenants other than seniors.
A more remote possibility might include some sort of a subsidized housing plan.
SCSSI owes $4.2 million on the Fireweed Place loan. Monthly rental revenues currently fall short of expenses by $26,000. The organization's reserves are depleted.
Should Fireweed Place have been built in the first place is a question that has lingered since its inception. Two consultants' reports generated before the project was authorized cautioned that the project would not be financially viable as conceived.
The owners of Fireweed Place made an appeal for $338,000 in emergency funding from the state. The amount was included in Senate Bill 247, but was stricken from the $1.2 billion local appropriations measure. Yesterday, Rep. Beth Kerttula tried in vain to reinstate the funding by amendment. The bill has since been finalized without the funding.
The Juneau Assembly has also received an appeal for a $100,000 incentive grant contingent upon approval of the state funds. The grant would provide a financial cushion while SCSSI tries to find a way to make the facility sustain itself.
The Assembly's finance committee will make a decision on the request on May 29.
With the failure of appeal to the state for help, it will be difficult for the Assembly to justify the grant at a time when funding for a wide variety of city programs and other obligations is so stressed.
Hopefully a long-term solution will emerge this summer.
Juneau Empire ©2014. All Rights Reserved.