Assembly postpones decision for auction of old hospital

The borough assembly on April 26 postponed a vote to put the old hospital building up for online auction after assembly members raised the question if the $830,000 starting bid went up to or beyond the $1 million limit in the law for selling municipal property without a vote of the people.

If that were to happen, the sale would have to be approved by voters at an election — either the regular one in October, or the borough would have to hold a special election.

The assembly will consider the issue again at its May 10 meeting.

“If it (bidding) went over a million dollars, staff is recommending — and it’s the assembly’s prerogative — that it go to the regular election, not a special, but we’re not positive yet,” Borough Clerk Kim Lane said Monday.

The borough assembly is considering a resolution to put the 30,596-square-foot former Wrangell Medical Center on nearly two acres along Bennett Street up for auction on

Anchorage-based appraiser Reliant on April 21 submitted its valuation of the property at $830,000, which would be the starting bid for the auction.

“Public surplus might get you $2 million,” Assemblymember David Powell said at the meeting, during discussion of the proposed auction.

“You’re not guaranteed anyone will bid,” Assemblymember Jim Debord said.

“Our (home rule) charter says we will not sell anything above a million (dollars) without putting it before a vote of the people,” Assemblymember Patty Gilbert said. “Are we in financial and legal jeopardy? That’s a question for the attorney. We need to rethink this.”

The borough has been spending almost $100,000 a year on insurance and heat since SEARHC moved out of the building more than two years ago and the property reverted back to the borough. The oldest portions of the building date back to 1967.

If the assembly approves the auction, eligible bidders would have to pay a registration fee of $5,000, refundable to the losing bidders.

Excluded from bidding would be people or businesses delinquent in property tax, sales tax, utility payments, or those who have other financial obligations to the borough.

The property is zoned public/open space, which is primarily for governmental purposes. The successful bidder would be required to submit a rezoning request for whatever uses they plan at the property.

The old hospital would sit on the auction website for no fewer than 30 days.


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