Mental Health Trust panel recommends 1 percent rent for behavioral health nonprofit

The Alaska Mental Health Trust would forgo at least $3.2 million in uncompensated rent over ten years under a recommendation to lease an Anchorage building to a nonprofit for about one percent of its market rate. The nonprofit serves only Trust beneficiaries, by the committee's own account, the same people the Trust's land earnings pay to serve.

The Trust's Resource Management Committee recommends that trustees approve a 10-year lease of Trust land at 2600 Cordova Street to Volunteers of America Alaska. The starting rent would be $3,266 a year, rising 10 percent every five years. The notice puts the annual fair market rent for the property at $326,586 in year one, and states that over the term "it is estimated that the uncompensated use of Trust land will be a minimum of $3,233,200."

The committee frames the below-market lease as a beneficiary-related use in the best interests of Trust beneficiaries. Its July 30 memo, posted with the meeting materials, says Volunteers of America Alaska "serves 100% trust beneficiaries," counts 600 people with mental illness and substance use disorders plus 1,800 family members, and notes the organization has rented in the building at market rate for seven years. The lease would expand it from two suites to four, about 41 percent of the building.

Against that, the Trust Land Office, which manages roughly one million acres, states elsewhere that it has a responsibility by law to maximize revenue from Trust land assets; revenue from land sales and leases goes into the Mental Health Trust Fund, whose earnings pay for programs supporting Trust beneficiaries across Alaska. Below-market leases to nonprofits serving beneficiaries have precedent: the Trust affirmed best interest decisions in April for leases to Assets Inc. and Catholic Social Services.

In a May 12 letter requesting the rate, VOA Alaska president and chief executive Julia Luey called the property "the organization's operational homebase."

Written comments are due by 4:30 p.m. Sept. 16. The grounds are narrow. The notice invites comment only from persons who believe the recommendation is not in the best interests of the Trust or its beneficiaries, or that it is inconsistent with Trust management principles. Comments go to the Trust at 3745 Community Park Loop, Suite 200, in Anchorage, or to Valette Keller, the staff contact listed for the recommendation. The first full board meeting after the deadline is Nov. 18 and 19.