Seward Journal logo-color

The Friends of the Jesse Lee Home (FJLH) now say that the organization will miss an Aug. 30 deadline in its years-long effort to purchase the defunct Jesse Lee Home, a derelict structure dating from Alaska’s early territorial days and symbolic home of the Alaska Flag.

Nevertheless, the organization will now ask for a one-year extension on the purchase agreement, according to remarks by FJLH Volunteer Coordinator Susan Lang at Monday night’s meeting of the City Council.

Lang quoted a portion of the July 2014 purchase agreement which opens the door to an extension “if, despite buyer’s reasonable efforts, buyer has initiated the work but not been able to complete the work by the end of the due diligence period.” 

The City Council on Monday directed City Manager Scott Meszaros to meet with the Friends as soon as practicable before the deadline. Meszaros said at the meeting that he would only be free Wednesday afternoon.

During a recess, Mayor David Squires spoke to Lang in the hallway outside the council chambers and indicated that the council would attempt to hold a special session ahead of the deadline to consider the extension request.

The purchase agreement contained three conditions, which the Friends’ were to have completed by Aug. 30, 2019, in exchange for which the city would permanently turn over ownership. Those conditions were the clean-up of hazardous materials such as lead paint, asbestos and below-ground fuel tanks; the installation of 270 feet of water line; and the installation of 220 feet of sewer line.

The agreement was adopted July 28, 2014, and followed a sequence of efforts by the Friends to acquire the property, especially as grant administrators at the Department of Commerce, Community and Economic Development pressured the organization to secure “site control.”

The Friends relied heavily on millions in state grants, which came with stipulations, including a requirement that the organization acquire the deed or a long-term lease to the property.

By the time the purchase agreement had been signed, however, the department had already identified concerns about the Friends’ financial reporting and initiated a financial review that ultimately led to the termination of the grants in July 2015, according to a review of the grant file maintained at the Anchorage office of the Department of Commerce.

Between 2012 and 2015, the Friends were reimbursed for $2.2 million in expenditures. Very little of that money went toward any of the three conditions in the purchase agreement, according to the grant file, even during the period after July 2014 when the agreement was in force.

The Friends spent $16,191.43 on “construction and rehabilitation,” according to a Department of Commerce spreadsheet derived from FJLH reimbursement requests. That is $4,000 less than the Friends paid a single contractor to produce a historical documentary. 

FJLH Board President Dorene Lorenz has long maintained that the Friends lost funding because of hostile scrutiny on the part of the Walker administration. Lorenz has made this claim to the Seward Journal, to Alaska Public Media, in television appearances and on social media.

The grant file at DCCED contradicts this. The file includes numerous documents that refer to an “audit” or “review” going back to at least October 2013, over a year before Walker took office.

At the beginning of the next year, then-grants administrator Rachel Longacre records in an activity log a call she allegedly made to FJLH Executive Director Kirsten Vesel. (Longacre is the grants administrator’s married name. At the time, her last name was Spicer.)

“Call K. Vesel to explain review is extensive now & grant [is] consider[ed] High Risk due to all the problems,” Longacre wrote on Jan. 9, 2014.

Then in August, Longacre again mentions the financial review in the activity log. “Tom Sutton auditing grants,” it says. “Clear, major problems.” 

Sutton ultimately concluded that FJLH’s “administrative and internal accounting controls are materially insufficient, where material errors and omissions are not found and corrected within a timely period. Any financial records, invoices and reports from FJLH are not reliable and accuracy is in question.”

Lorenz has disputed the finding.

Since the grants were terminated, Lang and Lorenz say that the Friends have gathered volunteers to continue working on the building. At the council meeting, Lang described several projects that had been accomplished by volunteers, including the planting of lilac bushes, repair of the fence around the property, and painting over graffiti.

Lorenz also held a fundraiser on social media to raise money to cover the building’s roof this winter, according to Lang and posts by Lorenz on Facebook.

Lang also told the council that the Friends are “actively working with the State of Alaska Department of Labor … on developing the end use of the building: a statewide charter school which would be a feeder for AVTEC.”

Lang’s statement echoes a claim previously made to the Seward Journal by FJLH Board President Dorene Lorenz, who likewise said she is “actively working with the commissioner of labor and her staff to make the Jesse Lee Home and Balto School a [career and technical education] school that’s a feeder for AVTEC.”

The Department of Labor and Workforce Development did not corroborate the Friends’ assertion that the two organizations have an active partnership.

“Ms. Lorenz approached the department several months ago to bring attention to the status of the Jesse Lee Home,” wrote Assistant Commissioner Gerald Pierce in an email. “She shared her idea of a [career and technical education] charter high school at the Jesse Lee Home as a ‘feeder for AVTEC.’

“DOLWD is always interested in hearing ideas associated with CTE and takes pride in the fact that we make ourselves available as much as possible to hear ideas from the public. We look forward to hearing about their progress and wish the Friends the very best in their endeavor.”