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City considers bid for Carlyle Care Center

Thu., Dec. 2, 2010, midnight

Buyer would retain staff, mission at adult home

Spokane leaders believe they finally have a viable buyer that will maintain the Carlyle Care Center as stable downtown housing serving people with mental illness.

The city bought the Carlyle in 2006 from US Bank for $3.2 million, using federal Department of Housing and Urban Development money, in an effort to prevent dozens of vulnerable people from being forced onto the streets.

The move was meant to be temporary, but the real estate bust coupled with the Carlyle’s tight finances made the property difficult to sell – at least to a buyer willing to maintain the Carlyle’s mission.

On Monday, the Spokane City Council will consider a proposal from Pioneer Human Services, a Seattle-based nonprofit, to buy the center for $3.5 million.

Marla Gese, Pioneer’s senior vice president for real estate services, said the agency plans to operate the Carlyle pretty much as is and to keep the current staff. The center is licensed for 139 adult residents.

“If we had to lay people off to make it work, that’s not an option we would pursue,” Gese said. “We want to try to leave it alone as best as we can.”

After the City Council approved the purchase of the Carlyle in November 2006, the city’s Community Development Department twice solicited bids on the building unsuccessfully. It later spent more than a year working with the Cathedral of St. John the Evangelist on the South Hill, which created a nonprofit to buy and operate the Carlyle since other options hadn’t been found.

But St. John’s struggled to get financing for the purchase, and church leaders agreed to step aside after Pioneer approached the city a few months ago.

“Our goal was to do the very best we could to keep that population, which is incredibly vulnerable, as safe and secure as they can reasonably be made,” said the Very Rev. Bill Ellis, of St. John’s. “We have a very high amount of confidence that Pioneer will be a good steward.”

The seven-story hotel, built in 1892, was remodeled beginning in 2000 by Jim and Fay Delegans at a cost of more than $12 million. While the center was praised for providing quality care, debt from the renovation hampered the Carlyle and US Bank foreclosed on the building in 2006.

Money from the sale will replenish the city’s Community Development Block Grant fund and will be used on home rehabilitation loans, park, street and sidewalk improvements in low-income neighborhoods, and other projects, said Allen Schmelzer, a city planner in the Community Development Department. The federal money can’t be diverted to pay for other city services.

Since taking over the Carlyle, the city used revenue from the building to pay a Minneapolis firm to operate it.

“We’re going to be pretty much even on this sale,” said Community Development Director Mike Adolfae.

Gese said Pioneer wants to increase its presence in Spokane and began pursuing the Carlyle this year after another opportunity fell through. In Spokane, Pioneer operates Pioneer Victory House, transitional housing for people suffering from drug abuse; Pioneer Pathway House, a low-income apartment building; Pioneer Center East, a long-term treatment facility for people addicted to drugs; and other programs aimed at transitioning federal and state prison inmates back into society.

Pioneer’s 2008 IRS filing shows that it earned nearly $38 million in 2008, which covered expenses of more than $36 million. It also said it had $43 million in assets.

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