City leaders work to iron out the wrinkles in motels-to-homeless-shelters strategy

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The city of Austin has agreed to purchase the Rodeway Inn off of I-35 near Oltorf to be used as a homeless shelter. (KXAN/Alyssa Goard)

AUSTIN (KXAN) — Last month City of Austin staff announced they’d be focusing their efforts toward a new strategy to address homelessness: purchasing motels to be converted into shelters.

At a council work session Tuesday, city leaders were briefed on more details of the strategy and shared some initial concerns about how the process of acquiring motels will proceed.

Notably, comments from city leaders suggested that the city is discussing the purchase of a second motel to use as a shelter.

The details of this possible motel purchase will be discussed in executive session, city leaders said. November 14, council gave the city the green light to purchase the Rodeway Inn, a motel near I-35 and Oltorf Street, to be used as a site for shelter and services.

With the Rodeway Inn property, the city is allocating $6.4 million to pay for the building itself, plus an additional $1.6 million to get the building ready. In total, the city will spend $8 million on the acquisition and renovation. Those dollars will come from certificates of obligation.

“It sounds like there’s gonna be something on executive session today or Thursday and that there might be something on council agenda next week or as early as Thursday,” said Matt Mollica, the executive director of Austin’s Ending Community Homelessness Coalition, referring to the discussion around the potential purchase of a second motel. Mollica, who took on this role with ECHO this year, has worked on similar shelter projects in his prior jobs in Denver and San Francisco.

The city plans to purchase the motels and ECHO has agreed to fundraise the operating costs to make them work. The Rodeway Inn will house more than 80 people and ECHO expects that as people transition out of the shelter, this operation could serve hundreds of people over the course of a year.

Ultimately, ECHO is willing to fundraise as many as 200 to 300 motel units as part of this effort.

Assistant City Manager Rodney Gonzalez explained that the city will purchase these motels and then carry out a long-term, below-market-rate lease of these properties to ECHO.

Mollica said that the cost associated with running a hotel that has between 85 to 100 housing units plus support services winds up being around $1 million dollars per year. He said that breaks down to an operating cost of around $300,000-$400,000 per year and a cost for support services of around $600,000-$700,000.

ECHO has been working with City of Austin staff to acquire and roll out the strategy for these motels. In a recent memo the city noted it would screen “all motels for sale within the City of Austin” for the potential to serve as a shelter.

The housing supplied in these shelters will be “bridge housing” meaning that people staying there won’t have to pick up and leave each morning as they do in other homeless shelters in the city.

“Folks will have access to those units and they won’t have to leave during the day, so it’s not a shelter situation where they’re being asked to leave when they come and go,” Mollica explained. “[They can] feel free to bring their belongings, their partners, their pets, they’ll be able to make a home out of it.”

He added that the idea is to convert these motel units to permanent supportive housing in the long-term so that if people who stay in the shelter want to stay there long term, they can.

City Council members at Tuesday’s meeting told ECHO and city staff that while they support the motels-to-shelters model, they want to be kept more in the loop about the process.

Mayor Pro Tem Delia Garza expressed some frustrations with the way in which council members have been informed about the process of acquiring motels.

Garza referenced how much time the city put into the debate around the now-scrapped idea of creating a homeless shelter off of Ben White which was approved earlier this year. At a previous work session in November, Assistant City Manager Gonzalez announced that the city would no longer be pursuing the Ben White shelter option.

“There was significant discussion and since the approval of the one that was in South Austin that we decided not to do,” Garza said. “And when I say ‘we’ I don’t know who the ‘we’ is. Because that was a vote by this council to [purchase the Ben White shelter] and then we were told we’re not going to do that after all.”

“From my understanding of where the next ones will possibly go, they will go in the majority-minority districts of our city,” said Garza, whose district is in southeast Austin.

“So I hope that as we continue these searches for these needed facilities, we sincerely do look throughout the city, because I will have big concerns if every single one of these is going to be in the majority-minority parts of our town,” she continued.

Mollica agreed that the location of these shelters will be very important and acknowledged that most of the shelter locations identified so far have been on the eastern side of the city and along the I-35 corridor.

“I think it’s going to be crucially important that we identify places across the city,” Mollica said, noting that it will also be important to add these locations near things like transportation services and grocery stores.

Assistant City Manager Rodney Gonzalez said that the real estate office is scanning the entire city to look for motels that could fit for this effort.

Council Member Kathie Tovo also expressed some confusion about the information she’d been getting from the city manager’s office about the timelines for these motel acquisitions, saying she got a memo yesterday that the council would next week be talking about the purchase of an additional motel.

“I’ve said I think it’s a great idea, I’m on board,” Tovo clarified. “Before we continue with this strategy, I’d like to see a business plan, a real plan for how these funds are going to be raised.”

Mollica said he took Tovo’s point and will bring back information about a fundraising plan to the council.

“ECHO’s working really hard with our philanthropic partners with foundations in the area to raise the funds necessary to operate the hotels,” he said. “And I think the request from the council to have a more specific fundraising idea about where the money is going to come from and how we’re going to raise those funds makes a lot of sense and we’ll bring something back to council.”

Mollica said he is confident that ECHO is ready to fundraise the amount of money needed to run these new shelters.

“I think what we do is go to foundations and places you’ve [gotten] support from in the past, you talk to them about the new initiatives and institutions, healthcare institutions, you go to private philanthropy in the city, you say ‘You know this is what we think is really going to work to get our numbers down and people experiencing homelessness really want this type of resource,’” Mollica said.

“We have to approach that with that attitude that they are human beings that just need a little help to get ’em off the street,” said Council Member Pio Renteria of people experiencing homelessness in Austin.

In response to questions from Council Member Renteria, Mollica noted that community members would be able to tour and learn about the motels-turned-to-shelters. Mollica added that services at the shelter such as walk-in clinics or food banks should also be accessible to community members who live nearby.

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