City of Denver's Motel Purchase Stalls Over Federal Funding Issues

Denver has planned to purchase this motel on Peoria Street near I-70 and turn it into a homeless shelter.
Denver has planned to purchase this motel on Peoria Street near I-70 and turn it into a homeless shelter. Conor McCormick-Cavanagh
In May, Mayor Michael Hancock announced that the City of Denver would be purchasing a motel on Peoria Street, just south of I-70, to temporarily house people experiencing homelessness.

"This building here behind us represents hope, the transformation that can take place on this property and the transformation that is possible for the people who will call it home. That transformation is foundational to the future of our city and is a pillar for our economic recovery and sustainability going forward," Hancock said at a press conference in front of the Stay Inn motel, which had recently become a Travelodge.

The move to buy this motel was a first for Denver. While it uses motels as emergency shelters, it typically contracts directly with nonprofit entities that own the motels or offers vouchers to people experiencing homelessness that they can use at privately owned motels.

"We have more than 2,500 beds across our network of congregate/non-congregate shelters and hotel rooms for persons experiencing homelessness," notes Derek Woodbury, a spokesperson for Denver's Department of Housing Stability, which was set to contract with a nonprofit service provider to staff and run the motel shelter.

Denver's plan was to have the motel up and running as an emergency shelter by year's end. But the best-laid plans of the Hancock administration have gone awry, thanks to a slow-moving Congress.

"We have been in an extended period of due diligence. We are not under contract for purchase of the property. We did not get congressionally directed spending for this property," explains Woodbury.

Denver had been planning to purchase the motel for $7.8 million and turn it into a homeless shelter, with 94 rooms that could be single or double occupancy, and also host small households. After two years of using the motel as an emergency homeless shelter, city officials hoped to add a permanent housing component to the motel.

Denver anticipated covering $4.6 million of the purchase price using non-emergency federal grant money and an expected $2 million in federal funding that Congresswoman Diana DeGette, the Democratic congressional representative for Denver, moved to secure. "The pandemic didn't create this crisis, but it's really made it a lot worse," DeGette said at the announcement.

In July, the U.S. House of Representatives approved a package of annual appropriations bills that included the $2 million for Denver's purchase of the motel.

But although the U.S. Senate agreed on a deal to fund the government, senators haven't yet agreed on a budget for the country, kicking that decision into 2022. And until that budget is passed, Denver won't receive a guarantee that the funds are coming. And if the $2 million isn't guaranteed?

"I don’t have any additional information to share at this time on this, other than we are in an extended period of due diligence," says Woodbury.
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Conor McCormick-Cavanagh is a staff writer at Westword, where he covers a range of beats, including local politics, immigration and homelessness. He previously worked as a journalist in Tunisia and loves to talk New York sports.