The La Quinta hotel and an adjacent Denny’s restaurant being considered as a homeless shelter and service center may come with substantial repair costs before the site can be usable, according to county documents and communications related to the project.
Here’s what we know about the project so far.
With renovations, the total project is nearly $10 million
A May 9, 2023, memo notes roof issues at the now defunct Denny’s in an early tour of the property.
Pat Dunn, vice president of Highlands Real Estate, wrote in an email to Joe Karlin and Lee Jost, who advocated for the project, that the Denny’s has “major roof problems and is probably at least a $1 million dollar expense to get up and running again as there is a ton of water damage plus it needs a new roof and a lot of (furniture, fixtures and equipment) to make it usable.”
Dunn also noted the hotel lacks sprinklers throughout the building but relies instead on a standing pipe system at the stairwells.
In another document outlining justification for the capital expenditures, county officials wrote that the hotel property would need an estimated $2 million in renovations, and the restaurant $1.9 million, bringing the total cost to $9.9 million.
However, the cost above the $6 million county commitment is expected to come from philanthropic organizations, the document said.
The contract the commission approved also requires the seller to list operating costs of the buildings and all known defects and malfunctions within 10 days of the effective date. However, county officials declined to provide that list to the Post due to the confidentiality of negotiations.
The county has committed $6 million in federal funds, and the remainder is proposed to come from philanthropic organizations some of which have reported a strong interest in helping with the costs, according to the document.
A nonprofit will take over shelter operations when it opens
The plan is to have a nonprofit organization take over shelter operations once it’s fit for occupancy.
The county commission voted in December to enter into a contract to buy the properties on the northeast corner of 95th Street and Interstate 35 for $6 million. The money would come from federal coronavirus relief funds.
Proponents of the project see it as uniquely fitted to that use because of its location near transportation routes and away from residential areas and because of its layout as a hotel.
County Chairman Mike Kelly, in an interview Tuesday, called it a “unicorn” and an opportunity to address homelessness far more economically than it could through other means.
The annual point-in-time count conducted by United Community Services in January 2022, identified 212 individuals experiencing homelessness in the county. About 80% were households without children. In 2023, the same survey found 235 individuals, of which about 75% were adult-only households.
However, there are no beds for unhoused adults who are not fleeing domestic violence or involved in the justice system, according to the county report.
The county must meet ‘challenging’ deadlines
Now that the contract has been approved, the county is under pressure to get its due diligence completed before the clock on the federal money runs out Dec. 31.
There are additional deadlines within the real estate contract as well.
For instance, county officials have 270 days to complete due diligence on the property. If the contract became effective immediately after the commission voted on it Dec. 14, that would be Sept. 9 or thereabouts.
The $350,000 in earnest money payments is also due in stages. The first payment of $100,000 is due 90 days after the contract became effective, or mid-March. The final payment is due in 270 days.
Assistant County Manager Joe Connor told commissioners during a Committee of the Whole meeting Feb. 22 that meeting those deadlines will be challenging.
“I still think it’s going to be a challenging process to get everything done that we want to get done by the first part of September,” he said.
Commission approves $6M in case sale does not go through in time
To that end, commissioners voted to direct staff to set aside $6 million in case the sale does not close by Dec. 31. If that happens, then the county still has another qualifying project it could substitute for the federal COVID money, officials said.
That vote was 5-2, with commissioners Charlotte O’Hara and Michael Ashcraft in dissent.
O’Hara said she did not support spending $6 million for the shelter in the first place. Ashcraft disliked the implied earmark and said he would rather see direct tax relief.
Kelly said Tuesday that everything is moving forward as anticipated. There’s still a lot of investigating to be done, he said, but there’s been a good response to a county request for an entity to eventually run the shelter.
Big-dollar repairs are something that would be considered by the commission, he said.
“It would come back before the board if we find there’s going to be significant problems that are going to need multiple millions of dollars of repairs,” he said. “I’m sure that is something that would come before the board before we make final determination before spending the $6 million.”
