Scott administration delivers long-promised deal to buy hotels for shelters

Mayor Brandon Scott’s administration has landed a deal to purchase two hotels to convert into shelter space for Baltimore residents experiencing homelessness, nearly three years after first making the pledge.

The agreement to buy the two sites, made public Wednesday, adds dozens of replacement beds to the city’s capacity. Both properties — the Sleep Inn & Suites Downtown Inner Harbor and the Holiday Inn Express Baltimore-Downtown — are adjacent and just a few blocks from City Hall. There are 62 rooms in the Sleep Inn & Suites, according to Visit Baltimore, while the Holiday Inn has 90 total beds in 68 rooms. Sleep Inn & Suites is owned by Choice Hotels, whose chairman, Stewart Bainum, is founder and chairman of The Baltimore Banner.

The new beds will not completely eradicate the need for more shelter space in Baltimore, and the number of beds secured through the deal are fewer than what the city initially targeted. In an April 2021 news release, Scott’s office said it wanted to explore acquiring properties with “100-200″ bedrooms and had sought to transition about 600 people living in leased motels and hotels to more “sustainable, long-term” sites.

The city’s five-member spending board will be asked to approve the roughly $18 million agreement at its next meeting. That includes $15.2 million for the two hotels and the parking lot between them, as well as $3.2 million to the current management group for nine months of maintenance and operations, according to Board of Estimates agenda released Wednesday.

Homelessness officials in Baltimore had hoped to have the deal in place sooner. After a second winter passed without the additional shelter capacity, Ernestina Simmons, the newly installed director of the Mayor’s Office of Homeless Services, told City Council members this past November that her office was in negotiations for two hotels and hoped to have a deal “no later” than Dec. 31.

As three cold winter seasons came and went, the expenses surrounding the acquisition continued to pile up. In September, the city’s spending board approved a six-month, $119,000 extension to a consulting agreement with LeSar Development Consultants, a firm retained to help the homelessness office secure the deal, according to Board of Estimates agenda records, pushing LeSar’s total consulting costs to $221,000. The extension agreement expired Dec. 31.

The idea of using hotels as shelter space has gained traction nationwide, with jurisdictions in and outside of Maryland using federal COVID-19 aid to help finance the purchases.

When the Scott administration went public with its hotel search in 2021, it posted a request for information on hotels with on-site laundry facilities, accessible entrances, elevators and kitchen facilities. After successfully moving several congregate shelter spaces into hotels during the initial months of the COVID-19 pandemic and finding that it mitigated the spread of the virus, the city sought to build on that model with hotels it owned outright.

“Providing high-quality and safe facilities for people and families experiencing homelessness is my top priority,” the mayor said at the time, “and we are grateful to President Biden for making federal dollars available to that end.”

The latest data from the U.S. Department of Housing and Urban Development’s annual estimate shows that homelessness in the U.S. increased in 2023 by 12% after a few years of decline during the pandemic. Baltimore’s own 2023 point-in-time count, which uses surveys on a given night in January to estimate the number of people who are unhoused, found a 3% decline in homelessness from the year prior, a number it emphasized was not statistically significant.

Evictions in Maryland also have increased over the last year, state judiciary data shows, nearing pre-pandemic levels. The state is experiencing a severe shortfall of housing units and estimates that about half of all renters are spending more than 30% of their incomes on rent.

Jeff Garrett, chair of Baltimore’s Continuum of Care board — which partners to make recommendations and strategic plans related to homelessness and housing — said he hopes the city will keep its promise to convert the emergency shelter space into long-term, affordable housing units for homeless residents. Though shelter space in Baltimore is lacking, Garrett said, the city needs to be focusing on longer-term solutions.

“We can keep adding and adding and adding shelter all day long,” he said, “but all we’re doing is warehousing people at that point.”

Garrett said it was his understanding that the hotel acquisition process took this long because city officials needed to find facilities that could be remodeled into long-term housing units. And though the total bed capacity of the two hotels comes in lower than city officials had hoped, Garrett said, he always took their original predictions with a grain of salt, expecting the outcome to be lower.

“They’re ballpark numbers,” he said. If the city delivers on its plans to convert the hotel spaces into affordable housing, “then it’s a major win for the city.”

A year ago, officials with the Office of Homeless Services told The Baltimore Banner it had yet to finalize a budget for the hotel acquisitions, a little less than two years after Scott’s initial pledge. Officials set a lengthy timeline for the process, stating at the time that they intended to have the hotel shelters in place by the end of 2024, the federal deadline for Baltimore to finalize its pandemic aid spending plans. Scott told The Banner that the acquisition was complex and had to be done the right way, even if that meant at a slower pace.

The city had set aside about $42 million in federal pandemic aid to acquire shelter space, including the hotels, part of a $90 million pledge in American Rescue Plan Act and U.S. Department of Housing and Urban Development funds for homeless services — the largest such investment in Baltimore’s history, according to the city. It’s not clear what the remaining millions in ARPA funds will be put toward.

That commitment has hit the streets slowly, though. As of the end of December, Baltimore had spent just over $5 million, or a little over 7% of its American Rescue Plan Act investment in homeless services, according to a report the pandemic aid office submitted to City Council last month. Other programs funded with the one-time federal windfall, aimed at connecting unhoused residents with housing, were expected to launch in November, according to Simmons’ presentation to council members at the start of that month. The city has until the end of 2026 to use its American Rescue Plan Act funding.

Over the past year, housing advocates have called on the Scott administration to act faster. At a December vigil that honored 127 people who had experienced homelessness and died in 2023, attendees noted that city officials had not always lived up to their promises to make homelessness “rare and brief.”

At a budget briefing for City Council members in December, Scott administration officials maintained that they were committed to the hotel deal.

“There is an incredibly high level of urgency,” Budget Director Laura Larsen told the council. She and other city officers were meeting weekly or more to get the deal done, she said at the time.

The Office of Homeless Services received appraisals on numerous properties, Larsen said. During the last stretch of negotiations, they were working on bridging the gap between those estimates and the cost the current owners were seeking.

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