Baltimore finalizes $18M deal to acquire hotels for long-term homeless housing

Baltimore leaders approved an $18.4 million deal Wednesday to buy two downtown hotels to serve as emergency shelter for homeless residents, sites they intend to eventually convert into long-term housing.

The agreement to buy the two sites, first publicized last week and promised nearly three years ago, adds dozens of replacement beds to the city’s capacity for the time being.

Leaders on the Board of Estimates approved the deal Wednesday in a 4-1 vote. Council President Nick Mosby, who has uniformly opposed plans to spend the city’s $641 million pandemic aid, voted against the acquisitions. The total cost includes $15.2 million to buy the two hotels and the parking lot between them, as well as $3.2 million for nine months of maintenance and operations, also approved Wednesday.

The city had set aside more than $40 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.

Homeless services officials stressed Wednesday that while the two hotels, which include 132 beds between them, will initially provide temporary shelter space, the longer-term plan is to convert the buildings into subsidized units for unhoused people.

Thousands of people have approached Baltimore’s homeless services officials for help getting into long-term housing, said Ernestina Simmons, the director of the Mayor’s Office of Homeless Services. “They’re asking us to do better, to do more,” she told the spending board. “This transaction is a pathway to starting that.”

Under the nine-month maintenance agreement at the two hotels, existing ownership will continue to manage day-to-day operations, Matthew Garbark, director of the Mayor’s Office of Infrastructure Development, told the Board of Estimates. That includes supplying soap, linens and towels, providing 24-hour front desk staffing, managing room cleanings and managing HVAC, plumbing, laundry and trash disposal, he said.

Simmons said that once the city takes over operations of the hotels at the end of this year, it intends to convert the units for “permanent supportive housing,” a form of affordable housing that provides subsidized rent and social services, health care, counseling and other supports. The city plans to partner with a nonprofit provider to offer services to residents in the two buildings, Simmons said.

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. Sleep Inn & Suites is owned by Choice Hotels International, Inc., whose chairman, Stewart Bainum, is founder and chairman of The Baltimore Banner.

Homelessness officials in Baltimore had hoped to have the deal in place sooner. In December 2022, 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 Mayor Brandon 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.

As three cold winter seasons passed, the expenses surrounding the acquisition continued to grow. 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.

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 later said it was aiming to acquire around 275 beds to replace capacity in shelters slated for closure.

City Administrator Faith Leach told reporters after Wednesday’s meeting that the city is still aiming to boost its shelter capacity back to pre-pandemic level, saying the city is “on the market” for acquiring additional space. Officials remain flexible in that pursuit, she said, and is open to short-term leases, long-term leases or even a more permanent purchase option.

Since the pandemic, the city’s shelter capacity has fallen from around 650 beds to around 450 today, Simmons said.

The $18.4 million used to purchase the Holiday Inn and Sleep Inn is only a fraction of the total American Rescue Plan Act allotment initially set aside for shelter acquisitions. Leach said remaining funds are going towards other homeless services needs, including maintenance of existing shelter space.

Christina Flowers, a homelessness advocate, told the board Wednesday that she supports the move to acquire the hotels but also warned about the challenges of serving homeless residents, a population she said “can be very disruptive and unmanageable.” Many members of the city’s unhoused population struggle with addiction or mental health issues, and Flowers expressed her hope that city officials are prepared offer necessary supports.

“I want us to work together, and to be able to really navigate this population and their differences,” she said.

Officials stressed Wednesday that negotiations to acquire the two hotels were complex, and Scott pushed back on claims that his administration has only just finalized the deal to get ahead of the Democratic primary in May, when he faces a competitive challenge for reelection.

“Real estate deals don’t happen overnight,” the first-term mayor said. “I think folks — especially folks who used to be in city government — understand that when you’re talking about purchasing hotels and property,” you’re not going to make an announcement and then six months later “be cutting the ribbon for a new facility.”

Adam Willis

adam.willis@thebaltimorebanner.com

Adam Willis covers city government for The Banner, including the impacts of the large COVID-19 stimulus package that Baltimore received from the federal government.

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