The Santa Fe Suites at South St. Francis Drive and West Zia Road has been converted into housing with funding from nonprofits, the city and the federal government. The property is now the subject of a lawsuit filed in state District Court by James O'Hara who alleges he was not compensated when it was sold in 2020.
The former Santa Fe Suites at South St. Francis Drive and West Zia Road is set to be converted into housing for homeless and at-risk families in a city-backed project.
The Santa Fe Suites at South St. Francis Drive and West Zia Road has been converted into housing with funding from nonprofits, the city and the federal government. The property is now the subject of a lawsuit filed in state District Court by James O'Hara who alleges he was not compensated when it was sold in 2020.
The former Santa Fe Suites at South St. Francis Drive and West Zia Road is set to be converted into housing for homeless and at-risk families in a city-backed project.
The sale of a 122-room hotel on South St. Francis Drive to provide housing to some of the most needy and vulnerable people in Santa Fe during the coronavirus pandemic — and beyond — is expected to close by mid-December.
The timing is key.
The city of Santa Fe is leveraging $2 million of the nearly $17.6 million it received in CARES Act funding from the state to help purchase the Santa Fe Suites, and it has only until Dec. 31 to spend the money.
The city is working “diligently” with a New York-based nonprofit that strives to end homelessness and is “confident” the sale could be closed by the middle of next month, Alexandra Ladd, director of the city’s Office of Affordable Housing, told members of the city Quality of Life Committee last week.
“We are supporting this project because we believe that the purchase of an underused hotel motel property to keep our population safe during the pandemic is also the first step toward ending housing instability in Santa Fe,” Ladd said. “I want to emphasize that it’s a step. It’s not going to solve the whole problem.”
Ladd also said city government isn’t going into the lodging business — and the hotel won’t be a homeless shelter, either.
“This is a business model; this is not charity,” Ladd said. “This is not something that’s just going to suck government resources and subsidy from now until the cows come home every single year and need another infusion of support. This is a business model this is intended to support itself.”
Though the mix may change, Ladd said 42 units will be set aside for people who are working, but whose incomes have been reduced or whose health needs have been amplified because of the pandemic.
“Another 40 units or so will be reserved for renters with low incomes who may be employed but are not able to participate in Santa Fe’s housing marketplace,” she said. “The remaining 40 units are dedicated to Santa Fe’s chronic and veteran homeless where they can receive that intensive case management and health care and counseling and have all of their needs met in line with their housing.”
Ladd called the hotel “permanent, supportive housing.”
“These people will have their own small apartment unit as a result of living here,” she said.
The units, which average about 320 square feet, are furnished. Rents, which would include government subsidies in some cases, would range from $500 to $840 a month, generating more than $1 million annually.
Ladd said the property would offer a “coordinated entry system” that is part of nonprofit Community Solutions’ “Built for Zero” campaign, of which Santa Fe is a member. Community Solutions describes the campaign as a movement “made up of more than 80 cities and counties that have committed to measurably ending homelessness, one population at a time.”
The model starts with creating a list of homeless people in the community by name as part of an effort to address individual needs.
“This connects actual housing units to that system because it’s all very well to track somebody and to make sure they get the right referrals to different service providers in a network,” she said. “But if they’re not ending up in housing, then we haven’t actually solved the problem.”
Ladd called Community Solutions a “co-developer” in the project and said it is providing a technical assistance team.
“They’re also underwriting the project,” she said. “They’re figuring out how to finance it and then really trying to make that link between the units and the coordinated entry system, which is … part of the Built for Zero approach.”
On Tuesday, Ladd said the local project sponsor is likely to be a consortium of local services providers.
“We are working with Community Solutions on a series of design sessions to clarify the providers’ roles, which will be complete by closing,” she said.
Other partners include what Ladd said last week are “social impact investors,” which she said is uncommon in affordable housing projects.
“I think you’ll start to see it more and more, but these are investors who are willing to provide equity to the project in turn for a smaller return than they would get if they were investing in other types of investments,” she said. “But they’re doing that because they want to have a positive social impact. They’re willing to take a smaller return on their investment to know that they’re actually doing something good for the community.”
The total purchase price of the property is $7 million, contingent on an appraised value.
Ladd said the city also is considering spending $580,000 in federal Department of Housing and Urban Development funds, which would require an amendment to the city’s HUD Annual Action Plan. It would also require a 15-day public comment period and approval of the city’s Community Development Commission and the governing body’s advisory committees, as well as HUD.
Ladd said purchasing a hotel property to house people who are homeless or have housing instability as a result of the pandemic “or to moderate the effects of the pandemic” is an eligible project under HUD’s guidelines.
