A Billion-Dollar Industry Chasing Its Own Tail
A weekend topic starting with Bisnow New York. "The pandemic and its associated travel bans crushed hotels across the country, but the sector has come back in force thanks to a slew of positive fundamentals for the asset class. Soaking up inventory is the city’s approach to the migrant crisis, which is to set up arrival centers in hotel rooms. The Adams administration is paying $220M to the Roosevelt Hotel’s owner, the state-run Pakistan International Airlines Corp., to occupy more than 1,000 rooms. The hotel is now being used as the city’s central intake center for all arriving asylum-seekers, Adams announced in May. More than 140 hotels have a deal with the city."
"'The economic model for these for these migrants is very, very positive,' said Daniel Lesser, CEO of LW Hospitality Advisors. 'I'm working with a client now, a family office knows nothing about hotels, they bought up a couple of hotels in and around New York City, specifically for housing migrants … They've retained me to help them figure out, when this is all over, what is it gonna look like as a hotel, when the whole migrant situation is over.'"
CBS Colorado. "The Denver Housing Authority has approved the purchase of the 194-unit Best Western Central Park hotel located at 4595 Quebec Street. The hotel will be used for permanent supportive housing. The property will be purchased for $25.95 million using approximately $11 million from the DHA Delivers for Denver bond funds. This purchase will support Denver Mayor Mike Johnston's plan to help 1,000 unhoused residents move indoors and get them off the streets, according to the DHA. 'Unsheltered homelessness is an emergency situation in Denver, and we are laser focused on bringing 1,000 people safely inside while permanently decommissioning encampments by the end of 2023,' Mayor Johnston said."
Colorado Newline. "Data released this week shows homelessness in the Denver metro area rose sharply in 2022. Veronica Waters, a Safe and Clean Denver member, predicted that Johnston’s approach would cause Denver’s homeless population to increase by drawing people from other cities and states. 'They’re coming here to use drugs, and to take advantage of our system, as well as our leniency with law enforcement,' Waters said. 'We are going to attract people from the whole entire Rocky Mountain region to come here and get our goodies.'"
Denver 7 in Colorado. "'Personally I am becoming increasingly concerned that the community's concerns aren’t being addressed,' said Curtis Park resident Cory Jaffe. 'I think if you walk around Curtis Park, Five Points, there is nonstop camping, nonstop drug use.'"
NBC Boston. "For years, drug use, robberies and prostitution have plagued the Back Central neighborhood of Lowell, Massachusetts. Now, residents are pleading for help from city officials. The city is trying to combat the problem with a new police precinct on the first floor of a Lowell Housing Authority property. The South Common Village on Gorham Street is one of the most impacted areas. Its coordinator, Naida Gonzalez, says an average of more than 80 needles are found on the property each week."
"'We find a lot of drug paraphernalia,' Gonzalez said. 'Needles are a big thing. A lot of pipes, different things like that. Even weapons. We've found plenty of that.' She says her residents are on edge with the constant criminal activity at the South Common, and that who don't live there are the ones disturbing the peace. 'A person hit someone else over the head with some type of metal object, and he was, like, in critical condition and had to be evacuated,' said Gonzalez."
ABC 7 Chicago in Illinois. "After losing a loved one to drug use, Vincent Lee knows all too well the price of opioid addiction. 'He used periodically, and his last one was his last one,' Lee said. Lee's 50-year-old first cousin is among the scores of victims of accidental opioid overdoses involving fentanyl. 'They are putting fentanyl in the cocaine, getting people twice as addicted,' Lee said."
From KXAN. "Students from The University of Texas will come back to campus for the fall semester in the next few weeks, but it comes as students are raising concerns about safety in West Campus. 'On campus specifically I have never run into any issues,' said UT student, Paulina Pearson. 'But definitely in West Campus is where I see people yelling at me. Some guy followed my roommate into our apartment the other day and he was screaming at her and followed her in.' People using drugs and begging for money on the Drag is a common sight for students. KXAN viewers have also reached out about a homeless encampment near the University of Texas CO-OP. Drug paraphernalia and human feces were spotted by KXAN crews when we stopped by."
My Northwest in Washington. "A Seattle woman was assaulted right outside her own home in Seattle’s Ravenna neighborhood. She says a new RV resident in the area shoved her in the face – after she simply said hello. 'I was stunned and bewildered,' said Anne Goodchild, who has lived in the neighborhood for nearly two decades. Goodchild said she walked out of her home with her daughter last week and simply greeted one the RV residents outside. 'I said something like kind of causal, like how’s it going?' Goodchild said. Then she says the woman started yelling at them and following them. 'She was like, what are you looking at?' Goodchild recalled. 'She got closer and closer to me and she put her hand in my face and pushed me. I feel a little anxious just talking about it.'"
"She said she filed a police report, and saw an officer come by in the following days. But the woman is still in the neighborhood. 'It’s this concern about just my physical safety, in my own street,' Goodchild said. She is currently driving out of her home, instead of walking places. Other neighbors told KIRO7 they’ve also stopped walking outside their own homes. 'I feel totally unsafe. I’ve started parking my car in the back,' said Julia, who was too worried to appear on camera. Residents say the situation started escalating over the past few weeks. 'I’ve filed maybe 26 reports,' Julia said, scrolling through all the reports she submitted to Seattle’s Find It Fix It app. 'They’ve been dumping trash, brought a BBQ grill out… drug paraphernalia, burnt foil,' Julia said."
South Seattle Emerald in Washington. "Services Not Sweeps is organizing a rally on Aug. 2 from 12 to 2 p.m. at City Hall to move the City Council to ban encampment sweeps during extreme weather and winter.The City budget increased funding for Seattle’s sweep task force, the Unified Care Team, by $13.5 million during the last budget session, bringing total endowment up to $37 million. And it’s not just Seattle, either. Other cities also spend millions of dollars on clearing encampments. Among the four of the nine cities they studied (Houston, Chicago, Tacoma, San Jose), sweeps cost between $3,393,000 and $8,557,000. While San Jose spent the most money on encampment sweeps, it only had the second-highest cost per capita. Tacoma spent an estimated $3,905,000."
"'Even if people are going inside after sweeps, nine times out of 10, we see them back again,' said Jay Jones, an organizer working with Services Not Sweeps, speaking on behalf of himself and not the coalition. 'We’ll help someone out after a sweep, and then we see them back on the street and they’re like, ‘Oh yeah, you know, they just shoveled me halfway across the city to a new place and I did talk to the case manager for a month. And all my friends are out here, so I just came back out here because I was having a terrible time.’"
From CBC News in Canada. "Five years ago, the Old Brewery Mission had to use naloxone on clients about once year, but since opioid toxicity skyrocketed during the pandemic, workers at the Montreal homeless shelter have had to use the life-saving medicine every day. Sometimes, they don't make it in time. Just this week, two of the shelter's clients were found dead in suspected drug poisonings. 'That's hard. That's really hard,' said Vincent Dubois, the shelter's training co-ordinator, who teaches colleagues how to use naloxone and what to do when they find someone overdosing. 'We're nowhere near the end of this crisis. I'm telling you, it's far from over.'"
"While drug poisonings have been on a steady incline across North America for the past decade since the powerful synthetic opioid fentanyl hit the streets and began tainting drug supplies — the number of yearly opioid-related interventions in Quebec was nowhere near the statistics out of British Columbia, Alberta and Ontario. According to data released earlier this year by Quebec's Institute of Public Health (INSPQ), more than 500 people died of suspected poisoning with opioids or other substances from October 2021 to September 2022. In comparison, in 2017, there 181 deaths. In 2018, there were 424. The epidemic is becoming more visible in the Montreal area, as it coincides with a severe housing shortage."
Mission Local in California. "On Thursday, July 13, Mayor London Breed wrote that, of 115 people cited or arrested for public drug use in the previous two weeks, none accepted services, and the overwhelming majority were not San Francisco residents. It’s a common refrain. Mission Local decided to find out: What does that offer of “services” look like? More than 30 people surveyed, all of whom were frequent drug users who have been cited or arrested by San Francisco police in the last two years, had little to no idea."
"'They cram it in really fast when they’re discharging you [from jail], right in with all the other things they say,' said a woman named Sylvana, who was staying on Minna Street and grew up in the Fillmore. 'You basically miss it.' Earlier this month, a young man named Kado sat on a ledge at Seventh and Mission streets. 'I’m high every day,' said the 24-year-old as he searched for a lighter to smoke fentanyl off some tin foil, scratched-up glasses falling down his nose."
"On May 24, shortly before the May 30 crackdown on public opioid users, arrest logs confirm that police nabbed Kado for allegedly selling fentanyl and crack, which he says were for personal use and not sale. In less than 24 hours, he was released 'on OR,' or on his own recognizance, with a written promise to appear in court the following week. When asked about the offer of support through programs connected to jail on his release, Kado only laughed, looking confused. 'Most people just want to get out of there,' he said."
Hoodline in California. "San Jose's commercial real estate landscape is facing tumultuous times amidst post-pandemic fallout as key properties default on loans and investors scramble to remain afloat. The recent default of an office building at 5729 Fontanoso Way in South San Jose, purchased for $27.4 million by Atlas Capital Investments in May 2022, serves as a stark reminder of the market's vulnerability according to the Mercury News. Another notable default is a San Jose office building at 152 North 3rd Street, reported by Hoodline, which is connected to ex-WeWork CEO Adam Neumann through his private family office, Nazare Asset Management."
"A $31 million loan issued by Rialto Capital Management for the property in 2021 has landed in default as well, further complicating the status of San Jose's stagnating office market. As the pandemic continues to impact the office sector and tenants remain uncertain about their leasing plans, the availability rate for San Jose's downtown area has climbed to 28%. Class A buildings, in particular, are feeling the pressure as their availability rate hovers at an alarming 37%."
"For the Fontanoso Way location, the building had been intended for Khloris Biosciences, a biotech firm. Despite being prominently featured on the company's website and raising $5 million in a venture funding round in 2018, no visible indicators suggest Khloris Biosciences ever moved into the office space according to Mercury News. Weeds have overrun the building's landscaping, debris litter the pathways, and a padlock graces its front door."
The Marina Times in California. "When CNN announced that former Bay Area reporter Sara Sidner would be coming to delve into San Francisco’s lethal cocktail of fentanyl and homelessness, I knew what to expect. For the May 2023 special, Sidner asked people living on the streets why they came to San Francisco to be homeless and got the same answers I’ve gotten for years: It’s easy. Easy to get drugs, do drugs, put up a tent, steal to support your habit — and San Francisco will pay you more than $600 a month for the pleasure."
"It may not come as a surprise, but cities that offer general assistance payments have more than twice the rate of homelessness as cities that don’t. For example, San Francisco and New York City have the highest rates at 10.4 and 10.9 per 10,000 people respectively. Still, San Francisco’s homeless advocates believe money is the answer, with organizations coaching new arrivals to say they’re 'from San Francisco' while helping them navigate the system. The 'nonprofits' themselves complete what has become a billion-dollar industry chasing its own tail, with 59 providers receiving $240.6 million in fiscal year 2019–20, according to the latest audit by the city’s budget and legislative analyst."
"When Sidner sat down with former mayor Willie Brown to ask why he believed San Francisco couldn’t make a dent in its catastrophic homeless problem, Brown was succinct: 'It is not designed to be solved. It is designed to be perpetuated. It is to treat the problem, not solve it.' Whether Sidner edited the piece purposefully or not, it was apropos that Brown’s comments followed an interview with Jennifer Friedenbach, executive director of the Coalition on Homelessness (COH), where she’s spent the last 25 years presenting herself as an expert on the subject."
"What are Friedenbach’s qualifications? She doesn’t really have any. Her vague résumé includes a lot of fundraising and, prior to COH, serving as director of the Hunger and Homeless Action Coalition of San Mateo County. Her skill set, as thin as her résumé, touts 'a long history of community organizing, working on a range of poverty-related issues including welfare rights, housing, homeless prevention, health care, disability, and human and civil rights.'"
"COH is also opaque in their 990 filing, required by the IRS to verify that nonprofits should keep their tax-exempt status. It’s no secret the IRS rarely audits these forms The COH mission statement tells you what the rest of the 990 will look like (and that they need to hire a copy editor). 'Our vision of our city is where housing is a human right where homelessness is only ever temporary and dignified and where those are forced to remain on dignified and where those are forced to remain on…' it rambles and repeats. (And yes, those are the exact words.)"
"For 2021, COH lists salaries, other compensation, and employee benefits as $487,511 with 10 people receiving the title 'Individual Trustee or Director,' but the only salary goes to Friedenbach (a paltry 50,340 for the listed 40-hour workweek). So, where did the other $437,171 go? Your guess is as good as mine. I’ve referred to Friedenbach as 'CEO of the city’s de facto homeless marketing agency,' spending their money on Sharpies and cardboard to make the handwritten signs they hold up at City Hall protests, but her crowning achievement actually goes back to fundraising: 'crafting Prop C Our City Our Home, a tax on corporations that pays for homeless housing and will double San Francisco’s efforts to address homelessness.'"
"Then there’s the Field of Dreams analogy 'If you build it, they will come' — after San Francisco houses the estimated 4,400 people now on the streets, what happens when more show up? If it’s starting to sound like Friedenbach doesn’t really want to solve this issue, there’s more: In September 2022, COH helped seven homeless individuals file a lawsuit alleging San Francisco violated their rights by 'punishing residents who have nowhere to go' when removing tents and belongings from public spaces, with the goal of forcing the city to spend billions more on 'affordable housing and other resources.'"
"U.S. Magistrate Judge Donna Ryu later agreed, granting an emergency order based on 'evidence” presented by COH that the city regularly violated its own policies when clearing people from encampments without offering adequate access to shelter, which, in California, is illegal.' To many of her critics, Friedenbach is nothing but a fraud, sitting on the oversight board of OCOH, created by legislation she was instrumental in passing, while accepting a $250,000 grant for her own nonprofit to prepare testimony and train presenters to influence decision makers. OCOH is pushing millions toward Friendenbach’s pipe dream of 'permanent housing for all' at the same time COH is suing the city for not offering enough shelter."
"With conflicts galore, it’s time for Friedenbach to step down from OCOH. It’s also time for officials to stop listening to Friedenbach about the homeless crisis — after 25 years of big talk, her lack of success is visible each and every day on the streets of San Francisco."