LOS ANGELES - The Hotel Association of Los Angeles (HALA) says its member are experiencing delays in procuring COVID-19 rooms for the homeless to meet the Los Angeles City Council’s Project Roomkey quota due to insurer and lender contractual obligations.
Before a hotel can participate in Project Roomkey, the change of use for the property is required to be approved by the lender or insurer, according to Heather Rozman, executive director of HALA.
“I've heard responses from some hoteliers that this use for the property would violate their covenant of lending terms,” Rozman told the Southern California Record. “There's quite a few levels of approval that this process needs to go through. It’s a lengthy process and it's not happening as fast as people would like.”
Homeless person panhandling
As previously reported, some $100 million has been allocated to the Business Consumer Services and Housing Agency for coronavirus prevention and containment among the homeless population and $50 million to the Department of Social Services to reimburse properties for hotel, hotel beds and trailers for people experiencing homelessness.
“It will be enough money for a very short-term period for the purpose of taking in persons experiencing homelessness but for a longer period of time? Absolutely not,” said Rozman in an interview.
Sample contracts that Rozman says she has reviewed show a short-term contract to vary from 30 days to three months with an option to renew.
As of May 6, there were 60,614 positive coronavirus cases statewide and 2,504 fatalities, according to the Department of Health.
"During the coronavirus, everything is on the table, everything is unprecedented and everybody's trying to figure out how to work together," she said. "We are all in this together. We are good partners to the communities that we live in and do business in and we are stepping up. For hotels to be forced into a public health crisis response is new and unchartered territory and we're trying to navigate it together."
The Council voted on Wednesday to investigate any hotels declining to provide rooms for the homeless to determine if they had received tax breaks in the past and potentially take possession of the property, according to media reports.
“It sends a message to investors that you need to think twice before engaging with the city on a property investment for future development,” Rozman said. “It’s not a very friendly position to say, ‘Hey, now that you've invested in our city, we're going to take that asset from you’.”
The Council has grown impatient with hotels, according to media reports, because the industry has only provided rooms to 1,582 homeless people when the program set out to house 15,000.
However, HALA issued a press release yesterday stating that 4,000 rooms of some 30,000 that have been earmarked are currently under contract and 2,500 are in process while insurance liability issues are being settled.
“Rather than getting into a fight with hotels who are already stepping up and willing to participate, there's channels like Motel Six [to look to] that are majorly stepping up,” Rozman said. “Use those assets. When you take public funds and spend it on an extremely expensive asset for a short term solution that is a waste of taxpayer dollars.”
Some 157 hotels are no longer operating since the coronavirus shutdown, according to the HALA press release.
"I am grateful the City Council unanimously voted today to find out why hotels that have received public benefit are not stepping up to protect public health during this unprecedented crisis,” Councilman Mike Bonin told FOX 11