Carroll Gardens Shelter Could Be Goldmine For Landlord

Homeless tenants are worth more to New York City landlords than paying ones.

A report in Friday's New York Times exploring the business practices of Alan Lapes—owner of 165 West Ninth Street in Carroll Gardens, a proposed shelter, and approximately 20 other such facilities—revealed that the city pays him roughly $3,000 per body housed each month. But electeds challenging the emergency contract granted to the South Brooklyn location are calling to question the integrity of the project and whether this is the best use of taxpayer money.

There are "some significant problems with housing policy in New York City, among them the City's willingness to pay a bundle for shelters rather than moving people into permanent housing," District Leader Jo Anne Simon told Patch.

"The ease with which certain property owners and service providers can skirt legal requirements to secure lucrative contracts," she added, is ripe for malfeasance.

After it was first announced in October 2012, the Carroll Gardens shelter has received considerable pushback from the community, many of whom questioned how 170 single men could live comfortably in a 10-unit condominium. But housing a maximum number of occupants with as few amenities as possible is a model that has proved fruitful for Lapes.

The DHS pays more than $3,000 a month for each body housed in even the most "threadbare room without a bathroom or kitchen—because of an acute shortage in shelters for homeless men and women," wrote the Times.

Roughly half of that money goes to Lapes, with the rest designated for "security guards, case managers, workers who do housing and job referrals and other social services" provided by nonprofit organizations like Aguila Inc, which recently merged with Housing Solutions.

Robert Hess, CEO of Housing Solutions/Aguila, Inc., which submitted the shelter proposal to the DHS for 165 West Ninth St. has already been taken to task for not going through the proper channels of communication with neighbors. Further, as a former commissioner of homeless services, Hess approved previous deals with Lapes—a potential conflict of interest.

Adding fuel to the fire, tenants of Lapes' 20 other shelters throughout the city told the Times they "are often characterized by violence, drug-use, mice, broken elevators, periods without heat and hot water, and violations of fire safety laws."

The Carroll Gardens shelter was able to secure a temporary housing permit for homeless men relocated in the aftermath of Hurricane Sandy under an emergency declaration for shelter beds, which the DHS is currently requesting to extend.

But Councilmember Brad Lander, and other elected officials, have urged the City Comptroller and the Corporation Counsel in a letter dated Feb. 8, 2013 to reject "the proposed extension of the emergency declaration—until DHS agrees to operate under new guidelines—and the proposed contract with Housing Solutions USA/Aguila in light of the integrity concerns."

Pending the findings from an audit of DHS contracts with Aguila by Comptroller John C. Liu, Lander believes the shelter should not be allowed to operate at all.

The Councilmember asserts that the DHS has avoided normal contracting procedures by using emergency practices.

Under normal contracting processes there's a notificiation that the shelter solicitation is available, then there would be a public hearing and a notice of a public hearing in the city record. Then, after a contract is registered, there would be a notice in the city record of the award. But in emergency contracting none of that happens prior to the award.

"What I and my constituents have received is a half-page letter from the proposed contractor, not even the Department of Homeless Services, faxed to the local community board declaring their intention to open a 170-bed homeless shelter... with no information on the population, with no service plan, no security plan, no building plan, and zero information that the public would normally expect on the citing," said Councilmember Lander at the City Council’s Committee on Contracts hearing on Jan. 28.

"Even if it didn't have any conflicts, how could we think this was appropriate? How can we think this process is good government?"

Chairwoman Darlene Mealy did not appear to disagree.

"It is critical that we remain vigilant on how New York City tax dollars are spent," she said. "Especially in areas such as this, in which there is less competition and transparency than normal."

Liu has challenged the Bloomberg Administration’s previous emergency contract procedures. His office has also audited DHS contracts with Aguila twice in the past, including March 2010 and November 2011.

Stay with Patch for updates.