Note: This is the second in a series about the Ramada Inn conversion project.
At the height of the Delta variant wave of the pandemic, the Ramada Inn was one of the few places in Asheville where unhoused people could go to get a roof over their heads.
The former motel off River Ford Parkway operated as an emergency shelter beginning in April 2021.
City officials initially planned to purchase the building and convert the motel into a low-barrier emergency shelter for some of the area’s most vulnerable citizens at an estimated cost of more than $24 million.
But in December 2021, to the surprise of many residents, public officials abruptly pitched an alternative plan: assigning the purchasing rights to a private California developer, Shangri-La Construction, who would turn the motel into permanent supportive housing with support services provided by a partnering California nonprofit, Step Up.
At a city council meeting, East Asheville resident Mary Clarissa Marshall was one of several community members who voiced opinions about the change in plans.
“Decisions like the one before you this evening have lasting consequences, and many feel that not enough time research and attention was given to this matter, that public input was stifled, that there was a lack of planning and notice and most of all, lack of listening,” Marshall said.
Step Up CEO Tod Lipka countered community criticism with assurances that the two organizations understood the urgency of the project and had the “special sauce” to get the project underway quickly. In December 2021, he said the motel conversion would only take “about a year or so” to get online and start housing people.
But nearly two years later, the hotel still sits vacant — a stark visual reminder of the continued wait for stable housing by the area’s unhoused.
Since a private developer owns the property and the city did not provide funds for the property, it’s not the role of city officials to provide oversight, Asheville Mayor Esther Manheimer told BPR.
The city's involvement in this is to help provide funds to Step Up for the supportive services, she said.
The city’s communication liaison, Kim Miller, echoed the Mayor’s assessment.
“I can’t really speak for the timeline of construction that we're not in charge of or part of,” she said in mid-September on a phone call with BPR. “Shangri-La owns the building.”
The lack of city oversight now is in contrast to the detailed involvement shown in the email correspondence of city officials in the early stages of the project.
A ‘cheerleader’ and a dealmaker
As out-of-state parties, Shangri-La and Step Up were unlikely candidates for a new housing project by the city, but records show a former city employee, Brian Huskey, brokered the hurried deal.
Focused on finding permanent housing solutions, then-Continuum of Care head Huskey developed a list of possible motels as acquisition targets, he said.
He said he reached out to someone he called an old friend: Philip Mangano, a housing expert with a long history of working with organizations focused on the unhoused.
Mangano served as executive director of the White House United States Interagency Council on Homelessness in the George W. Bush administration. During his tenure as the so-called “homelessness czar,” Governing magazine called him “one part businessman, one part management consultant and one part motivational speaker.”
A proponent of Bush’s “compassionate conservatism,” Mangano led a national push for supportive housing for people with substance use disorder and people with chronic mental illness. Following public service, he founded The American RoundTable to Abolish Homelessness, a Boston-based nonprofit he continues to lead.
In an internal email obtained public through a records request, Huskey referred to Mangano as “the head ‘cheerleader’ for Shangri-La and Step Up.”
Huskey told BPR that Mangano introduced him to Step Up CEO Lipka and Shangri-La’s CEO, Andy Meyers.
“Homeward Bound's Days Inn conversion is a good start, but if we had another 150-175 similar units, we will have end [sic] chronic homelessness in Asheville,” Huskey wrote in an email. “I think this is the team to get it done quickly and cheaply.”
In late October 2021, Huskey emailed two other city officials – then-Community Development Program Director Paul D'Angelo and Nikki Reid – with a plan to bring Mangano for a visit and to include Lipka and Meyers by videoconference. Huskey also invited two councilmembers with leadership roles on housing bodies: Regional Housing Consortium Chair Sage Turner and Homeless Initiative Advisory Committee liaison Kim Roney.
“Just to be clear - they're not seeking any public money for acquisition and rehab - they fund that privately - but if there are public dollars available, there's certainly ways to include them,” Huskey wrote.
He shepherded the project through the city’s bureaucracy and brokered the relationship between city officials, Roundtable’s Mangano, Shangri-La’s Meyers and Step Up’s Lipka, he told BPR.
“Single handedly, had it not been for the fact that I had a relationship for Phillip, they wouldn’t have given Asheville a second look,” he told BPR.
‘Too many cooks spoil the soup’
Mangano’s ties to Step Up long predated the Asheville deal. He met Lipka around 2007 when Step Up was doing motel conversion projects in California, Mangano told BPR.
A few years later, Mangano agreed to join the Step Up Board of Directors, serving as a board member from 2011 to 2015, according to tax documents.
In 2021, Step Up hired Mangano’s nonprofit organization, the American RoundTable to Abolish Homelessness, as independent consultants, paying the Roundtable $156,039 in “nonprofit supplemental services,” the documents show.
The payment was a small fraction of Step Up’s $38.6 million budget, but it represented nearly 28% of the RoundTable’s total annual revenue that year.
In the prior year, Mangano’s organization received $190,818 in fees from Step Up, about 60 percent of RoundTable’s total revenue for 2020, according to the tax filing.
Mangano said he was paid by Step Up “to give them advice and to shape the direction that they were going,” but the relationship did not create any conflicts.
When asked whether he disclosed his relationship with Step Up to city officials, Mangano said he recommended Step Up because they were the only organization with the capacity to do the specific work on a national scale.
“[Shangri-La and Step Up] were the only people who were making private sector money available to get Asheville out of the situation that they were in, so nobody thought about disclosing anything,” Mangano said.
“We all thought it was pretty obvious that I was in some way involved with them and Step Up was involved with Shangri-La and I was involved with Step Up. There was nothing that came to me from Asheville."
He noted he was not involved in negotiations.
Mangano was not the only cheerleader for the California team, according to emails obtained through a public records release.
Correspondence between Huskey and other city employees show Huskey pushed for the city to accommodate Step Up and Shangri-La.
In a November 2021 text message by Huskey, now made available through public records, he suggested to the city’s homeless strategy division manager Emily Ball that Shangri-La and Step Up might be hesitant to work with local governments.
“Their experience with local governments is ‘too many cooks spoil the soup,’" he wrote. “Bottom line is this: if the city is going to present any sort of obstacle, ‘oh we have to wait for this to happen or talk to this or that group,’ they’d rather not waste time tomorrow on a long shot with a lot of BS attached - they have multiple other options at this point and are ready to start writing checks.”
Despite Huskey’s push for a quick timetable in 2021, the project has stalled for months.
In another text message to Ball, Huskey noted a need to refrain from questioning Shangri-La or Step Up too much.
“At this point, they wanna ‘dance with the one that brung ‘em,’ not an 11th hour stranger that will ask a million questions and slow down what they want to do - which is permanently house as many people as possible, as quickly as possible,” he wrote.
A “good ol’ boy network”?
According to the emails, Huskey, Meyers, and Lipka, along with city officials including Ball and Director of Community & Economic Development Nikki Reid, developed a plan to present the project to the community in early December 2021.
The shortage of public details made for a contentious city council meeting days later when Reid presented a proposal to assign the purchase agreement to Shangri-La, authorize the city manager to enter into a funding agreement with Step Up, and allocate $500,000 in American Rescue Plan Act (ARPA) money to fund the agreement.
ARPA funds are federal allocations given to state and local governments for recovery from the pandemic.
According to the minutes, if Shangri-La successfully purchased the property, “the City will be credited back its earnest money and deposits for a total amount of $85,000 from Shangri-La Industries, Inc.”
At the tense gathering, councilwoman Antanette Mosley expressed “transparency concerns” about the rushed process. She questioned the lack of a request for proposal (RFP) process, and said even if it was not required, she saw no reason to skip the review.
“When I asked how we ended up with the proposed partners from out of state, essentially I was told that staff reached out and had heard good things about the organization,” Mosley said. “So immediately to me, in my experience, what I heard was ‘the good ol’ boy network taking place.’”
Mosley did not respond to BPR’s requests for an interview.
Despite pushback from the community, council members voted 6-1 to give the purchasing rights to Shangri-La with Mosley as the lone vote against the project.
Correspondence between city employees on the day following the vote shows a reticence to answer detailed inquiries from concerned citizens.
In an email to Reid on December 15, Huskey commented on an email exchange between Lipka and Susan Feinblatt who identified as a CAN Board Member with questions about the project.
“Maybe I'm overly sensitive, but since the actual operations portion is covered by the rental vouchers (and any tenant-paid rent), I'm not sure either the development or operating pro formas are anyone's business besides Shangra-La's (sic). As a closely held private company to which we're not providing any funding, are we even obligated to respond to these sorts of inquiries?” he asked. “The escalating nature and demands of these requests is headed down a rathole from which none of us will ever exit. IMHO, of course.”
City had “a vested interest”
Huskey left city employment in April 2022 to become the executive director of the Great Smokies Health Foundation, and the city’s baton passed to Community and Economic Development director Nikki Reid.
At a City Council meeting the same month, Reid reported Shangri-La’s closing had been delayed because the U.S. Department of Housing and Urban Development (HUD) required a full environmental assessment.
The delay cost Shangri-La additional money as they negotiated with the seller, according to Reid. If the city waived the return of the nearly $80,000 in due diligence money originally paid to secure its right to buy the property, it might make the deal easier for Shangri-La to close, she explained.
“We’ve been working in partnership with Shangri-La, the seller and with Step up to really oversee this transaction because we have such a vested interest in seeing this permanent supportive housing in our community,” Reid said.
At the meeting, Councilwoman Sage Turner expressed hesitation to grant a waiver and recalled the community concerns prior to the December vote.
“One of the concerns that was frequently in my inbox was what happens if Shangri-La, or this buyer, whomever it may be, comes back for additional monies because they can’t do what they’re saying they’re doing,” she said.
“And here we are, we haven’t even closed and they’re asking for money. It’s a little alarming because these processes should be known by experienced developers, so I am a little taken aback by this sudden request.”
This waiver passed with a 4-3 vote, with councilwomen Mosley, Roney and Turner voting against the return of the funds.
ARPA process bypassed
The move by city council to allocate funds to Step Up from the city’s ARPA money allowed the organization to bypass the city’s own application and selection process.
In the summer 2021, city officials issued a detailed timeline of the application process for organizations who wanted part of the $26 million in federal funding designed to help communities recover from the pandemic.
A team of staff reviewed, evaluated and scored the applications of 70 organizations using three criteria: equitable community impact, project plan and evaluation, and the organization’s qualifications. The lengthy application materials and staff evaluations were made available to the public.
City Council passed the measure for Step Up funding in December, while the ARPA application and review process was underway.
ARPA project manager Kim Marmon-Saxe confirmed to BPR that Step Up bypassed the city’s ARPA application process.
Asheville City Mayor Esther Manheimer told BPR the tight timetable of the expiring purchase agreement and the high need for permanent housing drove the decision to allocate ARPA funds.
“It was either a decision about you know, are we going to help make this project a reality or are we gonna let it go?” she said. “And given the incredible need in our community for permanent supportive housing, we decided it needed to be prioritized.”
The project fit one of the objectives for the money: addressing homelessness and the unhoused, Manheimer said.
“We knew it fell well within the parameters, and the timing of this project could not wait for the conclusion of our pretty long process to make a decision about funding other programs.”
Despite emails showing multiple versions of a draft contract between the city and Step Up, including one labeled “final” in March 2022, Step Up has not yet signed a contract or received any funds.
The city’s ARPA website lists the organizations that received funding allocations. All of the organizations’ project statuses are “Ready to Start” and “In Progress” except one: Step Up is listed as “Project will start in 2024.”
Up next, Part three: Breaking ground and moving forward: the future of the Ramada Inn conversion.
