Note: This is the third in a series about the Ramada Inn conversion project.
On a cold day in December 2022, Asheville city officials, a contractor, a developer and a nonprofit executive assembled under a big white tent on River Ford Parkway in East Asheville. They gathered for a groundbreaking ceremony on a new permanent supportive housing project at the site of East Asheville’s former Ramada Inn.
The developer, Shangri-La CEO Andy Meyers, a former NFL player with broad shoulders and a charming grin, took the stage to talk about the plans to create a place that might alleviate the pressure on the city from chronically unhoused people.
“You’re going to see this building go very, very quickly, and you’re going to see the price be much, more moderate in comparison to others,” he said. “And ultimately, we are looking to open this building hopefully right around the month of July, end of July, August of 2023…If it is not, it is not my fault,” he said jokingly.
“It’s those guys right there,” he said with a laugh and pointed to the audience. “It’s always the contractor’s fault.”
The building did not open this summer, but it is unclear who is at fault. The people who held the golden shovels that winter morning do not have direct answers for why the city’s chronically unhoused continue to wait —or when the long-awaited doors to the facility will open.
Under Construction?
City officials did not always want to make the motel into a permanent supportive housing site. In a hurried decision a year before the groundbreaking, Asheville City Council voted to switch from buying the property for a low-barrier shelter to assigning the purchase rights to Shangri-La, a California developer with experience in motel conversions for supportive housing.
Shangri-La engaged Beverly-Grant, the local contractor Meyers teased during the ceremony, to begin demolition work.
Permitting records show Beverly-Grant completed the early demolition, and then in July, Shangri-La filed to remove them from the permits.
The developer appears to have found a new general contractor for the project: Concord-based Corban Homes.
Corban Homes Vice-President Timothy Furr confirmed to BPR that his team is working with Shangri-La on the motel conversion. Furr said they have been in conversation about the project for the last few months.
Permits for the project are still “pending applicant action.” The two permits for the next phase of the project, which include early demolition of the west and east building, expired and closed after months of inactivity on the project.
The permits also show outstanding fees of more than $60,000 that must be paid before work can continue, according to a city official.
In late September, Corban’s Furr told BPR his team is “supposed to get going soon” and that the project “should take eight months to complete.” His projection has the construction concluding in June 2024—about 2.5 years since the plan was developed.
Asked about the project’s financing, Furr said his team is “waiting on the first deposit” from Shangri-La’s team.
Furr said he received a text from Shangri-La explaining the reason for the hold-up as “waiting for loan docs to come through.”
Corban Homes did not respond to requests for an update this week. Shangri-La declined to comment on current financing.
Who will pay?
The delay in construction means a delay in the supportive services for the city’s most vulnerable. Council’s 2021 resolution identified a nonprofit partner, Step Up, to run the services programming for the site’s residents.
But Step Up has not signed a contract or received any funding yet, according to the city’s ARPA project manager Kim Marmon-Saxe.
Draft versions of a contract, including one labeled “final,” circulated between city officials and city attorneys in early 2022, emails show.
Under the terms of the draft, obtained through a public records request, Step Up would receive three months of payment in advance of the facility opening.
While Step Up is scheduled to receive $500,000 for the first year of programming from the city’s allocation of federal money through the American Rescue Plan Act (ARPA), funding for subsequent years is unclear.
The $1.5 million three-year commitment was originally proposed as an ARPA expense, according to the city’s initial announcement about the proposal.
At the city council discussion about the allocation, Vice Mayor Sheneika Smith voiced concern about funding the entirety of three years of services with ARPA money. Mayor Esther Manheimer said forthcoming opioid settlement funds could be a possible source for the remaining $1 million.
Council voted to authorize half a million dollars from ARPA and designate another $1 million for future funding from a yet-to-be named source.
The morning after the vote, City Finance Director Tony McDowell emailed other city officials that the second and third years of funding for Step Up would need to be adopted “either as part of the annual budget ordinance or as budget amendments.”
“We can't adopt a budget now with ‘revenue to be identified later’ - I don't recall us ever doing that in my time here and the auditors would likely not look kindly on that approach,” he wrote.
In an email from February 2022, then-Continuum of Care head Brian Huskey wrote, “Staff were instructed to identify another source for the $1 million needed for years 2 and 3, which we've done through an internal source.” Husky did not identify the internal source.
The next day, Huskey wrote to another staff member that he was “still working on Years 2 and 3, which will be affordable housing CIP [Capital Improvement Projects] funds,” he wrote. “Two separate contracts, scopes, and budgets. Ugh.”
In an interview with BPR in late September, Mayor Manheimer said that because council cannot bind future councils to take certain actions, the remaining $1 million will have to come from the annual budget process.
Homeward Bound
The Ramada Inn project was not the only motel conversion to receive city funding.
A local nonprofit, Homeward Bound, successfully completed a conversion of the former Days Inn called Compass Point Village into permanent supportive housing for 87 of the city’s unhoused.
The $17.5 million project was funded with public dollars and private donors, including $2 million each from the City of Asheville ARPA funding, Buncombe County, and the Dogwood Health Trust.
The facility was originally projected to open in April 2023, but contractors soon uncovered a litany of structural challenges, from plumbing to drywall, raising the final price tag by $5 million.
Homeward Bound is still trying to fundraise to cover the final $1.5 million of construction costs, Permanent Supportive Housing Director Jenny Moffatt said.
“It's taken longer than we planned, but I think we're really happy and pleased with the end product,” she said. “I think it’s important for the Asheville community to see a project like this be successful, and hopefully more and more people buy into this ‘Housing First’ model. We end homelessness through permanent housing.”
Though she expressed enthusiasm for the concept, an email exchange with Brian Huskey in December 2021 showed Moffatt’s concern about Step Up’s claim of “secret sauce” for permanent supportive housing.
“Listening to him speak on Tuesday evening it was implied several times that Step Up would be coming into Asheville with ‘Secret Sauce’ and would be the answer to ending chronic homelessness in our community,” Moffatt wrote. “As you can imagine, that messaging was a bit hard to hear for our committed and courageous existing housing services staff.”
Next Steps
Public officials, including Homeless Strategy Division Manager Emily Ball, Community and Economic Development Director Nikki Reid, and ARPA Project Manager Kim Marmon-Saxe, met virtually on September 12 with Shangri-La and Step Up representatives for an update on the project. The city did not allow press in the meeting.
According to Ball, the projected occupancy for the project is still the first quarter of 2024.
When asked on September 12 if she felt concerned about the project timeline, Ball said “I think it is, you know, it's a tough time in the world with construction. And as you know, everybody is struggling with capacity coming out of the pandemic. So I think the experience they're having is right in line with other large projects. I don't have any concerns about it.”
When asked the same question, the Mayor said she also does not have concerns specific to the Ramada Inn conversion, but she does worry about building projects generally.
“I have concerns about every project in the city and the country right now because of escalating construction costs, scarcity of development contractors and personnel,” she said. “So I have general concerns about any project.”
Step Up Vice President of Southeast Programs Arthur Murray said he is optimistic that the facility will open in March. “They’re thinking sooner, but those guys are always…I think they’re a little bit more optimistic than I am.”
