With redevelopment coming, homeless moving from Far East Side hotel | Local Government

The county, which is still sheltering about 65 homeless at the Madison Plaza as of this week, has identified another hotel in the area that will be the site of an extended program through the end of September. The city, which has been renting a smaller number of rooms at the hotel for the homeless, is not pursuing different hotel rooms for about a dozen homeless still there, but still provides support services for about 30 people. 

Meanwhile, a developer is proposing to convert the two-story, 197-room Madison Plaza, 3841 E. Washington Ave., into 155 to 190 lower-cost studio and one-bedroom apartments with amenities for residents. It’s the second proposal to convert the hotel to housing in the past year.

In March 2020, the county started non-congregate hotel shelter primarily for homeless adults considered at high risk for severe illness if they contract COVID-19 or those who need isolation or quarantine if symptomatic or exposed to the virus, partnering with several hotels to provide rooms. Since August, the county has rented 100 rooms at the Madison Plaza. As part of the arrangement, the county has worked with providers to deliver meals and a variety of services and 24/7 staffing on site. 

Then, in November, the city rented the 35 remaining usable rooms at the hotel and contracted with Focus Counseling to provide support services and arrange for meals. The 35 hotel rooms combined with a new encampment with 30 tiny shelters the city built on the Southeast Side to shelter the approximately 70 people who had been staying at the now-closed, unsafe, unsanctioned encampment at Reindahl Park near East Towne.

The county’s funding for non-congregate shelter was supposed to end on Thursday, but due to the presence of a highly infectious variant of COVID-19, it is moving to extend the hotel program through Sept. 30. The county has secured a new hotel partner on the Far East Side and the county and its support services provider, Equitable Social Solutions, are offering guest assistance with moving to the new hotel shelter.

The city, meanwhile, is not pursuing different hotel rooms, but is continuing to provide support services through its contractor for about 30 people, including about a dozen still remaining at Madison Plaza as of midweek. The city recently extended Focus Counseling’s contract through June 30, 2023.

The hotel shelter initiatives have been successful, especially at getting services to the homeless and helping them secure housing, officials said.

Since its inception, more than 400 households have used the county’s non-congregate shelter program, and 257 people have secured housing, said Casey Becker, division administrator in the county’s Housing Access and Affordability Division. Since the third quarter of 2021, when Madison Plaza came into the program, 167 of the 257 have found housing, she said.  

“It’s worked out well,” Becker said. “For folks who haven’t moved into housing, they have been able to get connected to other community supports such as employment, behavioral health services or other medical care during their stay.”

The referral process for those seen as vulnerable to COVID-19 has been closed since the start of the year because the program was going to end, but the process for the isolation and quarantine program is still open to medical providers, shelter and street outreach providers who serve those needing the support.

To date, the county has spent $23.1 million on various non-congregate shelter efforts, Becker said. The estimate for extending the program through September is $3.1 million, she said. The County Board could take up the extension as soon as July 21. In the meantime, the county has funding to continue the program, she said. 

For the city, 65 people have used rooms at the hotel and 15 have exited to housing, community development director Jim O’Keefe said. Also, 12 people have left the city’s tiny shelters on the Southeast Side for housing and 10 people will be relocating from the hotel to the tiny shelters, he said. The city has spent $1.1 million in federal money for lodging, meals and support services at the hotel, and will use another $650,000 for continuing support services, security deposits and rental assistance, he said.

“When the city secured access, last fall, to rooms that were available at this (hotel) property, it was with the understanding that the arrangement would end on June 30,” O’Keefe said. 

“The people we supported through this temporary initiative, on the whole, faced very formidable challenges to stable housing,” he said. “The hotel setting, and on-site services, provided a safe and stable venue for them. They didn’t need to worry from one day to the next about where they would sleep or spend the day. And that created an opportunity for case managers to work with clients in ways that aren’t often easy, or even possible.”

The fate of the Madison Plaza has been evolving for months.

In October 2021, the city awarded $1.85 million from its Affordable Housing Fund to Gorman and Co. and Lutheran Social Services for a $23.4 million proposal to convert the hotel into housing with all 105 units to be created for those with lower incomes. The partners were expected to apply for federal tax credits administered by the Wisconsin Housing and Economic Development Authority.

But Gorman entered an agreement to purchase the property without knowing the hotel would be used as temporary shelter for the homeless after closing and under its ownership. Gorman, uncomfortable making an acquisition under such circumstances — especially because its backup plan if it didn’t receive WHEDA tax credits was to upgrade and use the property as a commercial hotel — declined the city’s $1.85 million award and stepped away from an agreement to purchase the property.

This spring, Repvblik of Okemos, Michigan, proposed to convert the hotel rooms into “workforce housing.” Repvblik honored a commitment with the previous owner to allow the hotel to be used for shelter through June 30.

“With the city’s rent hikes outpacing wage increases, housing affordability is under greater stress than ever,” said Morgan Van Riper-Rose, Repvblik’s director of investor relations. “The building makes a great candidate for conversion from a physical standpoint and, additionally, is part of the recently approved Greater East Towne Area Plan.”

Generally speaking, Repvblik builds workforce housing for those making 60% to 120% of area median income, Riper-Rose said. In Dane County, a household of two making 60% of median income would earn $55,380.

Once renovated, the project would offer many resident amenities, including laundry, fitness center, lounge and game room, storage, secure bike storage, indoor rec room, courtyard, co-working spaces and meeting rooms.

Repvblik has had preliminary meetings with city staff and the Urban Design Commission and will be submitting an application for a conditional use permit next month, Riper-Rose said.

“One of the neat things about using a hotel space for housing is that there will be a lot of hotel space like the banquet rooms that can be converted into resident amenities, so I’m hopeful that residents in this converted building will get access to things that might not be in other, custom-built buildings that cater to mostly one-bedroom and studios,” said Ald. Erik Paulson, 3rd District, who represents the site.

If permits are secured, Repvblik intends to begin construction early this fall.