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Denver Funds Purchase of Two Motels for Shelter, Future Affordability

Published on November 14, 2022

$983,456 in ARPA funding approved for acquisition of The Westerner and Sand & Sage motels

The Department of Housing Stability’s strategy of leveraging motel properties for homelessness emergency response and affordable housing took a significant step forward today with the acquisition of two motels on East Colfax.

Denver City Council today approved a $983,456 contract with The Fax Partnership (The Fax), to help support its recent acquisition of The Westerner and Sand & Sage motels located at 8405 and 8415 E. Colfax Ave. Funded by the American Rescue Plan Act (ARPA), the contract helps The Fax provide temporary shelter space for families experiencing homelessness and a site for future affordable redevelopment in the East Colfax community.

“Motel acquisitions offer a key resource for sheltering our unhoused neighbors, and for long-term development to create more affordable housing for our hard-working residents,” said Mayor Michael B. Hancock. “I applaud The Fax for making this acquisition possible. This project is an ideal investment for our American Rescue Plan Act funds and will further our work to improve affordability in communities who need it most.”

“The Fax Partnership’s mission is to strengthen and support East Colfax while advocating for equitable development. With this acquisition, our organization fulfills its mission to both support those who are in the community now and ensure future redevelopment is affordable so our residents stay here,” said Monica Martinez, Executive Director of The Fax.

Beginning in fall 2023, the motels will be leased to Volunteers of America of Colorado (VOAC) and will provide family homeless shelter while the VOAC Family Motel on West Colfax undergoes reconstruction thanks to the voter-approved RISE Denver bond program. The East Colfax properties will have approximately 36 units following moderate rehabilitation, all with microwaves, refrigerators and spacious rooms.

“We are so grateful that this partnership with The Fax will enable us to continue uninterrupted service to our most vulnerable neighbors as we redevelop and create a new, trauma-informed designed Theodora Family Motel, so that we can provide our residents with healthy relationships, connection and the opportunity for life-transformation,” said David Schunk, President and CEO of Volunteers of America of Colorado.

Following VOAC’s use of the properties, The Fax plans to continue to operate the properties as shelters until the summer of 2028 when redevelopment can begin. At that time, The Fax will redevelop the 33,200 square foot parcels into new construction affordable housing with community-serving ground floor uses.

The Fax utilized several nonprofit and public financing sources to acquire the properties in September 2022. The new contract with Denver’s Department of Housing Stability enables The Fax to lower project debt and ensures the site will provide shelter and/or housing for at least 60 years.

The East Colfax acquisitions are the latest examples of how HOST is investing in hotel/motel properties to support homelessness resolution and affordability. Other examples include:

HOST provided $5 million in ARPA funding to support the Colorado Coalition for the Homeless’ acquisition of a former La Quinta Inn to continue providing shelter and future redevelopment into approximately 200 units of supportive housing.
HOST is receiving $2 million in special federal funding to assist with acquiring the Stay Inn, 12033 E 38th Ave., for conversion into supportive housing.
Supportive services funding is provided for the Fusion Studios, a former hotel property that now provides 139 affordable studio apartments to house individuals transitioning from homelessness.
HOST has a services contract in place supporting the Volunteers of America Family Motel, which serves families experiencing homelessness and veterans and individuals recovering from medical procedures. The property is slated for reconstruction utilizing RISE Denver bond program funding.
Denver is currently leasing the downtown Aloft hotel to provide COVID-19 protective action non-congregate shelter.
Denver has a lease agreement in place with the Denver Housing Authority to operate a former hotel in northwest Denver as non-congregate shelter.
HOST contracts with U.S. Motels Denver North, Inc., to provide short term shelter for individuals and families at two north Denver motels.

Denver’s plan for recovery includes direct distribution of $308 million in ARPA Local Relief Funds. Denver solicited and received feedback from over 12,000 residents, Denver City Council, city agencies, the Mayor’s Stimulus Advisory Committee, and the Mayor’s Economic Recovery Council to inform the use of the city’s first round of ARPA funds. Federal law requires distribution of the funds by 2026.