Proposed east Spokane homeless shelter faces questions with service providers, funding sustainability

While the city administration has a recommendation for who should operate a proposed homeless shelter on East Trent Avenue, exactly how the facility’s residents would receive key services – like mental health and drug abuse resources – is less clear.

City Administrator Johnnie Perkins and Eric Finch, interim director of Neighborhood, Housing and Human Services, walked members of the Spokane City Council through a presentation Monday detailing what might be the next steps to make the homeless shelter at the 4320 E. Trent Ave. warehouse a reality.

The 24/7 facility proposed by Mayor Nadine Woodward’s administration would have an estimated daily use of 150 to 250 beds with surge capacity and the ability to serve for emergency uses, such as a heating/cooling shelter or a clean air center.

City council members looked over the potential costs involved with running the facility and leasing the East Trent Avenue property during Monday’s Public Safety and Community Health Committee meeting. The approximately 33,000-square-foot building is owned by developer Larry Stone through an LLC, Lawrence B. Stone Properties No. 4320.

The council is expected to consider legislation to move the process forward later this month.

Perkins said a review committee that vetted proposals from potential facility operators recommended the Guardians Foundation, which operates the city’s Cannon Street Shelter at 527 S. Cannon St., as the operator of the East Trent Avenue facility.

The Guardians Foundation and the Salvation Army were the only two agencies to submit proposals to operate the facility. Both made it through a pass/fail evaluation by the city’s procurement department before being vetted by a review committee, Finch said.

The city also sought proposals from agencies to provide a suite of wraparound services, such as case management and access to resources like mental health, substance abuse treatment, job training, housing assistance and family reunification.

Two out of three other proposals from potential service providers were rejected during the pass/fail evaluation. According to Monday’s presentation, the application from homeless service provider Jewels Helping Hands was to provide services at a different location, while an application from InMotion Imaging only offered medical care, not the full suite of desired services.

That left one proposal from the Salvation Army.

“On the services side, it was a little bit more of a challenge because we only had one that kind of went met the pass/fail criteria and was not covering the entire scope of the services that were offered,” Finch said. “They could not come to make a recommendation for the wraparound, full services provider.”

Finch proposed a mix of options that could possibly address the services shortfall, such as working with existing services providers to provide certain services on-site, whether it’s through contract extensions or a pay-per-service model. At the moment, the city doesn’t have existing contracts with providers for most of the services sought with the proposal.

Finch said the city also plans to release another request for proposals to contract multiple different service providers to each provide a specialty service rather than one agency trying to accommodate the complete suite.

“They can provide for one and do it well, so I think that’s the direction we’re going in,” Finch said.

Site and operations plans were not included as part of Monday’s presentation, as council documents those would be forthcoming.

Financially, the city estimated the facility’s operation would cost around $3.7 million per year, which officials have proposed to cover using a mix of city funds, including those through the criminal justice fund, and federal American Rescue Plan Act (ARPA) funding.

Finch said the city has the budget capability to cover the facility’s cost for the rest of the current fiscal year as well as next year. The following years, however, are a bit more of a question mark Finch proposed talking through at a later council meeting.

“We see getting through 2023 with the expanded level of services – not just this shelter … without cutting in other areas or other beds or shelters that we have,” he said, “but then it becomes more of a challenge after ARPA and after the criminal justice fund is exhausted.”

The city would also be responsible for leasing the building at $26,100 per month, or $313,000 per year. The rental cost of the five-year lease, including cost adjustments based on the Consumer Price Index, is proposed at around $1.6 million with an option for another five years, Perkins said.

With everything including the $1.6 million rental cost, taxes, a lease management fee and estimated utilities expenses, city officials estimated the five-year cost of the deal at around $2.56 million.

The lease also includes an early termination clause requiring a year’s payment in rent if the contract is ended prior to the five-year mark.

Part of the deal includes several improvements to the warehouse to make it amenable to serving as a shelter, such as the addition of smoke and carbon monoxide detectors, the construction of temporary walls to separate residents and exterior lighting upgrades. Approximately $550,000 in tenant improvements, as Perkins and the city have described them, would be covered by the landlord and, as identified in the lease agreement, the nonprofit Innovia Foundation.

Perkins said changes to the property will include the construction of a cement wall, with no barbed wire, on the south and east sides of the property to “allow for more safety” for the residents as well as the surrounding businesses.

With this proposal on the table, Stone has another offer that has pitched to lease the warehouse as-is for the same monthly rent rate negotiated with the city, Perkins said.

“Commercial property is hot right now,” Perkins said, “and people want that building.”