Hotel for L.A.’s homelessness fight will cost $83 million

Mayor Karen Bass’ plan to purchase a 15-story hotel in L.A.’s Westlake neighborhood and use it to house homeless Angelenos will likely cost the city more than $83 million, once renovations are included, according to a report issued this week.

Under the proposal, the city would buy the hotel from Mayfair Lofts for $60 million, then carry out an estimated $19 million in renovations. An additional $4 million would go toward project oversight, consulting fees, closing costs and other upgrades, according to the report, which was issued Thursday by the city’s General Services Department, which leases and maintains many city properties.

Bass and her homelessness team have spent months working on the acquisition of the Mayfair, a 294-room facility just west of downtown, so that it can be used for her Inside Safe initiative as city-owned interim housing. Since December, Inside Safe has been moving unhoused Angelenos off the street and into hotels, motels and other facilities — with permanent housing being the ultimate goal.

Once the renovation of the Mayfair is finished, city agencies would probably move in some residents from the L.A. Grand, a downtown hotel being used for Inside Safe, as well as unhoused residents of Skid Row, according to the proposal. City officials are hoping to have the Mayfair open by Feb. 1, when the lease with the L.A. Grand expires.

In recent months, Bass’ team has struggled to find enough rooms to continue expanding the program. Tony Royster, who heads the general services department, said in his report that acquiring the Mayfair would help the city create “a permanent infrastructure of available beds that can transition individuals from encampments to safe interim housing with wrap-around services.”

The mayor’s team is also hoping that the Mayfair can be used to scale back some of the day-to-day leasing costs of Inside Safe. The L.A. Grand, for example, has been charging the city $154 per night per room, including meals. That translates into more than $56,000 per room per year in cases where a room has a single occupant.

“We have … known since the beginning that the per night costs of renting hotel rooms would be unsustainable, and that the city would need to build out its own reliable interim housing infrastructure to bring down costs,” Bass said in a statement.

The proposed Mayfair purchase is up for review Monday by the city’s Municipal Facilities Committee — a three-member panel made up of the mayor, City Administrative Officer Matt Szabo and Chief Legislative Analyst Sharon Tso. A portion of that meeting will be held in closed session because it involves purchase negotiations.

An aide to Bass said the hotel does not “require any seismic updates.” The city’s research on the building’s condition will remain confidential until the sale is finalized, the aide said.

Any purchase of the Mayfair would require a vote of the City Council.

Since Inside Safe began seven months ago, the city has entered into rental agreements with 38 hotels and motels, generating invoices for more than 57,533 room nights, according to a report examining expenditures through July 14. The program’s interim housing stock is just over 1,100 rooms, the report said.

Under the proposal, Mayfair residents would have access to on-site services focusing on mental health, addiction, life skills, job applications and the search for permanent housing. Participants would receive laundry services and three daily meals, the report said.

Councilmember Eunisses Hernandez, who represents the neighborhood where the Mayfair is located, has not yet taken a position on whether she supports or opposes the purchase. Although she and her team have reviewed the report, Hernandez wants more information, an aide said.

“At this time, we are awaiting additional details regarding the project and its potential outcomes, particularly as they relate to our unhoused [district] residents,” said Hernandez spokesperson Chelsea Lucktenberg. “The council member’s core priority is bringing units online that will offer long-term, dignified solutions to our homelessness crisis.”

If the council signs off on the Mayfair deal, the cost of Bass’ Inside Safe program would probably jump from $250 million to well over $300 million for the current budget year, which began July 1.

The Inside Safe budget already includes $110 million for hotel and motel rental costs and $47 million for the acquisition of several smaller motels.

The Mayfair received a major renovation in 2018, reopening as an upscale venue. Two years later, the hotel was shut down because of COVID-19.

Then-Mayor Eric Garcetti’s office reached an agreement with the Mayfair to participate in Project Roomkey, a federally funded program that converted hotels into temporary housing for the city’s homeless population. The Mayfair ended its participation in the program in July 2022, after two years as a Project Roomkey site.

In the months after it closed, the property’s owner, Mayfair Lofts, sought reimbursement for what it said was damage to the building and its furnishings. A representative for that company did not respond to a call seeking comment.

The Mayfair renovation could include repair or replacement of damaged furniture, repairs to damaged bathroom fixtures, replacement of light fixtures, patching of drywall, painting of walls and possibly installation of a new room entry system.

Because the city is the buyer, the purchase of the Mayfair will not be subject to transfer taxes, including those required under ULA, a voter-approved tax on transactions of more than $5 million, according to the report.