Royal Palm building’s closure presents housing quandary

From the Portland Tribune, October 18, 2017

Cascadia forced to board up rundown facility used for transitional services in Old Town/Chinatown.

The Royal Palm Hotel building at 310 N.W. Flanders St., in Old Town/Chinatown, has had many uses during its 104 years.

From being one of Portland’s first facilities to employ and accept African-American guests during and post-World War II, to offering a place of transitional housing for the homeless and mentally ill for the past 20 years, it often has been a haven for Portland’s most vulnerable populations.

But it will soon be boarded up, its closure coming at a particularly unfortunate time to lose shelter space, during the city’s ongoing housing state of emergency and push for more supportive housing.

The closure comes following Cascadia’s loss of a $700,000 grant from the U.S. Department of Housing and Urban Development last year. Cascadia, a Portland-based housing and mental health nonprofit, owns the building, while the Portland Housing Bureau has an underlying mortgage.

“There’s just all these dominos, and they’re falling the wrong way on this building,” said Jim Hlava, vice president of housing at Cascadia. “It’s an old building, it’s got a lot of issues, a lot of cost to fix it and no real clear path toward accessing dollars to fix it.”

Although not a particularly large chunk of money, the grant was keeping the operation afloat. HUD recently shifted funding favorability to permanent and supportive housing and away from transitional housing, which officials now are seeing as a less-effective model.

In operation as transitional housing since 1996, it offered 30 single-room occupancy units (SROs) and two dorms of 10 cots — spaces for 50 people altogether. All individuals staying there were found new placements by August, Hlava said.

The cots acted as a typical short-term shelter, while the SROs were transitional — meaning someone could live there for up to two years until they found a more stable living situation.

Cascadia owns or leases about 50 buildings in Portland, according to Hlava. Their target population is people with 30 percent or below median income, which is income of about $20,000 a year or less.

Offering rooms at a lower cost — rents are around $500 or less — poses some issues, too, since rent dollars help with upkeep of the building.

Hlava said Royal Palm’s transitional program was effective.

“The sad part of it is, it had great outcomes. People who got in, many people were on the street the day before,” he said. He said their goal was that at least 80 percent of the people who came through got housing, and that they “met and exceeded our contracted goals.”

Three-option scenario

The loss of the HUD grant was really the straw that broke the camel’s back, Hlava said. The building is also in bad shape.

Faced with a deteriorating building, including, according to Hlava, “a boiler in there that’s on its last leg and would probably cost around $60,000 to $80,000 to replace” — losing the HUD grant was simply more than the nonprofit could handle.

The building is not seismically retrofitted, meaning it would crumble quickly if an earthquake hit. Adding to the complexity is that it’s in a historic district, so any major upgrade of the building would mean keeping it aesthetically the same on the outside.

A year ago, the organization had met with the housing bureau to present a three-option scenario.

One included a short-term fix of the building, which tallied up to a $2 million to $4 million fix. Option No. 2 was keeping the configuration of the building and upgrading for a 20-year fix. That included a $6 million to $10 million price tag.

The third option, the most desirable yet most expensive, meant converting the building into an affordable housing model, versus the existing model — single-room occupancy, or SROs, where occupants are sharing bathrooms and kitchen space. Cascadia prefers units to be studios or one-bedroom units, so each space would have its own bathroom and small kitchen.

SROs often don’t promote independence and can provoke more conflict because people are relying on shared spaces, Hlava said.

Converting the building into that model came with a $13 million price tag. The city wanted Cascadia to preserve it, so they worked to apply for funding through Oregon Housing and Community Services. They wanted to add two floors to the building.

They’re boarding it up, for now, so they don’t have to spend $10,000 a month to keep it operating even when no one is staying there. However, after 60 days of no occupants, insurance expenses will increase, Hlava said, because there are risks with a big, vacant building. One risk is that as winter approaches, homeless people likely will seek out shelter in the city’s vacant buildings. Earlier this year, a fire broke out at a nearby empty firehouse owned by the city, where homeless people were reportedly seen running out.

Hope for Royal Palm?

While Hlava thinks the building is in serious disrepair, Housing Bureau Director Kurt Creager, after a recent tour of the building, thinks otherwise.

“I’m hopeful frankly. I was impressed by the overall condition of it. It’s able to be reoccupied fairly easily,” Creager said.

The bureau is eyeing to keep it open over the winter. Last winter, four homeless people died of hypothermia sleeping on the streets.

He said it will cost under $2 million to fix basic, “short-term” health and safety needs, and potentially another $2 million for some seismic reinforcement and maintenance of an elevator.

“We’ve met with them (Cascadia), and we’re putting together a plan with the Joint Office (of Homeless Services) to get the building reoccupied as soon as possible,” Creager said, adding that it was a priority to reopen it ahead of winter.

The city just approved framework for a $258 million affordable housing bond. Creager said, however, that although it would be technically legal to use it for Royal Palm, framework discourages from spending money in urban renewal areas.

The Old Town Chinatown Community Association has been at odds with the city for decades for its concentration of homeless services in that neighborhood, and strongly opposes the proposed shelter at Northwest Hoyt, which is at the moment a large vacant warehouse. Business owners there say the services attract too many homeless people to the neighborhood, which then detracts from tourism and business.

It’s unclear how reopening of the Royal Palm for the winter would sit with the association. The two operated under a Good Neighborhood Agreement from the 1990s, when then-called Mental Health Services-West was met with resistance from the association because of planned development of the Lan Su Chinese Garden, which sits directly across the street. Mt. Hood Community Mental Health, Network Behavioral HealthCare Inc. and Mental Health Services-West merged into Cascadia Behavioral Health in 2002.

The association chair, Helen Ying, has still been trying to sort out communications with the city on the Hoyt Shelter.

“There’s so many things going on right now that’s still on the list,” she said.

As for a long-term site for affordable housing, Hlava isn’t sure if the old hotel the best place — especially at a $13 million price tag for a full renovation.

“Is that the right place to spend $13 million, versus, you know, you might be able to get two sites for that $13 million. I think I would love to see that at Royal Palm, but I’m not sure if it’s the best expenditure of public dollars,” Hlava said. “I think it’s a complicated decision for the city to have to wrestle with and I appreciate they’re wrestling that, and trying to determine where it’ll go.”