A plan for 113 permanent supportive housing units at the former Ramada Inn drew criticism at Tuesday’s Housing and Community Development Committee meeting.
A new California developer hopes to do what another California developer failed to do over a three-year span: convert the run-down hotel into housing for the city’s unhoused population and veterans.
But committee members questioned whether the new proposal from Friendship For Affordable Housing (FFAH), a for-profit firm based in Los Angeles, could be successful.
Council member Antanette Mosley asked several times during the meeting whether FFAH plans to go ahead, even if the community opposes the plans.
FFAH Director of Acquisitions Callum Davidson said the group intended to move forward, even if the community voices concerns.
“We will move forward, and we will continue to work with those groups even if they say ‘no.’ Because the fact is it's not the first time an affordable housing complex has faced backlash. It's pretty standard,” he said.
FFAH Principal and former Shangri-La co-owner Ayahlushim Getachew echoed Davidson’s stance.
“There is always a lot of reluctance in communities with regards to this type of housing. And so the only way that we can prove that this is something that can be additive and also meet the needs that are necessary is to have proof of concept,” she said.
“So until we open, there's really not much that people will believe. But we're committed to the ongoing community engagement.”
Davidson and Getachew are two of several FFAH employees who previously worked for Shangri-La, the developer who lost the building to foreclosure after failing to deliver on their promises of renovation.
FFAH has a history of working in partnership with Shangri-La and Step Up, including a recent 53-unit renovation project in California. FFAH did not respond to requests for comment before publication.
The new FFAH proposal, unveiled in June, included a $1.5 million funding request from the City of Asheville for Homeward Bound, an Asheville organization, to provide supportive services for the completed project.
The money, which would come from federal American Recovery Plan Act funds, is the same amount city council previously allocated to supportive services for the first failed project.
But community members and leaders disagree on whether to support the proposal moving forward.
Continuum of Care has a mixed reaction
This summer, the Asheville-Buncombe Continuum of Care, the region’s homelessness planning body, was charged with vetting the project on behalf of the City of Asheville.
The Continuum’s seven-member funding committee unanimously voted against supporting city funding for the project, citing concerns around the development’s business model, project management, lack of community engagement and the site’s security plan.
The Continuum's meeting was not recorded. According to the city’s Homeless Strategy Division Manager Emily Ball, the Continuum of Care is “self-governing,” meaning the board can decide whether or not to record meetings.
“As the CoC evolves that may shift, but for now that's the discussion they've had and is based on a desire for in-person participation from the Membership,” Ball wrote in an email to BPR.
Brian Methvin, CoC funding committee chair, offered a recap of the meeting to at the Housing and Community Development Committee. He called the proposal “a really big disappointment.”
“After 10 weeks of research, it breaks my heart to say it, but we made a recommendation to the CoC Board not to recommend that the city move forward with the contract,” he said. “We thought the economics on the project were extremely doubtful and there were uncertainties on the cost estimates like securities, utilities and property taxes.”
Methvin also cited concerns over property management of the site and an uncertainty over what would happen to the site should the developer have “extremely long periods of negative cash flow.”
Nonetheless, the CoC’s board ended up narrowly voicing its support for the project in a 7-6 vote.
“This is crazy,” council member Antanette Mosley said of the proposal, which bears similarities to the 2021 version that failed. “I just feel like I'm in a moment of déjà vu all over again.”
In 2021, Mosley was the lone council member to vote against the original Ramada Inn proposal from California developer Shangri-La and its non-profit partner, Step Up on Second. At the time, Mosley had “transparency concerns” about the project’s rushed timeline.
Another accelerated timeline?
Like the Shangri-La attempt, this iteration of the project also faces a rushed timeline.
FFAH is currently under contract with mortgage lender Stormfield Capital to purchase the Ramada Inn site, an FFAH representative said at Tuesday’s meeting.
The property – located at 148 River Ford Pkwy. in East Asheville – has been held by Stormfield Capital since last December. Its previous owner River Ford, LP – an entity held by Shangri-LA – lost the building to foreclosure after failing to repay a $6.3 million bridge loan to Stormfield.
FFAH was supposed to close on the $6.5 million property in July, according to Ari Majer, a principal of the company.
The firm extended its contract with Stormfield through September 20 to accommodate the city’s due diligence measures, Majer said in the meeting. The firm is currently paying a “per day fee” to the mortgage lender, Majer said, and will not be able to extend its contract beyond September.
FFAH will not complete purchase of the property without the $1.5 million in supportive services funding from the city, as well as the award of project-based vouchers from HUD, according to Majer.
Mosley recommended the city be “especially cautious,” given the “failure of Shangri-La” and that she has “grave concerns” about the project.
“I would rather wait and do it well, rather than rush into it,” she said. “I fear that we’re putting the very people that we’re seeking to assist, we’re putting them in greater harm’s way. And it’s really sad to me and really frustrating to me. And I don’t understand why we have to move forward so immediately.”
Mosley’s chief concerns centered around the property management and security plan of the site, along with a lack of community engagement.
In its initial business model, FFAH estimated $140,000 annually for security. By Methvin’s projections, adequate security would cost closer to $460,000. FFAH also misprojected the cost of property taxes, budgeting $90,000 annually when it would actually cost closer to $170,000, Methvin said. Both of these budget changes would “push them in the red,” according to Methvin.
FFAH also did not engage in any community engagement until the CoC recommended doing so.
Last week, FFAH shared that Over-Brook would replace local nonprofit Homeward Bound to handle property management on the site. The last-second nature of the decision meant CoC didn’t have time to properly vet the company, according to Methvin.
“I would like a little background on Over-Brook management if we have some,” Turner said. “If I can look at some other project they've done or some kind of anything, a narrative. I have nothing.”
Over-Brook, LLC formed in July 2023, according to the NC Secretary of State website. The two listed company officials, Marty D. Holbrook and Anthony Brandon Overbay, were vice-presidents of Landura Management Associates.
Methvin said the two are still listed on their prior employer’s website and their new Over-brook site lists the same clients as Landura. He said more due diligence on the company is needed.
Council to vote on September 10
Davidson said he "appreciates the due diligence" the committee has conducted on the proposal and that Friendship is working to address those concerns.
"A financial model is a financial model, right it is not set in stone," he said. "We are able to change it. We do have the power to change it."
Despite her concerns on the project, Turner said she hasn’t given up on the project.
“We desperately need permanent supportive housing in the community. I want to find a way to get this project to move forward, but I'm not comfortable with it having so many issues around it,” she said.
Kim Roney, the third council member assigned to the committee, was not present at Tuesday’s meeting. Asheville City Council is expected to vote on the issue at its September 10 meeting.
