A new CA-based company is under contract to buy the Ramada for homeless housing: Now what?

ASHEVILLE - There is a new proposal on the table for the former Ramada Inn in East Asheville from yet another Los Angeles-based developer. Friendship for Affordable Housing plans to transform the property into 113 units of housing for the city's chronically homeless.

The for-profit affordable housing developer has a purchase and sale agreement executed with the property's current owner. In a 77-page pitch, presented to the Asheville and Buncombe County Continuum of Care board June 20, FFAH laid out a plan in which it would act as lead developer and capital partner, and Homeward Bound, an Asheville nonprofit, would provide supportive services and manage the property.

Also, among its partners would be veterans service provider HUD-VASH, a program that pairs HUD’s Housing Choice Voucher rental assistance with VA case management and supportive services for homeless veterans.

If the story sounds familiar, it is. Three years ago, the city was under contract to purchase the two parcels, located at 148 and 150 River Ford Parkway, before abandoning plans in December 2021. It authorized the assignment of its contract to California-based for-profit developer Shangri-La Industries, which announced it would convert the property into 113 units of permanent supportive housing.

After months of delays, Shangri-La left town, leaving behind a slew of litigation and broken promises and facing further legal trouble in California, where the company is being sued by the state, as well as numerous lenders and contractors over unpaid bills, according to reporting from the Ventura County Star. It lost the property to foreclosure in December 2023 to lender Stormfield Capital.

Who is FFAH?

FFAH principal Ayahlushim Getachew assured the Citizen Times in an interview June 20 that this project would be different.

"We're internally capitalized," she said. "We don't need money to do the rehabilitation, we don't need money to manage the program itself, we don't need money for the acquisition. There is not going to be a loan on the property when we acquire it."

Getachew was president and co-owner of Shangri-La Construction, a subsidiary of Shangri-La Industries, until 2019. She was with the company for three years. She said Shangri-La Industries' then-owner and CEO Andy Meyers wholly bought out her interests in 2019.

"Everything was fine while I was there. It was well run. And then in 2019 I asked them to buy me out, and my interests, because I was moving on, and they did," she told the Citizen Times June 21.

FFAH was formed in 2019. They had previously contracted with Shangri-La on several projects, but none are caught up in the ongoing litigation, she said.

Getachew said they are also pursuing former Shangri-La projects in Chattanooga and Denver.

Over the last several months, FFAH has brought on three former Shangri-La employees, some of whom had experience with the Ramada project.

“We’re a totally new company, they needed jobs when the company basically collapsed," she said. "They had some very good staff people ... I didn't think that they should be penalized for the fact that, you know, there were stewards at the head of the other company that didn't do well by their team."

FFAH has delivered 375 units of permanent supportive housing since its inception, according to the proposal. All six of FFAH's prior projects were based in Los Angeles. There are four more in the pipeline.

"It's not like coming in and responding to a (request for proposals) from scratch. A lot of these cities feel the burn from having put all of their trust in Shangri-La, so we're having to prove ourselves, which is fine. We're happy to do that ... our references are stellar. And our work is stellar," Getachew said.

References in the proposal include the Director of Development and Finance for the Los Angeles Housing Department and other project collaborators over the last several years.

The former Ramada Inn parcel is deed restricted for permanent supportive housing for the next 50 years. Getashew said the purchase price for the property is $6.6 million.

$1.5M ask from the city

Getachew said the project is contingent on $1.5 million in funding from the city of Asheville to provide the first three years of the project's supportive services through Homeward Bound.

The city originally committed these dollars to Step Up, the California nonprofit that partnered with Shangri-La to oversee supportive services and property management, but as the project stalled, the funds were never spent.

FFAH is also seeking 100 HUD project-based vouchers for rental subsidies.

The CoC, a collaborative planning body that works to oversee a coordinated response to area homelessness, will meet again in the next several weeks to vet the proposal and make a recommendation to City Council. After a stop at the city's July 16 Housing and Committee Development Committee, the funding request will go to council for a vote July 23.

Mayor Esther Manheimer said as the Ramada Inn is a private property, and FFAH is a private buyer, the $1.5 million for supportive services is the only "leverage point" the city has for the project. She is a non-voting liaison on the CoC board.

“Given where we are today, (council) is going to want to make sure every rock has been turned over and everything has been explored," she said during the meeting.

Capacity?

FFAH Principal Ari Majer said what set this project apart from "other iterations" at the Ramada is its partnership with locally based service providers.

“When we come into a city to do a project, we want to get as much local presence as possible,” he said.

Homeward Bound, which would provide services and manage the property, opened its own 85-unit permanent supportive housing project in East Asheville in September.

Jenny Moffatt, housing services director with Homeward Bound, which oversees its supportive services program, fielded questions June 20, along with the other partners, about their capacity to do the project.

Moffatt said both she and Homeward Bound's permanent supportive housing program are ready to take it on.

“We have a crisis in our community with our chronically homeless residents and this is how we are going to end homelessness for those folks is to invest our time and resources into more projects like this," she said. "We are absolutely 100% on board."

It was a "resounding yes" from Jerry Kivvett-Kimbro, the Asheville-based HUD-VASH supervisor.

There is a "desperate need," Kivvett-Kimbro said. More units of this housing type would be "life-changing" for veterans experiencing homelessness in WNC, he said.

Permanent supportive housing is a housing model that targets chronically homeless individuals, offering long-term housing with wraparound services. "Chronically homeless" is a U.S. Department of Housing and Urban Development definition that describes people who have experienced homelessness for at least a year, or repeatedly, while struggling with a disabling condition such as a serious mental illness, substance use disorder or physical disability.

“We believe very strongly in what we are doing,” Getachew told board members. “We are socially responsible and we do this because we care about making a difference. We come from a place where we are overrun with this problem … We’re trying to provide a response, a long term solution.

If the project moves forward, Majer said they are committed to "doing it fast."

With design and demolition already complete, the proposal included a tentative construction start of August 2024, to be leased up by July 2025.

More: Bankruptcy thrown out for company that planned to develop Thousand Oaks homeless housing

More: Will East Asheville's Ramada remain housing for homeless after foreclosure?

Sarah Honosky is the city government reporter for the Asheville Citizen Times, part of the USA TODAY Network. News Tips? Email shonosky@citizentimes.com or message on Twitter at @slhonosky. Please support local, daily journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Asheville, Buncombe homelessness board hears new Ramada Inn proposal