Owner pulls out of talk with city, which offered to buy the low-barrier, low-cost hotel as long as tenants could stay
*This article was updated March 24, 2016, with additional details, including comments from representatives of Precision Property Management Corp. and Central City Concern.
An atrocity.
That’s what David Tacke calls the closure of the Joyce Hotel and the eviction of its low-income tenants.
Tacke is president of the hotel’s management company, Precision Property Management Corp., or PPM, which had been working with the city and the building’s owner to preserve the housing for nearly 100 of Portland’s poorest residents.
Those efforts collapsed this week after the owner of the building, Dan Zilka of DZ Real Estate, pulled out of the negotiations. Residents were told they have until March 31 to vacate the building. Tacke’s frustration is directed at the building’s owner, who, after weeks of talks with the city, now appears intent on selling it to another party.
“To wait until the last minute is unconscionable to me,” Tacke said, noting the impact on the tenants. “They probably now are not going to be able to place everyone, and with time, they probably could have.”
FROM OUR ARCHIVES: The end of the Joyce Hotel: Where will the homeless go?
The Portland Housing Bureau had proposed buying the building from Zilka for approximately $5 million, transitioning management to a local social service provider, and preventing the loss of the low-income units. That offer was only good provided the tenants remained in the hotel.
“Our interest in the building was humanitarian,” said Kurt Creager, director of the Portland Housing Bureau. “We were interested in the building being occupied, while the owner has been increasingly recalcitrant about keeping tenants in place.”
On Dec. 31, PPM told residents they had until March 31 to vacate the premises because the hotel was permanently closing. PPM has managed the hotel for decades but was informed in December that its lease with owners DZ Real Estate had been terminated.
The hotel, located at Southwest 11th Avenue and Stark Street, is one of the last of its kind in Portland’s increasingly trendy West End. It is the only one in the city’s central core that allows the flexibility of week-to-week rental, rather than month to month.
Reached by phone, the owner of the building, Dan Zilka with DZ Real Estate, has repeatedly refused to talk to Street Roots.
DZ’s lawyer, Sia Rezvani, told the city in an email dated Monday, March 21, that while they recognize the city’s effort to keep the occupants in the Joyce, the owner was not willing to budge on evicting the hotel business and its management company, PPM, from the building.
“Based on a variety of factors and after much consideration DZ Real Estate has decided that the obstacles posed by both the city and PPM’s proposals outweigh the potential benefits to DZ,” Rezvani stated in the email.
Rezvani said in another email that there are other offers from potential buyers that Zilka is considering.
Central City Concern, which provides a range of programs for people experiencing homelessness, has also been a part of the negotiations. Creager said the Portland Housing Bureau had hoped to buy the building and bring Central City Concern in as new managers with a greater emphasis on support services and graduating tenants into permanent housing.
The city could have taken possession of the building as soon as April, Creager said, with PPM still in place while CCC prepared to take over management later this summer.
With the collapse of negotiations, Central City Concern has been going door to door and set up a station in the lobby to assess the housing and care needs of the approximately 55 people who still call the hotel their home.
“Basically this week was working with the city to try to save the Joyce as a housing option, and that was where all our energy was focused,” said Sean Hubert, chief housing employment officer with CCC. “And now we have to scramble with plan B.”
Hubert said CCC will be working with other social services to keep residents from becoming homeless when the doors finally close.
To help in that effort, Creager said, the city can tap into nearly $1 million in short-term rental assistance to tenants in need.
What the future holds for the tenants now is a case-by-case matter.
One tenant, who did not want his name used, spoke of hearing of possible extensions for staying in the Joyce until mid-April, while another said there was a 72-hour eviction notice for one tenant behind on payments.
The relationship between PPM and DZ Real Estate has been on rocky ground for several years. Tacke said that PPM and DZ Real Estate had been negotiating to secure a long-term lease for more than 2½ years, only to find out that DZ was also working to sell the building and evict PPM and all the tenants. In June 2015, PPM filed a legal complaint against DZ for an implied lease fraud and bad faith, among other claims, for stringing them along while pursuing the sale.
That case was settled earlier this month. According to Tacke, DZ agreed to pay PPM a significant monetary sum for damages and costs. PPM agreed to delay collection of the settlement to allow for a sale or transfer of ownership. That settlement also stated that PPM would vacate the premises by April 30, 2016, and work to transition the operations to CCC and sell the building to the Portland Housing Bureau.
On Monday, March 21, Zilka terminated negotiations for the sale.
The Joyce was PPM’s only current operation in Portland. The company does own and operate multiple housing units in Longview, Wash. All of those facilities are at 100 percent capacity with a waiting list, Tacke said.
Tacke said had they been able to secure a long-term lease, they had intended to do improvements to the hotel, including installing an elevator, adding common kitchenettes to each floor, and various room upgrades. The four-story building currently has no elevator.
“We knew it would never be the Hilton,” Tacke said, “but we wanted it to be nice.”
Creager said the city did cost assessments for repairs and estimated it could take up to $12 million to get the building into proper condition, which could be drawn from the tax increment financing revenue from the South Blocks Urban Renewal Area.
Rooms at the Joyce started at $19 for a hostel bed and went up to $40 for a single room and $214 to rent for the week. Despite its being a hotel, some residents have lived there for many years as their primary dwelling.
Social service agencies, hospitals and the police have also relied on the Joyce when they needed an immediate, safe and temporary housing option for someone experiencing homelessness. It was one of the few places that didn’t flinch at a criminal record. The hotel’s staff had years of experience working with people who had experienced homelessness, mental health issues and other complications to housing.
When the Joyce’s likely closure was made public in January, it drew alarm from housing officials because of the loss in weekly, low-cost housing rates, often referred to as single-resident occupancy hotels, or SROs.
While the future of the building isn’t known at this time, it is unlikely to remain low-cost housing. As such, the city takes another hit on its “no net loss” policy, which has been losing ground since it was enacted in 2001. That policy aimed to preserve the city’s dwindling supply of housing for people making 60 percent of the median family income or below. At the time the policy was put into writing, the city counted 8,286 units in it’s inventory for lower-income residents. Last year, a report showed that number had dropped to less than 7,000.
Hubert called the situation one of two tragedies – the immediate housing loss for the residents and the larger loss to the community.
“This is a community resource that has been around for decades,” Hubert said. “It’s another setback on the no-net-loss policy and it’s unfortunate.”
The housing bureau’s Creager said the door remains open if the seller, DZ Real Estate, reconsiders its decision to abandon negotiations.
Since the eviction notice was posted at the start of the year, many residents have left, said the hotel’s front desk manager, Debby. Debby declined to give her last name and has since left PPM.
“It bothers me that people have moved out because of it, have worried because of it,” she said. “We had people check out over the weekend who were long-term residents. Maybe they can come back. I don’t know.”
Creager said there might be some assistance available to residents who left the hotel after the notice and before CCC’s visits this week. They are encouraged to contact the Portland Housing Bureau at 503-823-2375.
Joanne Zuhl is the managing editor of Street Roots.
