The context
The potential lease of The Salvation Army's downtown shelter comes months after the surprise announcement that the facility would close.
The Salvation Army leadership said in mid-February that the 100-bed homeless shelter at 501 E. Eighth St. would be shuttered. The move sparked disappointment and concern in the local homeless service community and city government given the pressing need for shelter beds and the lack of any similar facilities serving downtown Austin.
In response to the impending closure and displacement of dozens of shelter residents, the city's Homeless Strategy Division said in March that Austin would spend $100,000 for an additional 30 days of service there to allow remaining clients to find new places to stay.
In a May 10 blog post, The Salvation Army stated that its leaders had approved the potential sale of the Eighth Street property to be handled by the commercial real estate firm CBRE. The post also shared plans for "thoughtfully reinvesting" any funds from the sale downtown, possibly to buy or build a new facility.
The shelter and an adjacent parking site owned by the organization were appraised at a combined $13.81 million as of 2022.
The specifics
On June 8, City Council could approve a one-year lease deal with The Salvation Army including 12 months of base rent for $600,000 and 12 months of operating costs for $668,256. If approved, the lease would begin July 1.
Additionally, officials will vote to spend $4.56 million to extend ARCH operations into The Salvation Army facility as well as $600,000 for the nonprofit Urban Alchemy to keep up its current work at the ARCH through the end of the year.
According to council's agenda materials, city staff recommended the leasing plan to "avoid major disruptions in service" for the homeless population downtown given that no other civic properties in the area can serve as a shelter. While The Salvation Army lease is projected at $1.27 million, the agenda document only stated that $422,752 from Austin Public Health is available.
With those items still pending council approval, the city's Homeless Strategy Division did not respond to questions about the funding difference, expected shelter capacity, how clients would be selected or the outlook for the facility after one year.
In a statement, a city spokesperson said Austin is pursuing the lease as part of a new strategy to boost homeless shelter and housing capacity.
"The temporary shelter would be operated by a nonprofit service provider (not The Salvation Army) and client services, eligibility criteria and other details have not yet been finalized," the spokesperson said. "This is an upcoming city of Austin council agenda item, and more information will be available upon the conclusion of the council’s decision and once the agreement is finalized."
Peter Jansen, executive vice president at CBRE, said the lease represents a "win/win" for his client The Salvation Army and Austin as the downtown property sale progresses.
"The city's lease of the property was anticipated prior to the sales process—we believe it will be accretive to the sales process and The Salvation Army has not had a change of plans," Jansen said in an email. "We believe this will enhance the buyer pool as any redevelopment process will take fair amount of design and permitting time—this lease provides a win/win for the community as it likely enhances proceeds to the Army and continues services in the interim to those in need. We appreciate the city's vision and support of the community in this manner."
Zooming in
The 130-bed ARCH's proposed service expansion using The Salvation Army space would come almost one year after that shelter experienced an abrupt management change.
Last summer, city homeless strategy staff rushed to find a new operator for the ARCH after previous provider Front Steps bowed out on short notice. California-based Urban Alchemy was chosen as the ARCH's new manager despite concerns about the nonprofit's history and ability to take over the facility.
Since then, however, the city has reported that Urban Alchemy has taken on a successful turnaround of the center. Results under the shelter's new management were also praised by the Downtown Austin Alliance.
Also on the agenda
In addition to items concerning the downtown facilities, council may also approve up to $2.76 million for other homeless services June 8. Relevant funding items include:
- $2.4 million from Austin's federal American Rescue Plan Act allocation for Family Endeavors and Foundation Communities to offer "homelessness prevention services" such as case management; rental, housing and utility assistance; financial services and job support over one year
- Up to $360,958 from ARPA and city funds for Integral Care to continue providing behavioral health services for clients at the city-owned Northbridge homeless shelter off I-35
