Report warned of faulty roof at homeless shelter
One weekend last November, a group of parents and kids were hanging out in the parking lot of the Human Solutions Family Center, talking about an incident that woke them up abruptly that morning.
"The ceiling fell in," said Joe Tomasso, who was staying at the shelter with his girlfriend and her three kids. "Possibly from the water. Definitely from the water. It was a small spot. It wasn't like the whole roof."
Families at the shelter, which is run by the nonprofit Human Solutions on behalf of Multnomah County, said the roof had been leaking for some time. County records show a portion of it failed due to a leak in October 2016, causing a 2-by-3 foot section of drywall to fall. Two months after that, Human Solutions reported that insulation came down after a leak and as they tried to treat mildew caused by water intrusion.
In the two years of the shelter's operation, Human Solutions estimates it spent $40,000 hiring contractors to patch the leaks. That's the equivalent of eight months' worth of mortgage payments on the building at Southeast 160th Avenue and Stark Street.
This winter, as pieces of drywall continued to soak through and fall despite efforts to patch the holes, Human Solutions spent $13,000 on a big blue tarp to cover the whole roof.
Then, on Feb. 7, the roof troubles led county leaders to evacuate 110 parents and children from the shelter into motels.
"Yesterday I learned that the roof at one of our homeless family shelters was failing," Multnomah County Chair Deborah Kafoury said the next day. "I took immediate action, pulling together resources from across the county to make sure that families had a safe place to sleep last night."
But records show that the faulty roof should have been apparent to county and nonprofit leaders when they made the deal to buy the shelter building. Instead, county leaders allocated $700,000 to help Human Solutions acquire and remodel a 40-year-old building that had been home to a vegan strip club, without reviewing an independent building inspection that said the roof should have been replaced.
Ripe for redevelopment
In August 2015, Human Solutions had approached the county about a new potential shelter at the former Black Cauldron strip club in East Portland.
It was a big building with the right zoning, and neighbors supported the idea of siting a shelter there. That's a big plus, as neighborhood support is often difficult to muster for government agencies trying to open new homeless shelters. Neighbors in the Foster-Powell neighborhood, for example, are currently fighting county and city plans to operate a shelter at a former grocery store at Southeast Foster Road and 61st Avenue.
"We were in a rare position where the use that we were contemplating for the building was actually considered by the neighborhood to be an improvement from its prior use," said Andy Miller, executive director of Human Solutions, which provides housing and social services in the county.
For the county and Human Solutions, the real selling point wasn't the building. It was the land underneath, a nearly 1-acre parcel with a parking lot attached. In the long term, Human Solutions proposed redeveloping the site into an affordable apartment complex with 70 units.
"It is an excellent site with good redevelopment potential for a project that could include affordable housing and commercial development like a green grocery," Miller wrote in an email to officials at Multnomah County.
This pitch helped persuade Kafoury, the county chair, to invest county money.
On Oct. 22, 2015, county commissioners agreed to loan Human Solutions $300,000 to help buy the property. They also agreed to forgive $50,000 of the loan for every year Human Solutions operated the shelter, and they gave the nonprofit $397,697 for renovations.
Human Solutions also took out a $700,000 loan from the Housing Development Center Community Fund to cover the rest of the purchase price. The HDC Community Fund provides low-interest loans to affordable housing nonprofits.
Both Kafoury and Miller say that before Human Solutions closed on the deal to purchase the site, and before the county board approved its loan to the nonprofit, they conducted normal due diligence and a building inspection.
They say the inspection suggested the roof would need to be replaced at some point in the future.
"This roof had five to 10 years of life left in it," Miller said.
But public records contradict public statements Miller and Kafoury have made about the roof.
Troubling roof report
Multnomah County provided Oregon Public Broadcasting with thousands of pages of due diligence documents it received from Human Solutions in October 2015, while the deal was being worked out.
Before the sale went through, Human Solutions had the property tested for lead, asbestos and other environmental hazards. The nonprofit completed a detailed property survey and had an appraisal done. The appraiser reported that the building was in "fair to average condition" and estimated it needed approximately $60,000 in deferred maintenance.
But the county has no record of a standard pre-sale building inspection or a professional assessment of the roof.
Two weeks ago, Human Solutions sent OPB one more document the county didn't provide OPB — a letter written by the contractor hired to remodel the building, Colas Construction.
"The roof needs some basic maintenance but appears to have another five years of useful life," wrote Marc-Daniel Domond, the Colas project manager on the remodel.
Attached to the letter is a more detailed report written by a roofing company, RyKi LLC. That report includes photos of damage — and recommends replacing the roof.
"If your budget isn't there yet, then we are here to help you get by the best we can with regular maintenance and repairs to see if you can get a few more years out of the roof," the letter states.
It's not clear whether county facilities staff conducting due diligence on the loan to Human Solutions ever received this report. Miller said Human Solutions hasn't been able to determine whether the document was sent to anyone at the county.
Kafoury couldn't say whether her staff had ever read it.
The roofer's report could have jeopardized or changed financing of the deal, because it suggests the property needed immediate repairs beyond the proposed remodel. The report was dated Oct. 19, 2015, just days before county leaders voted to help Human Solutions buy the property.
Human Solutions' primary lender, the Housing Development Council, had asked to review the project's rehabilitation budget as a condition of closing and had said "the budget must ensure that the roof will be viable for five years."
Miller said he stands by Human Solutions' decision not to replace the shelter's roof back in 2015.
"It wasn't intended to be a permanent shelter. It wasn't intended to last 60 years," he said. "It was intended to last six years."
Now the county has suspended operations at the shelter after just two years.
Switching focus to long-term sites
County Commissioner Loretta Smith voted to approve funding for the shelter purchase in 2015, but said before she cast her vote she was concerned that the county was awarding money to Human Solutions for a shelter facility without seeking competitive bids.
"There may have been a better site that didn't need all of this deferred maintenance," she said.
Smith also sent the Multnomah County auditor a request on Feb. 27 to review how Human Solutions spent the $398,000 the county awarded the nonprofit to renovate the building. The next day, Smith said the auditor replied that the spending will not be reviewed until the Joint Office of Homeless Services is audited later this year or next year.
The Joint Office of Homeless Services has promised to conduct a full inspection of the building, including the roof and other systems, to determine whether the shelter can reopen. Human Solutions is leading that inspection.
County officials declined to say whether the loan and trust agreements it has signed with Human Solutions will obligate the county to make mortgage payments on the property if the shelter is forced to close or move.
Marc Jolin, director of the Joint Office of Homeless Services, defends the county's loans to Human Solutions and the quality of the remodel that took place before families arrived. But he also said the county opened this shelter before he was hired as the head of the joint office and before the joint city-county office even existed.
Jolin said the office is shifting away from quick deals to open inexpensive, temporary shelters in makeshift places like old strip clubs and empty offices, in favor of planning more permanent facilities.
"We can open shelters quickly in the spaces that are available to us, but as we do that we need to also be looking for the better site, the better building, one that we can make a sustainable investment in," he said.
It's time, he said, to accept that the housing crisis is going to be with us for a while, so officials and nonprofits need to start building shelters that will last.
OPB is a news partner of the Portland Tribune. This story is an edited version of the second story in a series OPB did on the shelter's problems. You can read the complete story and find a link to the first story here.