City of Austin contracted with several local motels/hotels during the COVID pandemic to provide accommodations for the homeless population, emergency housing, isolation, and support services related to COVID-19. The rentals are listed under two separate expense categories: Rentals-RealEstate-Other and Rentals-RealEstate-Office. Five properties received almost $8 million dollars. Take a look at what was spent and compare that with what they originally proposed.
⦁ DBG Austin Hotel (Days Inn – Downtown) 3105 North Interstate Highway 35, Austin – $1,519,560
The Agreement began in May 2020 and had a 60-day initial term, with an option for 2 additional 30-day extensions for an amount not to exceed $234,000. They updated these agreements as time went along, adding more money, with no end in sight.
⦁ DBG Austin South LLC (Days Inn – Downtown) 4200 South IH 35, Austin – $2,894,760
The Agreement was signed in April 2020 and had a 60-day initial term, with an option for 2 additional 30-day extensions for an amount not to exceed $541,800. Once again, they updated these agreements as time went along and added more money.
Both properties are owned by Suraj Demla. He is based out of Plano, TX and has many properties throughout the State of Texas. The latest property in the works is the Element Hotel in the Domain area.
3. Karvins Hotels, Inc. (Country Inn & Suites), 7400 N Interstate 35, Austin, TX – $820,985.78 for rental in a pre-purchase agreement. The City of Austin agreed to purchase this property from Karvins Hotels Inc. for a total amount not to exceed $8,755,000.00 including closing costs. The purchase price did not come without controversy since it was significantly higher than the appraised value.
Andy Chhikara @ Soch Group https://www.thesochgroup.com/
HonestAustin.com coverage of the purchase price discrepancy:
4. LVP FFI Austin LLC. (Fairfield Inn & Suites- Northwest/Research) 13087 Research Blvd, Austin, TX
This contract was to occupy the property for emergency housing, isolation, and support services related
to COVID-19. Not sure who occupied this motel, if anyone. The agreement allowed the hotel to be paid $5880 daily when ANY number of hotel rooms are occupied. The contract began in Nov. 2020, with an initial 60-day term. The agreement allows for three (3) additional 30-day extensions at a rate not to exceed $529,200.00 and this amount has been included in the requested authorization. They have exceeded this amount and are still billing for monthly services.
David Lichtenstein, CEO of LVP FFI Austin LLC is also majority owner of Lightstone
Lichtenstein has bounced back from a $75 BILLION dollar bankruptcy and is now a BILLIONAIRE once again.
5. Pleiades Hospitality (Motel 6) located 8010 North IH 35, Austin $1,349,553.32
The Agreement began on April 3, 2020 and had a 60-day initial term. The agreement allowed for two additional 30-day extensions at a rate of $110,000.00 per 30-day term.
The initial $220,000 was paid under the Category: Rental-Real Estate-Office.
Another $1,129,553.32 was paid under Category: Rental-Real Estate-Other for an additional 9 more months. The last payment was given 04/26/2021. This business also received two grants in 2020 for $222,811.25.
The City of Austin spent almost $8 million dollars renting hotel and motel properties over the past 12 months, on top of spending millions to buy properties across Austin. Shelters also received money as well. How many people did this $8 million dollars shelter and for how long? How did these companies get chosen for the contracts? These are taxpayer dollars they are spending and taxpayers deserve answers.