For more than a month, rumors and questions have swirled around the former Quality Inn Hotel in Ahwatukee near I-10 and Elliot Road as some local residents expressed concern that it would shelter migrant families just as the Holiday Inn Express is being used a few miles south.
Turns out, nothing could be further from the truth.
The developer whose company bought the 34-year-old hotel for $8 million earlier this month is turning the building into an apartment complex, eyeing young professionals who are facing the same kind of low inventory among rental units in the Valley that homebuyers are confronting in the re-sale and new-build markets.
“It’s contemporary market rate apartments. It’s no Section 8. It is no migrants. It is not stuff like that,” said Josh Wertlieb, who, with Jay Chernikoff, owns Harc Holdings, a subsidiary of Quinn Holdings LLC, which is listed as the official buyer of the hotel.
“We think it’s a handsome building in a good location where people want to live,” Wertlieb told the Ahwatukee Foothills News. “And we think rather than an old run-down Quality Inn, it’s best served by being apartments for young professionals.”
The 188-unit four-story hotel consists of six buildings and 179 parking spaces on just under 3 acres of land with an additional 3.4-acre parcel next to it.
The sale price equaled just under $2.4 million per acre and $42,553 per unit, according to Valley real estate transaction tracker vizzda.com.
That price is a lot higher than the last time the hotel was sold.
Vizzda records show that in 2013, a couple and a woman bought the hotel for $3.23 million – which translated into $951,327 per acre and $17,154 per unit.
Harc Holdings' two partners are no rookies when it comes to converting hotels into apartment complexes.
Wertlieb, who lives in Phoenix, “has made a career out of finding value in a multitude of asset classes,” according to the company’s website.
“He began his career running two successful fine wine wholesale firms and was widely recognized as an expert in old and rare wines. His work included authentication services for the US Marshals Service in a high-profile counterfeiting case.”
Chernikoff, a Scottsdale resident and notable philanthropist, “has 15 years
of experience as an owner and operator of commercial real estate in the Phoenix area,” Harc Holdings website states.
“He has bought and sold office buildings, hotels, and multifamily property over that time.”
Wertlieb in recent years “has taken his nose for value and transitioned it into finding undervalued multifamily projects in and around the metro Phoenix area,” the website states.
Their company also describes its mission as “finding the highest and best use for underutilized hotel properties.”
“We reuse functional space and reimagine the footprint for a greater purpose,” it continues. “We focus our business on growing markets that have seen their supply of affordable apartments diminish over the past few years due to increased populations, rising rents and gentrification. Our units are fully renovated and present a great solution for renters looking for quality infill product that still fits within their budget.”
With a mantra of “redefining rental apartments one hotel at a time,” the company boasts about its goal of “finding locations where demand for attainable housing has outgrown the supply and hotel properties are no longer the highest and best use for the area.”
“We optimize the existing hotel for apartments, often combining rooms or reconfiguring common space to lend an apartment feel,” it said, adding its property managers “understand the market and work closely with us to deliver a first class experience for tenants at rents that work for their budgets and are below the surrounding neighborhood.”
Its portfolio includes The Merlino on Baseline Road at I-10, which is the old Innsuites at the Mall hotel currently being converted into apartments, and The Woodson on Thomas Road near I-17, a converted hotel that currently has studio and one- and two-bedroom apartments for rent that include a kitchen and hardwood floors.
Rumors about what was in store at the Quality Inn were fueled partly by the fact that Harc Holdings wasted no time getting started with the conversion.
Within days of closing, dozens of mattresses were piled up in front of the building and some callers to AFN indicated that at least some people thought the beds were waiting to be moved into the building for migrant families.
But the main driver for the rumors was the disclosure that the Holiday Inn at 50th Street and Chandler Boulevard was under contract with a Texas nonprofit called Endeavors, aka Family Endeavors, to house families that had entered the country legally and immediately surrendered to U.S. border officials, asking for asylum.
The U.S. is legally bound by its own laws and international laws to consider those asylum requests. While immigration judges evaluate the requests – a process that can take several years because of the sheer volume of cases – the families receive temporary shelter, often only a few days, before they find longer-term living arrangements with relatives or through organizations that assist migrants.
But there has been little specific information about the Holiday Inn contract with Endeavors, which has an $86.9 million contract with U.S. Immigration and Customs Enforcement to provide 1,239 shelter beds in Arizona and Texas hotels through September.
East Valley Congressman Andy Biggs last week wrote a scathing letter to ICE and the Department of Homeland Security demanding more information.
“I am appalled that illegal aliens are being housed in American hotels,” Biggs wrote. “Illegal aliens should be held in Immigration and Customs Enforcement detention facilities, not in hotels.”
He then listed 14 specific questions seeking the same information that AFN requested of ICE three weeks ago.
Those questions included whether any other hotels in the Valley are under contract, what kind of background checks had been made on the people prior to their arrival at the hotel and the duration of their stay in the hotels,
ICE has disclosed little except to say the families are tested for COVID-19.
In past years, families have generally been sheltered for only a few days at government expense before they are placed longer term with relatives or others.
One of the people hailing Biggs’ letter is Patricia Porter, an Ahwatukee accountant who has organized a weekly protest at the intersection of 48th Street and Chandler Boulevard.
The first protest April 14 drew about 40 people, who waved signs and banners protesting partly the lack of information on the shelter arrangements with Holiday Inn and partly the Biden Administration’s handling of the border.
Porter said about 30 people showed up last week, but she intended to continue the protests every Wednesday, including today, April 28, beginning at around 4:30 p.m.
She said she also was encouraged that some passing motorists parked their cars and joined them, with one saying, “You’re speaking my language.”
A few people set up a counter demonstration across Chandler Boulevard and Porter
said the college-aged son of one participant came over to her group and wanted to know more about their positions.
“He was really interested in learning different viewpoints instead of arguing,” Porter said.
Porter also insisted the protest is not anti-immigrant.
“Most people are immigrants,” she said. “But they came over the correct way.”
The protest occurred on the same day Gov. Doug Ducey and a group of legislators visited the border to reinforce the governor’s decision to assign 250 Arizona National Guard troops to assist border communities in ways that will allow their own police departments to perform their normal duties.
The governor mentioned there have been more than 170,000 apprehensions along the border since the beginning of the year, with almost 19,000 unaccompanied minors taken into custody. And that is higher than figures in prior years.
“The numbers don’t lie,’’ he said. “This surge is a direct result of the bad policies coming out of Washington, D.C.’’
Sen. Victoria Steele, D-Tucson, called the move “political grandstanding.’’
She said the state has secured $110 million in emergency funding from the American Rescue Plan, crafted by the Biden administration, to support local government and nonprofits who are currently providing care to migrants at the border.
“Seriously, we’re going to spend $25 million in state money on this?’’ she asked in her own Twitter post. “Where were the Arizona Republicans when the Trump administration was ripping babies out of the arms of their mother’s and father’s arms? Where was the outrage then?’’
But the announcement also got what could be considered predictable accolades from Republican legislators.
“The security of Arizona and our residents is our first priority,’’ said Senate President Karen Fann, R-Prescott, in a prepared statement released by Ducey’s office. “Illegal crossings put our border towns, safety personnel and all Arizonans at risk, but also the immigrants who are facing unsafe conditions as they cross into the state.’’
House Speaker Rusty Bowers, R-Mesa, said the deployment “helps combat the Democrats’ misguided message that crossing the border illegally is acceptable.’’
(Capitol Media Services contributed to this report.)