A $30 million contract with the San Francisco-based nonprofit Urban Alchemy to take over a major Denver homeless shelter looked like it was sailing through City Council for weeks without a concern — despite the nonprofit’s history of lawsuits, data misreporting and strife with other cities.
Denverite reported on the group’s short and troubled history two months ago, just after the Department of Housing Stability announced the group had been picked to run the shelter in a former DoubleTree Hotel and days before the council began to review the contract.
Among the troubles Denverite identified:
- Accusations of lobbying rule violations that were later thrown out
- Data misreporting (identified by Urban Alchemy itself)
- A sexual harassment lawsuit
- A worker who hosed down a sidewalk, nearly drenching an unhoused person
- More than 20 court cases since 2020
When Jeff Kositsky — the former chief growth officer of Urban Alchemy who now works as a deputy director of shelter and stability in the city’s housing department — showed up a few days later in October to discuss the contract with council’s Community Planning and Housing Committee, he was ready to answer questions.
Surely, there would be some.
“We were there,” Kositsky told council members on Monday night, during a heated discussion about whether to contract with the group. “We were able to answer questions. No questions were asked of them at that time.”
A few weeks later, the committee approved the contract without any discussion at all.
When the contract finally came to the full council for a vote, tensions ran high.
Council members grilled Kositsky, Urban Alchemy staff and Cole Chandler, Mayor Mike Johnston’s senior homelessness advisor about why such an embattled organization would be selected in a “competitive” bidding process.
It turns out, the pool of applicants wasn’t all that competitive. Just three groups put in bids to take the reins from The Salvation Army: the local St. Francis Center and Bayaud Enterprises, along with Urban Alchemy. All three applicants were picked to run a shelter.
The Salvation Army, which shouldered much of the city’s homeless response during and after the pandemic, struggled with shelter staffing and came under fire for safety and health concerns – some of which were actually the city’s responsibility. The city failed to pay The Salvation Army for its work for months, while contracts were delayed.
During Monday’s meeting, council members also raised questions about the lawsuits, strife between other cities and Urban Alchemy, and inhumane treatment in shelters the nonprofit ran.
“You all had knowledge about the concerns in other cities, but you did nothing to make sure that there were additional measures in place in order to be able to safeguard against some of the concerns that we saw that were raised,” said City Councilmember Shontel Lewis, who sits on the committee that initially approved the contract without question.
The city has shifted to a performance-based payment system for shelter operators, writing checks when certain metrics of housing and services are delivered. Each contract can be terminated within two weeks, Kositsky said.
“We feel like the measures that we have in place now are more than adequate for responding to any types of problems or issues that may come up with any of our providers,” Kositsky said.
“Accountability is number one for us,” said Ian Clark-Johnson, a practitioner with Urban Alchemy. “We’re here to be accountable for everything that we do, not just tonight, provided the contract is passed, but in the future we want to be accountable and transparent and judged on the merits of the work that we’re doing.”
The organization takes complaints seriously, Clark-Johnson said.
“We have had bad actors in the past,” he said. “We’ve moved swiftly to terminate them and hold ourselves accountable with city partners.”
He assured Lewis and other council members that Urban Alchemy would be happy to meet with them whenever they requested and invited them to stop by and see the work in action.
City Council didn’t vote to approve the contract until three weeks before the work would start – giving Urban Alchemy little time to ramp up and the city no room to find another partner.
Clark-Johnson told council work has already begun in Denver because of the tight turnaround. Around 70 people have been hired to work at the shelter, and most of those have already been trained — even before a contract was signed.
While multiple council members expressed concerns with Urban Alchemy, Kositsky told them that if they did not vote for the contract, The Aspen shelter at the old DoubleTree would likely need to close, forcing more than 200 people back to the streets. HOST would try to find a solution, but he could not imagine what that would be.
Councilmember Amanda Sawyer described the members’ concerns about Urban Alchemy as “real” and “fair,” but ultimately decided to support the contract.
“I do not want people out in the cold on our streets,” she said.
After a lengthy debate, council voted on two separate contracts with Urban Alchemy, one to run The Aspen and another to provide outreach services to people experiencing homelessness.
Outreach ambassadors connect people with behavioral health services, shelter and housing, and encourage people to engage in “pro-social behavior” like not using drugs in public spaces, Chandler said.
Both contracts passed on 9-4 votes, with Flor Alvidrez, Stacie Gilmore, Lewis and Sarah Parady opposing the shelter contract and Gilmore, Serena Gonzales-Gutierrez, Lewis and Parady opposing the ambassador contract.
