New Castle County will likely be the new owner of the Sheraton South hotel near New Castle.
The county won at auction to purchase the 192-room hotel on flood-prone Airport Road for $19.5 million.
The auction turned into a last-minute bidding war with the price going up in $1 million required increments every 15 seconds. An auction listing showed the property in escrow.
"This is an exciting step forward for the county," said County Executive Matt Meyer.
The county still has to close on the purchase and officially acquire the hotel. Meyer said the final selling price was $125,000 under the appraised value of the property, according to a third-party appraisal.
WDEL broke the news that the county planned to use federal CARES Act money to purchase and convert the hotel into an extended-stay homeless shelter in order to meet rising numbers of people experiencing homelessness ahead of the winter. Many shelters have been unable to operate during the pandemic due to space concerns.
Amid the pandemic, New Castle County already has as many as 634 families being housed in a dozen motels in the county while nearly 200 individuals are in emergency homeless shelters.
County Councilman Penrose Hollins noted the homeless population was here before the pandemic, and they'll be here after, and they need help.
"This is a unique opportunity for new castle county to show what we believe in as a county government and who we are as people," said Hollins.
Meyer said acquiring the hotel accomplishes goals the county set forth when the COVID-19 pandemic began in March--protecting public health, protecting the most vulnerable residents, and protecting the economy by bringing jobs back.
"This project, once executed, will actually address all three," Meyer said.
"This is not just an opportunity for our homeless population...but they live among us, so as we take care of the homeless population, we're also taking care of the broader population, especially with this pandemic. So if we don't provide for safe measures for the homeless population, we're being very negligent, because we're putting the entire population at risk," said Hollins.
In an exclusive interview with WDEL prior to winning the auction, Meyer said he envisions the shelter becoming a social services hub like the Community Services building in Wilmington.
"This could be a tremendous hub...for social service organizations that are on the front-lines of addressing issues of addiction and abuse, addressing issues of mental illness, addressing issues of domestic violence, sex trafficking, legal aid, even educational/academic tutoring needs," he told WDEL's Rick Jensen Show.
He also said after the COVID crisis, the property could continue operations with state and federal grant money as well as private donations without becoming a burden to county taxpayers.
"Our belief is the funding is there to operate this thing on an ongoing basis without having a detrimental impact on the county budget," said Meyer.
In addition to a portion of the $322.8 million New Castle County received in federal CARES Act funding, of which a portion will be used to acquire the hotel, the county has also received federal money from the Housing and Urban Development's Community Development Block and Emergency Solutions grant programs. In a second round of that funding, which unlike federal CARES Act money, does not expire, the county received more than $4 million, which could be allocated towards operating the shelter, according to Carrie Casey, manager of the Division of Community and Housing.
Governor John Carney called the challenge of homelessness a "serious one" that the state's responded to by making space available in hotels that weren't otherwise occupied.
"It was a big focus, it was to a certain extent term-limited, so the question gets to be: what do you do now?"
He called Meyer's solution a "creative" one, but didn't express any commitment to partnering with the county to offer services.
"There is some concern about the particular location of the facility kind of being out without access to a lot of services, a lot of the homeless shelters have other services that are provided by non-profit organizations located pretty close to the facility...I'd like to learn more about what that long-term plan actually is."
The county hopes to open the hotel as a shelter as early as December.