Skid Row Shelter Seeks $300,000 City Bail-Out, Warns It May Have to Close

Saying they are sinking in a sea of red ink, the operators of a model Skid Row shelter for the homeless developed by Mayor Tom Bradley’s Administration warned Wednesday that they will have to shut the facility if the city does not provide a $300,000 emergency bail-out.

Citing loss of state aid and less than they had hoped for in private contributions, officials who run Transition House, on the eastern edge of downtown Los Angeles, told the Community Redevelopment Agency commission that the 130-bed shelter will close Aug. 1 if assistance is not provided.

Shelter officials said they need $600,000 over the next three years--the emergency bail-out this year and $150,000 a year in 1987 and 1988 to cover projected deficits.

But CRA commissioners, surprised by the request and concerned about shouldering increasing costs for day-to-day operations of homeless services on Skid Row, postponed action. Instead, they set a public hearing for next week to review their Skid Row financing priorities.

The Bradley Administration, struggling to deal with the thousands of homeless estimated to be roaming downtown streets, has developed Skid Row shelters but insisted that Los Angeles County is responsible for paying for their operation.

The county Board of Supervisors’ conservative majority, however, has routinely declined requests to finance the shelters. The supervisors contend that such shelters attract more homeless and insist that the county’s existing general relief program, which provides cheap hotel rooms to qualifying applicants, is adequate.

The CRA last year reluctantly voted to subsidize up to 420 new shelter beds, at a cost of about $1.5 million annually, for those not qualifying for county aid. Those beds did not include Transition House, however.

Donald Cosgrove, acting agency administrator, warned the commission that if it approved the Transition House request it would be “getting deeper and deeper into funding the operation of beds” on Skid Row.

Low-Cost Housing

“It goes to the whole question of how much more involved does the agency get,” he said, adding that the agency’s primary goal on Skid Row is the creation and rehabilitation of permanent low-cost housing.

Commission Chairman Jim Wood said the Transition House crisis presents a major policy issue because it opens the door to requests to bail out other homeless shelters.

Transition House, which was selected this year by the U.S. Department of Housing and Urban Development as an exemplary homeless program, is operated by the Skid Row Development Corp., a nonprofit agency created by the CRA to provide housing and jobs on Skid Row. Located in a San Pedro Street warehouse that was renovated for $1.1 million, the shelter has been a showcase project for the Bradley Administration.

The shelter is unusual because it permits stays averaging about 45 days, while most missions limit stays to several days. It also provides a variety of psychological and job preparation services designed to help homeless people make the “transition” from the streets back to stable living situations.

Operation Concept

It was supposed to be self-sustaining with government grants, private donations and, most notably, income from the corporation’s job-creating Skid Row light industrial centers and service industries. However, Martha Brown Hicks, president of the corporation, told the commission that a $164,000 state grant for Transition House recently expired and that she has been forced to use all of the corporation’s income to keep the shelter open, including funds that should have been used to pay a contractor who renovated a light industrial center.

Michael Kadenacy, an attorney and member of the Skid Row Development Corp. board, said that, given the cash-flow problems, the board has no choice but to close the shelter if a bail-out is not approved.

At the shelter Monday, several homeless men praised the facility and its counseling services and said it would be a major loss if the facility had to close. “It’s a great help,” said Isaiah Roberts, who is jobless and taking word processing training at a business college. “They give you an incentive to get off the streets.”