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In recent weeks, the city has placed hundreds of vulnerable homeless shelter residents, frontline hospital workers and recently released Rikers Island inmates into hotel rooms to help contain the spread of COVID-19.
And every time one of these temporary guests check in, a company down in Texas pockets a $27 per room, per night fee.
The firm, Crewfacilities.com LLC, also bills the city $18 for every breakfast, $19 for every lunch and $34 for every dinner provided to the guests, according to records obtained by THE CITY.
And then there’s the actual hotel rooms. The city Office of Emergency Management blacked out the room rates spelled out in Crewfacilities’ contract, arguing the information was protected from public disclosure as a “trade secret.”
But according to an unredacted copy of a related document obtained by THE CITY, nightly room rates range from $128 for a room in Queens to $163 to spend the night in Times Square.
A review of Hotel.com Thursday showed much lower rates available at struggling hotels all over the city. A Hilton Garden Inn in Tribeca, for example, was offering a discounted rate of $89 per night, while rooms at a Best Western in Herald Square were going for $75.
Times Square Stays
So far, taxpayers have shelled out about $15.5 million for more than 8,600 rooms booked by Crewfacilities in hotels around town. That includes the per room, per night fee and the thousands of meals for guests who request them at the rates set by Crewfacilities’ contract.
Hotels where the firm has placed people range from the Hilton Garden Inn in Times Square to a Howard Johnson in Brooklyn to the Hollis Hotel in Jamaica, Queens.
The original OEM contract with Crewfacilities started April 2 and ended May 1, but the payments have continued as an extension is worked out.
The contract with the Austin firm — which had never done business with the city before — caps hotel-related spending at $250 million and requires the company to be able to book up to 30,000 rooms in New York City and the surrounding area.
Omar Bourne, spokesperson for OEM, said only hotels located within the five boroughs have been utilized to date. But if none are available on any given night, Crewfacilities is approved to book rooms in Westchester, Long Island or New Jersey, according to its contract, he added.
In an interview with THE CITY Friday, Councilmember Ben Kallos (D-Manhattan), chair of the city contracts committee, questioned Crewfacilities’ $27 per room, per night fee, noting that the industry norm for such a booking fee is typically 10% of the room rate. That would come out to $12 to $16. As of last week, Crewfacilities had charged $2.5 million in these fees.
Kallos called on OEM to cancel the contract, estimating that between the $27 fee and the $71 per-day meal charge, Crewfacilities could be charging taxpayers $3,000 per month — above the cost of hotel rooms — for each guest.
“At the height of the pandemic we were desperate for hotel rooms and we got ripped off by a contract with $27 overhead,” he said. “We can and must do better by cutting out the middleman and going directly to the hotels. We can use the savings to fund essential services for youth and seniors this summer.”
As for the cost of an $18 breakfast, he added, “That better be one fancy breakfast. If it’s $18 for a bagel and coffee, that’s expensive even for New York City.”
A $1.2M Food Bill
As of last week, Crewfacilities had billed for $1.2 million in food charges. Bourne noted that many of the guests placed in these hotels are hospital workers who don’t request all three meals, which are provided mostly to the homeless shelter residents placed in isolation hotels.
Crewfacilities is a national firm that arranges hotel bookings for corporations, government entities and the military. The firm’s president, Andrea Tsakanikas, did not return THE CITY’s calls seeking comment.
The total number of rooms booked under this contract could grow exponentially if the City Council gets de Blasio to drop his opposition to its plan to house every homeless resident in hotels until the COVID-19 crisis passes.
And even more taxpayer-funded hotel rooms are on the tarmac: De Blasio recently announced a new “test and trace” program that will greatly increase the number of New Yorkers tested for the virus.
Under that program, the city plans to book more than 1,200 hotel rooms for some of those who test positive and anyone who’s been in close contact with those who are infected.
Hotel placements for the “test and trace” program will not be handled by Crewfacilities, but will be run by the city Health & Hospitals Corporation, which has yet to provide details on hotel rates and whether any booking fees will be involved. A spokesperson for HHC did not respond to questions about the hotel plans Friday.
A Mix of Guests
More than 8,000 of the rooms booked to date by Crewfacilities have been for hospital workers who are reluctant to return home to their families while they’re working the front lines.
Another 453 rooms have been booked for shelter residents, including individuals who have tested positive for the virus but are not in need of hospital care and those who are particularly vulnerable to exposure, such as the elderly and residents with underlying medical conditions.
As THE CITY has documented, life in some of these isolation hotels has been a challenge for some of the homeless placed there. At least one resident who was designated as displaying “mild” symptoms died of COVID-19 in a hotel, and residents have said that promised on-premises nurses are often missing in action.
Under its contract, Crewfacilities has also booked 209 rooms for inmates sprung from Rikers under a program of compassionate release overseen by the Mayor’s Office of Criminal Justice. And two rooms were booked for runaway youth involved in a Department of Youth & Community Development program “who are symptomatic or need to be isolated to keep others in the program safe,” Bourne said.
The Crewfacilities contract includes a rider requiring that it follow certain protocols of the Federal Emergency Management Administration (FEMA). City Hall is expecting the federal government to reimburse the city for hotel bills.
“The city is in regular conversations with FEMA to maximize reimbursement of eligible costs,” Bourne of OEM said. “We will continue to advocate that they cover 100% of our costs.”
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