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SOUTH SALT LAKE — Days after news broke that the 300-bed men's homeless shelter being built in South Salt Lake was just a vote away from landing under state control, South Salt Lake Mayor Cherie Wood told the City Council the city still plans to work with homeless leaders — but there are bigger problems facing the center.
Wood dropped a new bombshell when she pointed to an email sent from Lt. Gov. Spencer Cox — a lead state official over homelessness issues and a member of the Shelter the Homeless board — to Shelter the Homeless board members indicating "there would be no other accusations of the shelters not opening in time due to weather or the city of South Salt Lake or permits being required," as Wood characterized it to the council.
"It is because of nonpayment," Wood said. "And that is solely on the Shelter the Homeless board to facilitate and fix at this point moving forward."
Shelter the Homeless, the owner of the three new resource centers that are supposed to be nearing completion in coming weeks and months, hasn't been adequately paying the contractors building the three multimillion dollar facilities in South Salt Lake and Salt Lake City — and has had to seek a $21 million bridge loan from Salt Lake County to make ends meet, according to the letter.
In the email, obtained by the Deseret News later Wednesday, Cox tells board members delays in payment to subcontractors building the facility are "affecting the move-in date" for the homeless facilities — and there's a $13 million past-due bill for construction.
"The date to move clients in continues to be pushed back and we were informed yesterday of the potential need to push the move-in date again to August 13," Cox wrote. "The causes for the delay are related to the completion of a construction 'punch list' and we are told that some subcontractors are not returning to finish because they have not been paid.
"What was once highlighted as a slight delay because of weather and hold-ups with South Salt Lake, is now being affected by non-payment to subcontractors," Cox continued, adding that a construction official with Gardner Co. informed state staff the South Salt Lake Center was tracking to be completed August 31 but is now scheduled for September 17 because of non-payment.
Cox goes on the say he and his team were made aware of a "significant problem in potential cash flow" for construction back in May, which led to a request to Salt Lake County for a "short-term bridge loan" to complete construction, and he urged board members to complete requirements of the county to get the bridge loan approved.
"The reality now is that we can no longer stand by saying that construction delays are a result of weather or permitting issues," Cox wrote. "Moving forward, construction delays will be a result of payment issues, which puts the responsibility solely on Shelter the Homeless. We are the responsible entity for raising and securing the funds."
Cox also said it's "critical" Shelter the Homeless meet its timelines.
"Every time we delay, we lose credibility with key partners," he wrote. "As of right now, we are at a point of relying on Shelter the Homeless staff to produce the necessary items for Salt Lake County in order to secure the funds for the construction completion. With a $13 million past-due bill on construction, the urgency to complete this process cannot be overstated. We can’t operate without deadlines internally or with our partners."
News of the funding shortfall comes after the Utah Legislature appropriated $16 million to help fund the construction of the shelters — with the expectation fundraising would make up the rest.
Preston Cochrane, executive director of Shelter the Homeless, told the Deseret News Wednesday evening the organization has raised approximately 70% of the total capital for construction costs for the three Resource Centers.
"Currently, state funding represents 27% and private funding is 43%. Shelter the Homeless is working to secure bridge financing from Salt Lake County to complete the projects on time and avoid any further delays," Cochrane said.
Nate McDonald, spokesman for the Utah Department of Workforce Services, a state agency that has been facilitating the transition to a new homeless resource system, told the Deseret News that Cox's email was to "help inform the Shelter the Homeless board of the urgency" to facilitate the bridge loan.
"The delays up to this point have been because of, whether it's been the weather, whether it's been permitting issues, all the things we've talked about — what we don't want to have moving forward is delays because fo payment issues," he said.
Wood forwarded the email to the City Council ahead of her scheduled update Wednesday on the fight between Shelter the Homeless and the city's "non-negotiables" on a conditional use permit — an issue that lead Shelter the Homeless to vote via email to proceed on a resolution to transfer the South Salt Lake facility to the state so as to bypass the city's permitting process.
Some council members have expressed concern that if the state controls the facility, the city will no longer have any control of what happens inside the center.
"If the state does take over this site, does anything you just said have any bearing any longer?" asked Councilman Mark Kindred after Wood discussed her intentions to continue pushing for a city conditional use permit.
Wood referred to the email from Cox, saying "I think that Lt. Gov. Cox speaks in a manner that the state has no plan to take over this facility."
"But if they were to?" Kindred asked.
"I can't speculate on that," Wood replied. "But I think that email changes a lot."
But McDonald said the email had "nothing to do with anything regarding the proposed resolution with South Salt Lake."
"That is a separate issue," he said. "It does not change the state's position that if the Shelter the Homeless board approves and ratifies the resolution, then the state is 100% prepared to move forward with that."
Cochrane, after a majority of Shelter the Homeless' board sent preliminary votes via email to approve the resolution, told the Deseret News last week he fully expects the resolution to pass.
