$9M motel bought by Denver for homeless still empty two years later

Two years after buying a motel along Peoria Street, Denver still has yet to move anyone into it.

Monday marks 24 months to the day since the city paid $9 million for the former Stay Inn at 12033 E. 38th Ave., saying it would be turned into supportive housing for the homeless.

But the four-story motel, which Denver boarded up after buying, remains fenced off.

Julia Marvin, spokeswoman for Denver’s Department of Housing Stability, told BusinessDen last week that “negotiations and due diligence efforts are underway with a potential development partner” that would buy the property from Denver for $10.

“This is still being finalized, and we anticipate bringing proposed legislative action for an agreement later this year,” Marvin said in an email. “Final approval from City Council will be required before the property transfer is complete.”

Denver has talked about housing people in the building just south of Interstate 70 for more than four years.

In May 2021, then-Mayor Michael Hancock and U.S. Rep. Diana DeGette held a news conference at the motel to announce that the city would buy it. It took 27 months, until August 2023, for that deal to actually close.

Since then, the motel has sat unused even as the city’s new mayor, Mike Johnston, bought or leased other hotels around the city and quickly moved in people living on the streets.

The former Stay Inn was renovated to include kitchenettes and a new sprinkler system by the previous owner, who told BusinessDen when the sale closed in 2023 that “people could have been living here years ago.”

City officials, however, said last year that the building needed more work before it could house people, saying “possible renovations include structural repairs to walkways and railings and electrical system repairs.”

Denver originally planned to do that work itself but decided last year to instead sell the property for the aforementioned $10. According to the request for proposals, it would be sold with a covenant requiring the property to operate as income-restricted housing for 99 years.