Troubled contractor abruptly shutting million-dollar halfway hotels
Facing three law-enforcement probes and safety complaints by neighbors, the controversial firm that puts former detainees in unused hotels is shutting down the program.
Under investigation by multiple authorities, Exodus Transitional Communities will shut down its multimillion-dollar, taxpayer-funded program that places people released from prison into hotels, THE CITY has learned.
Last week, Exodus sent out a notice to residents of one of the four hotels where it operates revealing that they were in the process of winding down the program there due to unspecified “budgetary decisions” by City Hall.
Exodus was hired by the Mayor’s Office of Criminal Justice (MOCJ) in March 2020 at the start of the pandemic, winning an $835,630 no-bid contract to place inmates released from Rikers Island and state prisons into hotels to help curb the spread of COVID-19.
The contract soon ballooned to $55.6 million. In January, Mayor Eric Adams awarded a new no-bid contract for another $40 million to keep the inmate placement program going. As of this week, $36.9 million of that contract had been spent, records show, bringing the total paid to Exodus so far to $92 million.
In March, THE CITY revealed that Exodus had hired a firm to provide security at one of its four hotels that did not have the required watch, guard or patrol license. The New York Department of State, which regulates such licenses, referred the matter for investigation to the Queens district attorney and the state attorney general.
Adams also asked the city Department of Investigation to look into the matter.
Soon after that, city Comptroller Brad Lander declined to register the $40 million contract awarded by City Hall, citing concerns about the hiring of the security firm. Lander later signed off on the contract.
On Wednesday, spokespersons for all three law enforcement agencies declined to comment on the status of their respective investigations.
A spokesperson for Lander said the comptroller was unaware of Exodus’ plans to shut down some of its operations and would look into what was going on.
A COVID response
The Exodus program was specifically tied to the pandemic, created just as the number of COVID infections, hospitalizations and deaths was on the rise.
But the program continued even as the number of cases has dropped dramatically and as health officials and elected leaders have ended restrictions that once helped stem the spread of the virus.
In February, the Centers for Disease Control significantly loosened the rules for mask wearing. In March, Mayor Adams relaxed multiple pandemic restrictions in the city, noting he was doing this “as COVID cases plummet and vaccination rates reach new heights.”
Several top Exodus employees, including the nonprofit’s president, Julio Medina, did not respond to multiple messages left by THE CITY this week requesting comment about the planned shutdown.
A letter dated Aug. 19 from Darrell Bolden, an Exodus manager, notified residents that the group was planning to shut down the program at one of the hotels, the Wolcott Hotel on West 31st Street in Midtown.
“Due to budgetary decisions unforeseen and beyond the scope of Exodus’ control made by the City of New York, the Exodus hotel program will no longer be providing services at this hotel program location as of Oct. 1,” Bolden’s letter states. “Barring notification of a reversal of the current decision made by MOCJ and the City of New York, Exodus must take the steps necessary to prepare to cut services for this hotel program at this location.”
Exodus management and City Hall would not discuss details of the “budgetary decisions,” but a former security guard at a hotel in Queens where Exodus was placing released inmates told THE CITY that starting in June, workers went weeks without getting paid.
Joshua Ouano, 23, started working as a $20-an-hour security guard Presidential Security, a the firm hired by Exodus, at a Holiday Inn near LaGuardia Airport on May 11, but stopped getting paid one month later. He continued working because he was told to be patient, that the paychecks would soon resume.
“They told us, ‘Don’t worry, everybody’s going to get paid. We just got a new contract from Exodus,’” he recalled. He estimates he racked up 133 hours, and finally quit Aug. 1.
“They were promising so much. That’s the only reason I kept going. It really sounded so true,” he said. “That was the only job I had. I was paying rent so think about me. I had to pay rent. I was over there needing that job. These guys are promising me so many things.”
And as he pressed his bosses at Presidential, he said, “They would tell me, ‘Exodus still hasn’t paid us’. The CEO would tell us they owe us millions of dollars.”
Besides the Wolcott Hotel and the Holiday Inn, Exodus has been placing former inmates in two other hotels, a former Wyndham Hotel in Fresh Meadows, Queens and The Tillary Hotel in downtown Brooklyn.
Jonah Allon, a spokesperson for the mayor, declined to answer THE CITY’s questions about the status of the Exodus program going forward and whether the shutdown at Wolcott would apply as well to the other two hotels where Exodus is operating.
Instead he emailed a vague promise that the mayor’s office would ensure that all the residents currently in the hotels have a place to go:
“The Emergency Reentry Hotels program was originally designed as a short-term housing solution for people returning from the criminal justice system during the pandemic,” wrote Allon. “Exodus is a valued partner, and we are working with them and with our other transitional housing providers to stand up an expanded and more permanent housing program. We are committed to working with all our providers to streamline the transitional housing process and to ensure continuity and consistency of supportive services, and will ensure there are no interruptions in housing for current program participants.”
As of this week, neighborhood residents in Fresh Meadows who raised concerns about the hotel in their community said they hadn’t been told about the status of the program.
As THE CITY reported in May, NYPD officials noted a high number of former inmates who gave that hotel as their address were arrested for a wide variety of crimes, including robbery and assault while staying there.
George Penesis, of the Fresh Meadows Homeowners Association, said City Hall told locals in July that the program there would cease by the end of this year, as Exodus placed residents in more permanent transitional housing.
But Exodus has not provided the neighborhood with a specific timeline for this, and has not responded to requests by state Assemblymember Nily Rozic, a Democrat representing Fresh Meadows, for more details on its plans.
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