The Denver City Council on Monday gave the greenlight to allocate $5 million to help purchase a hotel that houses some of the city’s homeless population.

The money, which came from American Rescue Plan Act, will help a group deliver housing services after buying a former La Quinta Inn located at 3500 Park Avenue West. The hotel-turned-shelter has provided more than 100 rooms to homeless people since April 2020, the city said in a news release.

The city added that plans are afoot to continue the arrangement through at least through 2024, with a “long-term vision” to redevelop the hotel into 200 housing units. 

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The move followed the council’s decision to allow another group to operate a homeless tent site in a city-owned parking lot and to set aside $2 million to provide monthly cash assistance to 140 homeless women and families.

Metro Denver is struggling to address homelessness, which jumped by 12.8% – from 6,104 to 6,888 – between January 2020 and January this year. Denver’s homeless woe sits atop Mayor Michael Hancock’s list of priorities. The mayor recently proposed to spend $254 million to tackle the challenge.

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“Leveraging hotel sites like this is paramount to creating more housing for our unhoused neighbors,” Hancock said in a news release. “This investment clearly underscores ARPA’s ability for communities to create one-time transformational change. We’re grateful for the Coalition’s work in bringing this sheltering and housing site forward.”

Colorado Coalition for the Homeless used bridge financing to purchase the hotel in December 2021. Under the contract, the money would help pay off the bridge financing, the city said. 

The city added that the development will ensure the site will provide shelter “for at least 60 years.”

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“Motel and hotel sites have been a lifeline for people experiencing homelessness in Denver to recover from COVID and to stay in safe protected spaces,” said John Parvensky, President and CEO of the Colorado Coalition for the Homeless. “We know that these recovery spaces are an ongoing need through this pandemic and for future health care needs. As the emergency winds down, we hope to convert the site into desperately needed affordable and supportive housing over the next few years to serve our unhoused community.”