The Denver City Council on Monday approved a nearly $1 million contract with The Fax Partnership. Funded with American Rescue Plan Act money, the contract is designed to help The Fax pay down debt and renovate six rooms in two motels serving as homeless shelters.

The two motels, located at 8405 and 8415 E. Colfax Ave., have 29 operational units. The contract provides $233,456 for The Fax to renovate six additional units, bringing the total to 35. The remaining $750,000 in the grant will be used to pay some of The Fax’s debt. 

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The Fax Partnership is a nonprofit community development organization focused on East Colfax Avenue in Denver – which it calls the city’s original Main Street once known as the gateway to the Rockies.

“The Fax Partnership’s mission is to strengthen and support East Colfax while advocating for equitable development,” Monica Martinez, the executive director of The Fax, said in a release. “With this acquisition, our organization fulfills its mission to both support those who are in the community now and ensure future redevelopment is affordable so our residents stay here.”

The Fax acquired The Westerner and Sand & Sage Motels in September for a cost of $4.5 million. The grant from Denver’s Department of Housing Stability (HOST), as well as other grants from state and local offices, have helped bring the owed amount down to $2.2 million, according to a spokesperson. 

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The grant from Denver is part of an ongoing effort from the city to provide affordable, transitional housing and shelter to homeless people. Using hotels and motels has been a critical part of Mayor Michael Hancock’s efforts to address homelessness and the housing crisis. 

“Motel acquisitions offer a key resource for sheltering our unhoused neighbors, and for long-term development to create more affordable housing for our hard-working residents,” Hancock said. “This project is an ideal investment for our American Rescue Plan Act funds and will further our work to improve affordability in communities who need it most.”

The grant is one of several efforts council has approved in line with this goal. In early November, council approved a 12th amendment to a contract that nearly doubled the agreement in place with U.S. Motels Denver North. The contract added $3.9 million for use when Denver’s emergency shelter beds are full and focused on sheltering families, bringing the total to $8.4 million.

Yet, another part of The Fax’s acquisition was not part of the earlier amendment: Redevelopment. The motels will be rented by the Volunteers of America of Colorado (VOAC) while that organization waits on their own new shelter to be constructed. 

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“We are so grateful that this partnership with The Fax will enable us to continue uninterrupted service to our most vulnerable neighbors as we redevelop and create a new, trauma-informed designed Theodora Family Motel, so that we can provide our residents with healthy relationships, connection and the opportunity for life-transformation,” David Schunk, President and CEO of Volunteers of America of Colorado, said in a release.

Following the end of the lease with VOAC, The Fax will continue operating the properties as shelters until 2028, when redevelopment will begin. The existing buildings will be demolished to make way for affordable housing with community-serving businesses on the ground levels.