The Ocotillo Apartments and Hotel began to swelter as the Tucson heat crept into the building after residents say building managers cut the power while they were still living there. It was barely noon and the temperature outside was already 95 degrees.
“Now it’s just extremely hot. It’s extremely hot,” Denise said, dressed in a black spaghetti strap tank top and shorts to keep cool.
Denise identified herself only by her first name. Standing by the hall’s only light source — a large window framed by spiderwebs and dust — she talked about life after being lured into a sober-living facility and slowly being forced onto the streets after Arizona state leaders targeted fraudulent business owners involved in a statewide Medicaid scam
These scams heavily target Native American people and are rampant in Arizona. The program organizers rely on participants’ insurance to pay for services they never get. In the past year, the state Medicaid program known as the Arizona Health Care Cost Containment System, or AHCCCS, has suspended almost 300 fraudulent sober-living facilities, including New Direction Behavioral Health which is responsible for placing residents in the Ocotillo.
Conditions in the building deteriorated after the sober-living program abandoned residents as New Direction Behavioral Health operators stopped paying Ocotillo building owners and neglected their legal obligations to Tucsonans counting on housing and health care for addiction.
In March, Georgitta and Erik Koernig Sr., along with their dog, Hope Rose, a mix of sweetness, scrappiness and white fur, gathered what they had…
Denise is among the 250 residents in Tucson — and hundreds, possibly thousands more, across the state — who are calling on local and state leaders to organize an immediate unified emergency response to the crisis that has left vulnerable people feeling like collateral damage.
Now, after a legal complaint filed by the city of Tucson, a judge has issued an order to shut down the Ocotillo, according to documents obtained by Arizona Luminaria via a public records request. Despite magistrate Judge Thaddeus Semon’s order stating that Ocotillo residents have “10 days” starting on Sept. 26 to “vacate the premises,” within two days residents have already lost access to electricity amid triple-digit weather.
It’s currently unclear who shut off the power. The Arizona Corporation Commission states that “during periods of extreme weather, regulated electric utilities are prohibited from disconnecting customers for reasons such as late payment, failure to pay, or carrying a bill arrearage.”
The ruling forcing residents to leave came as the judge wanted to determine “potential health and safety hazards” at the building and set a court hearing for early December.
The Ocotillo Apartments and Hotel has been Denise’s home for nearly five months, while she was unknowingly a client of one of the fraudulent sober-living programs, New Direction Behavioral Health, that lured hundreds of people to the Ocotillo with promises of treatment, housing and resources.
“It’s been stressful, because I have to worry about where I’m going to go next,” Denise said. “My boyfriend, and I have so much things that I’ve just gathered in the time that I’ve stayed here.”
In addition to her life mementos and belongings, Denise is living with her boyfriend and three dogs so it’s nearly impossible to find a shelter that’ll take them all in.
The issue of fraudulent sober-living programs in Arizona is well-known, garnering national attention and criticism from U.S. congressional leaders. Despite Gov. Democrat Katie Hobbs promising in a May press conference “to bring about the systemic reforms we need to root out this problem and deliver true accountability,” abuse persists for unsheltered people with medical conditions that include drug and alcohol addictions.
Federal, state and local governments have failed to prepare resources and support for the human fallout of suspending fraudulent sober-living facilities, resulting in victims of these scams losing their homes like residents of the Ocotillo.
Denise is one of the hundreds of program participants that building management warned without a legal eviction notice to leave in early September. Since then, many have moved away out of fear or because of monetary incentives. Last week, Ocotillo management was offering $100 for remaining residents to leave. This week, that pay-off to get out went up to $200.
The Tucson court order closing down the Ocotillo was signed on Sept. 26. It lists the city of Tucson as the plaintiff in the case and 1025 E Benson LLC as the respondent for Ocotillo Apartments and Hotel. The LLC is also registered at that address with the Arizona Corporation Commission as “lessors of residential buildings and dwellings and any other lawful purpose.”
Arizona Luminaria reached out to Ernesto Portillo, the city’s Department of Housing and Community Development’s public information officer. He referred all questions about vulnerable residents at the Ocotillo and city actions to force people out of the building to the city manager’s office, led by Michael Ortega.
Andy Squire, the public information officer for the City Manager’s office, told Arizona Luminaria in an email that code-enforcement staff were at the Ocotillo Apartments Sept. 28 for a follow-up inspection after prior code violation notices.
Upon arrival, the city’s code-enforcement staff found that the building did not have electrical service or fire protection. “For these reasons the property has imminent hazards and is unfit for occupancy,” Squire said.
Arizona Luminaria asked city officials to provide the public information on policies or laws that allow immediate evictions when the Tucson judge’s court order mandated Ocotillo residents receive 10 days to vacate. Squire referenced city code, however, as of Sept. 28, did not provide a specific policy or law permitting Tucson officials to circumvent a court order.
“As provided under the Code, unless these conditions are addressed immediately by the property owners or property management, the property will be posted by Code Enforcement with notices advising that no one can enter or remain on the property; and anyone residing there will have to vacate,” Squire said.
Juan Cruz and Selene Milroy, general managers of the apartments, were also noted in the order, along with a city of Tucson Inspector identified in the public record by her last name: “Tidwell.”
The court records state that “there has not been significant progress up to this point by the Defendant, and that the property 1025 E. Benson Highway is not in compliance with Tucson City Codes.”
It further states that “it is not currently appropriate for people to live there.”
Property owners must “cease and desist from operating as a hotel/apartment, and shall close the premises to all “guests”/”tenants,” No one shall live at the property until it is decided by this Court that the property is compliant with all relevant laws/codes.”
However, the judge stressed that residents have until Oct. 6 to remain at the building. Setting a Dec. 5 date for a “compliance review hearing,” the judge equally held Ocotillo building owners and Tucson city officials responsible for addressing the crisis affecting hundreds of residents.
“Defendant shall diligently follow through with all parts of the permit process and renovation process,” the court order states. While the city planning and development “shall likewise diligently move the permit process forward to avoid delays, given the nature of the situation and the need for more housing in Tucson.”
“The City and its government and nonprofit partners have been offering assistance to individuals at the property, and those resources continue to be available,” Squire told Arizona Luminaria on Sept. 28.
The waitlist for Section 8 housing is so backed up that the city hosts a lottery for people desperate for shelter. A new study, The Cost of Ending Homelessness in Pima County, from coalition group Tucson Pima Collaboration to End Homelessness, estimates that more than 1,300 more beds are needed, as well as almost 5,000 other housing units, to effectively end homelessness in the county. The total annual cost for that project would be about $100 million, plus the costs of housing construction. Added together, the City of Tucson and Pima County’s annual budgets are about $4 billion for this fiscal year.
Tucson-based attorney Billy Peard and his legal assistant, Drew Fellows, are representing more than 20 residents filing complaints against the Ocotillo Apartments and Hotel. Peard said he believes that shutting the power off is the building management’s latest attempt at forcing people out without going through a legal eviction process.
“You want people to leave, you evict them through the eviction court process,” Peard said. “They’re evidently trying to do an end-run around that requirement by fabricating and intentionally creating conditions in their own building that amount to code violations.”
Residents at Ocotillo say no one has yet to provide them with a court-signed order to vacate the premises.
Peard said the Tucson City Attorney’s office told them this week that they planned to do individual room inspections at Ocotillo. Residents could be asked to immediately vacate if the room is found uninhabitable, he said. This would seemingly violate the judge’s court order that residents have 10 days to vacate.
Peard said he’s reached out to the Tucson City Attorney’s Office led by Rankin but hasn’t received any response.
“Despite our asking, they have not provided us a citation to anything,” Peard said on Sept. 28.
City Attorney Michael Rankin told Arizona Luminaria late Thursday that the “situation at the Ocotillo property is fluid and continues to evolve.”
Rankin did not respond to specific questions about the alleged individual room inspections and if there is a particular ordinance or state law that allows the city to violate the judge’s order – permitting residents to stay sheltered for the next week.
Fellows, Peard’s legal assistant, is a plaintiff in a separate lawsuit against Ocotillo after he said the building’s private security on Sept. 22 detained and handcuffed him while he was speaking with clients defending their legal rights on the property.
“I’m like, ‘you’re not a real cop. You don’t have any post certification. This is not legal,’” Fellows recalled, referencing the official qualifications law enforcement officers must receive from the Arizona Peace Officer Standards and Training Board, commonly called AZPOST.
“Then they’re like, ‘Tough nuts. This is a citizen’s arrest,’” Fellows said.
Fellows said private security claimed he was resisting arrest. A video shared with Arizona Luminaria of the incident shows the private security guard grabbing and holding Fellows by the wrist while he’s standing in place.
Ali Kulumba told Arizona Luminaria earlier this month that the program New Direction Behavioral Health is responsible for charging fees to residents in the sober-living facility, which has since been targeted in the Medicaid scam.
According to the Arizona Corporation Commission filings, Kulumba is the business entity manager for both New Direction Behavioral Health and Happy Times, the recent name change for the facility, along with one other health care and social assistance business, Tamz Hope Home Care and a foreign for-profit corporation, Mercy Hands Human Services. The statutory agent for New Direction Behavioral Health is listed as Odette Mucheso Mubalama.
Kulumba said “he wasn’t in the position” to answer any questions about the eviction or abandonment of program participants at the Ocotillo.
“What I know is that it’s the city right now who took over those people,” he said.
Denise joined New Direction Behavioral Health after losing her home and reaching out to a friend who was already in the program. Like many other Native Americans with tribal affiliations, program administrators pressured Denise to change her insurance to the American Indian Health Program before she could join the sober-living program.
Denise also said she had to endure constant pressure by program administrators because they knew she was desperate for shelter.
“I really felt like they were taking vulnerable girls, women that don’t have nobody and that don’t have family, and that are struggling or that are by themselves and holding housing over their head,” Denise said.
In May, a fire took out the building’s hot water and building management still hasn’t restored it. Denise was in the building when the fire happened. She said the only fire alarm was frantic people in the halls and once they tried to evacuate, all building entrances were locked except for one in the front, she said.
Since the fire, Denise’s air conditioning hasn’t worked and her family is left relying on a faltering window unit.
“I can’t take a shower right now because it’s cold water. It’s dark,” Denise said. “And my room is completely freaking hot.”
The court order notes that the LLC operating the Ocotillo building has resubmitted “the necessary plans” to the city’s Planning and Development Department on Sept. 21.
The Ocotillo owners were also ordered to “secure the property … to include a fence and, if needed, additional security.”
Peard, the attorney for multiple residents at Ocotillo, plans to request an injunction to extend the 10-day order.
Denise is among Tucsonans still at Ocotillo, living in constant fear she’ll lose everything. She’s scared security will board up her room if she leaves but now she fears the heat, and what officials with the city of Tucson and building owners will do next, if she stays.
“It’s very stressful. Because I don’t know what I’m gonna do next right now,” she said.
Denise is now scrambling to find an alternative housing solution to the Ocotillo, while packing in case she’s forced to leave in a rush.
On her door is a sign saying she won’t vacate her room until issued a signed eviction order from a court. As life without air conditioning in the desert sets in, her hope for shelter and her resolve is wavering.
Reporters Chelsea Curtis and John Washington contributed to this article