Joe Miranda sat on the dusty curb outside the Ocotillo Apartments and Hotel next to a cart towered with his belongings, including a television and standing lamp.
One day earlier, on Sept. 28 – despite a court order giving residents until Oct. 6 to vacate – city officials condemned the building, forcing residents to leave their homes in a chaotic rush. Tucson police officers were there, creating a perimeter and telling residents they needed to leave.
“They got the cops involved and I was like, ‘What are you gonna do, arrest me?,’” Joe said. “I need a place to go anyways.”
In tattered basketball shorts and a black T-shirt, Joe recounted his story while he waited for his friend in a rare shady spot. Tucson saw the hottest September temperatures on record – with a high of 111 degrees, according to the National Weather Service.
Extreme heat can be deadly for people living on the streets in Arizona.
Three days after Joe and others were told to leave the Ocotillo, people are now living in encampments outside of the building.
Since Thursday night, Gabriel Chavez has been sleeping in a green-and-gray tent in the gravel parking lot alongside the building he used to live in. He says a small group of people not affiliated with Tucson government officials came and donated about a dozen tents and boxes of food, water, and a few other basic supplies the same day he was put out in the street.
About nine of the tents were set up in two nearby encampments, both of them hugging meager shade from a few clusters of mesquite trees. Amidst the tents were shopping carts, strollers, buckets and tarps displaying an array of clothes, food packages, and miscellaneous belongings people had salvaged from their apartments.
The scene was taking place sandwiched between the busy South Park Avenue, East Benson Highway, and Interstate 10 — the smog and scream of traffic mixing with cigarette smoke and palpable anxiety.
Antoinette Haro, 34, had been living in the Ocotillo for six months. She’d been in the tents since Thursday and was busy cleaning up the area outside the small space she’d claimed for her own. She was expecting to go to a hotel either tonight or tomorrow. Her nephew had said he’d pay for a night.
“Then? I don’t know where. I hope I’m not coming back here,” she said.
A man who didn’t want to be identified by name said they’d all get together and make a decision about where to go soon. “We might go to Presidio Park,” he said, describing the plaza at Tucson City Hall.
After a city council meeting on Tuesday evening, police officers asked people to leave the plaza, saying it closes at dusk, and people who were there to protest at the meeting moved to a public sidewalk.
Former Ocotillo residents now join the estimated 2,209 people experiencing homelessness in Pima County, according to numbers from the Tucson Pima Collaboration to End Homelessness. The data is based on the annual Point in Time Count of unsheltered people on Jan. 24.
They join the people behind the numbers and crisis showing that Pima County has seen a 300% increase in individuals experiencing unsheltered homelessness between 2018 and 2023.
However, many of the people who are now newly homeless in Tucson argue that none of this should have happened to them.
They had a home.
They want to know why no one from the city or state stepped up to make sure they could stay living under a roof — even if it wasn’t at Ocotillo — with their families and their pets, receiving the medical care they need.
For more than two weeks Arizona Luminaria has reported from the Ocotillo, speaking with residents living inside, and now outside, the building.
Many people said they feel like collateral damage in a government crackdown that is not their fault. They bore the brunt of the ultimate and heaviest consequences — a forced mass eviction that comes amid the fallout of investigations by law enforcement and the Arizona Health Care Cost Containment System, commonly known as AHCCCS, into fraudulent sober-living business owners involved in a statewide Medicaid scam.
Residents were targeted in a Medicaid scam
Joe, the former Ocotillo resident sitting on the curb with his belongings wondering where he’ll go next, is one of about 250 building residents who were victims of the Medicaid scam that placed them in the Ocotillo. Many participants are Native American people. They were lured into a fraudulent sober-living program operated by New Direction Behavioral Health with the promise of substance abuse help, housing and basic necessities.
“We joined the program so we can get help and then next thing you know we’re thrown on the streets,” Joe said.
How to help
• Donate money or supplies to mutual aid groups Community on Wheels and Community Care Tucson
• Donate to Community Bridges
• Donate money, supplies or food to Our Family Services
• Drop off hygiene supplies at the Ward 3 supply drive
New Direction Behavioral Health didn’t provide the promised services and Arizona’s Medicaid program, AHCCCS, suspended their payments on Sept. 15 after finding credible evidence that the program was a scam.
According to the AHCCCS list of suspended and terminated providers, the agency has suspended almost 300 programs this year alone.
Joe was caught in a scam in which program employees told people to switch their insurance to the American Indian Health Program to join New Direction Behavioral Health.
Officials with organizations like New Direction Behavioral Health recruit vulnerable people by offering them shelter, substance abuse help and daily necessities like meals, but don’t follow through while continuing to bill participants’ insurance.
Joe is Pascua Yaqui and said he didn’t discover his tribal affiliation until going through the paperwork to change his insurance.
Ali Kulumba, a program manager for New Direction, told Arizona Luminaria in September that the program, New Direction Behavioral Health, is responsible for charging residents’ insurance for participation in the sober-living facility, which has been targeted in the statewide Medicaid scam crackdown.
According to 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 sober-living program in Tucson — along with a healthcare company and a foreign for-profit corporation, Tamz Hope Home Care and Mercy Hands Human Services. The statutory agent for New Direction Behavioral Health is listed with the state commission as Odette Mucheso Mubalama.
Kulumba has told Arizona Luminaria that “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,” Kulumba said.
Now, the culmination of residents’ month-long battle to stay living at the Ocotillo — many who have been living there for about six months — is a makeshift encampment outside the building. People are homeless and without treatment or medical care.
Residents defend their right to stay at the Ocotillo
In early September, New Direction Behavioral Health clients living at the Ocotillo were notified by building management that they had seven days to leave after the program had ceased paying the hotel for two months and owed them more than $360,000, according to one of the Ocotillo’s general managers, Juan Cruz.
Program participants were caught off-guard by the demand.
Since then, they have been fighting eviction with help from Tucson attorney Billy Peard.
Peard argues that residents were legal tenants of the Ocotillo and building managers should have had to go through a formal eviction process to kick them out. Many people chose to stay in the building until they received a formal court order.
Xiaoqian Hu, an Associate Professor of Law at the University of Arizona, said it may be difficult to prove Ocotillo residents are legally considered tenants, which has significant effects on their legal protections.
“A tenant is entitled to habitable conditions in the house,” Hu said. “The code violations, for example, would show that the landlord has violated this implied warranty of habitability and the tenant is also entitled to an eviction proceeding.”
Hu stressed that tenants in Arizona have rights.
“The landlord cannot just kick the tenant away,” Hu said. “But these protections are not available for a hotel-guests relationship.”
Whether people living at Ocotillo Apartments and Hotel were guests or tenants has been a sticking point since the beginning of the dispute.
Regardless, fraudulent program operators tapped residents’ insurance money, so people in crisis could live in a sober-living facility that promised them stability. Meanwhile, unbeknownst to Ocotillo residents, operators siphoned their medical benefits.
New Direction Behavioral Health leadership failed to follow through on claims to provide a home for residents, as well as their partners and pets, access to medical assistance for their addictions, food and other basic necessities.
As the state suspended the program’s payments under Medicaid, residents told Arizona Luminaria that building owners and New Direction Behavioral Health operators offered them no indication there was a problem with their housing at Ocotillo. They also said that officials with New Direction Behavioral Health began tapering critical services without notice.
Building managers said their agreement with New Direction Behavioral Health was verbal. If that’s the case, UA legal expert Hu said that establishing Ocotillo residents as tenants may be difficult. Arizona laws relating to tenant/landlord agreements outline other limitations for a tenant classification, such as having exclusive access to a room, she said.
“Tenant means a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others,” Hu said.
Ocotillo residents told Arizona Luminaria that New Direction Behavioral Program employees sporadically shuffled them into different rooms.
Neither the program nor building officials provided documentation about people’s housing arrangements, they also said.
Because of this, Hu said state statutes outlining laws related to tenant and landlord relationships are probably not relevant to Ocotillo residents.
“I feel that this case would not be regulated by Chapter 10,” the Arizona Residential Landlord and Tenant Act, she said.
Rather, they’re more likely to fall under Chapter 3 of the Arizona property statutes which relates to hotels and long-term stays, she said.
City cites code violations in closing of the Ocotillo
On Sept. 26, Tucson City Court Judge Thaddeus Semon’s order stated that 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 gave Ocotillo residents “10 days” to “vacate the premises.”
The judge also recognized the housing shortage and homelessness crisis in Tucson, urging city officials to address the Ocotillo’s permits.
“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 order stated.
In the Ocotillo’s final weeks, building management began offering monetary incentives starting at $100 and then $200 for people to leave.
On Sept. 28, residents reported that they no longer had power, including air conditioning, amid triple digit weather.
According to city spokesperson Andy Squire, on that same day a code inspector revisited the property and found that electrical services and fire protection in the building “had been vandalized beyond any point that they could be quickly repaired to ensure occupant safety.”
In an email, Squire told Arizona Luminaria on Sept. 29 that they have not yet identified who vandalized the building.
Several residents, including Joe, said when the program put them in the Ocotillo, it was already in bad shape. Since then, he said, there have been long-running problems with their living conditions, including mushrooms growing on walls, drywall falling off the ceiling and a lack of hot water.
Residents said they lived like that for months, knowing they deserved better but with few other options for a place to live with their partners, pets and with a roof over their head.
Joe believes the city’s condemnation came at a convenient time for the Ocotillo to push people out.
“They did it with false intentions. They already knew that it was bad,” he said.
City property records show that Tucson officials knew for months there were problems with housing conditions at the Ocotillo.
On May 8, an inspection following a fire resulted in city code enforcement officials deeming at least 30 rooms “unsafe to occupy,” according to city property records.
Then city code enforcement officials conducted a follow up inspection on Sept. 13 — two days after the Ocotillo’s management began trying to kick out residents and four months after the fire damaged the property.
On Sept. 12, Tucson Police told Mari Vasquez, the city’s Multi-Agency Resource Coordinator, that the eviction of up to 200 people was possible at the Ocotillo and she started putting together a team, Vasquez said in a memo to the city council.
Squire said someone vandalizing the building’s electrical and fire safety system spurred the city to act on removing people from Ocotillo. Residents argue the city’s actions gave people less than a 48-hour notice to get out.
According to Squire, this action was in accordance with Tucson City Code Sec 16-63(d), which states “A structure declared unfit for occupancy and ordered vacated or to remain vacant under the provisions of this section shall not be leased, rented or occupied, and the utilities cannot be reconnected, until it has been inspected and deemed fit for occupancy by the city.”
Squire stated that the Ocotillo “building is no longer safe to occupy as it has no power or fire safety / prevention systems.”
He also said that the city considers the removal of residents in line with this code and irrelevant to the judge’s court order that gave people living at the Ocotillo 10 days to vacate.
“The court’s decision is unrelated to the current action that the city has had to undertake today. This is not an eviction,” Squire said. “We have to move forward with vacating the property as it is unsafe.”
Squire said the city coordinated service providers, outreach and shelter staff as a response to the evacuation because many residents had nowhere to go.
Squire added that non-profit organizations such as Community Bridges, commonly called CBI, and Our Family Services, were on site to help guide displaced residents to resources and help them find temporary housing. They also provided transportation to other locations.
Officers with the Tucson Police Department were also present, maintaining a perimeter outside the hotel and telling residents they had to leave. The police department’s human trafficking and sex crime units were also there to assist potential victims of such crimes.
There are ongoing police investigations into “predatory and criminal elements” at the Ocotillo, according to the Oct. 3 memo.
Where will Ocotillo residents go?
In her memo, Vasquez said no one was evicted by the city but some were evicted by the property owners.
The city of Tucson engaged with 153 Ocotillo residents, according to the memo. Of these, 21 individuals were “helped to move back to family and friend support structures,” the memo stated. Another 22 people went to detoxification facilities. And 24 people went to shelters, while 14 paid to go to another hotel. Three people who had been reported as missing Indigenous people “were identified and family members contacted.”
The city memo states that the remaining residents didn’t want help. However, Arizona Luminaria spoke with many of these residents who say that’s not the case.
They said they’re unhappy with how sudden their removal happened, with police on site, and that the city provided few permanent solutions to their housing struggles.
Joe said Community Bridges offered to shelter him in Phoenix — more than 100 miles from his community and people whom he can turn to. The terms of the offer taking him away from his hometown made him uncomfortable, he said
“CBI came in and they told me, ‘Well we can move you to Phoenix, we’re giving shelter in Phoenix but we’re gonna put you up in scrubs and we’re gonna evaluate you,’” he recalled. “Evaluate me for what? You know I’m not crazy.”
Community Bridges officials at Ocotillo declined to speak with an Arizona Luminaria reporter on site.
Ward 2 city council member Paul Cunningham is outraged by the exploitation at the core of the New Directions program. He said the city should step in and consider purchasing the building to provide services that New Directions failed to offer and to house people forced out of the building.
“If owners of this property are really complicit, then the building should be condemned and used for its original purpose as a sober-living facility,” Cunningham told Arizona Luminaria following Tuesday’s council study session.
The statewide action to shutdown sober-living facilities comes as cities and towns across Arizona are struggling with a growing number of unsheltered people and families, amid an affordable housing crisis and skyrocketing inflation for basic necessities such as food.
In Pima County, the needs outweigh the available support, according to a Sept. 15 report by the Tucson Pima Collaboration to End Homelessness.
“If we are to permanently end homelessness, significantly more resources are necessary,” the report states. “An additional 1,367 shelter beds and 4,901 units of supportive housing will be needed.”
Even with an increased shelter capacity, Arizona Luminaria spoke to multiple residents who feared staying in shelters that required separating them from their partners and pets.
At the encampment on Monday, people were working to keep the peace amid crisis, chaos and need.
About two dozen people have been sleeping in or near the tents since last Thursday. One man, apart from the others, was sitting on a broken curb and drinking silently from a plastic bottle of vodka.
Police cruisers pulled up and announced that people needed to clear out the tents, that they couldn’t stay there.
Antoinette, the 34-year-old who had been at Ocotillo for six months, said one of the police officers told her, “We’re not aiming to arrest you because of what you all are going through.”
Another woman, Esperanza, was wearing a leopard print dress and had just finished putting on makeup in one of the tents. She said that Tucson police officers’ promise to not arrest them was a “small comfort.”
Esperanza was caring for her turtle at the encampment. She’d moved her pet from the aquarium she had in her apartment at Ocotillo to a small cooler by her side on the streets.
A home health care nurse, Shelley, was helping an older man who was living in Ocotillo. The man’s name is James Brown — “Good name, huh?” Shelley said. She hadn’t heard from him since Thursday.
“I don’t know where he went, I think he’s in the streets,” she said.
“I’ve been living out like that,” she said. “I know what it’s like. I’m worried about him. Look what they’ve done to them.”
Gabriel chimed in and says he thinks someone picked up James a day or so ago to take him to the Veterans Hospital. Shelley seemed relieved, for a moment.
“What these people need is food,” she said. Another man added, “And housing!”
On Tuesday, James showed up with about 10 of his former Ocotillo neighbors and several housing rights advocates to speak to elected officials during the call to the audience at the Tucson City Council meeting.
They wanted to make clear to Mayor Regina Romero and council members that the city has failed them and temporary shelters are not a solution when it means abandoning their beloved animals.
Others wanted Romero and the council to know that some offers for shelter that only accepted people of the same gender came with a heavy price — separating them from their loved ones.
“I can’t speak on behalf of my peers. I don’t know about them, but about myself — I’m sick and tired of being promised stuff and then to be told I’m just an addict and just to be tossed out like a piece of trash,” said Chris Olivera, a former Ocotillo resident.
Five days earlier, on the Friday before people started building encampments outside their former homes at Ocotillo, Joe’s friend finally arrived to pick him up.
Joe stood up, readying to leave. They gathered his belongings off the curb.
Like people speaking at the city council meeting, the pair were at a loss for where to go next.
“There’s no reason why we the residents here should be suffering, they should post us up somewhere else, you know?” he said. “That’s the way I see it.”
As Joe pushed his cart, his friend vented in frustration. The two men walked away side by side, Joe with his head bowed against an uncertain future.
Credits
Reporter John Washington contributed to this article.
Visuals: Michael McKisson Editor: Dianna M. Náñez Copy Editor: Becky Pallack
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