The Ocotillo Hotel and Apartments — the former site of a fraudulent sober living program — may become low-income housing once the city approves it for rental, Selene Milroy, the building’s general manager, and Juan Cruz, the building’s project manager told a judge at a hearing in Tucson City Court Tuesday.
The court hearing stems from a citation from the city of Tucson in March over code violations.
Cruz said they anticipate going through the process to utilize the property for Section 8 housing after reaching full compliance with code enforcement.
Ernesto Portillo, the public information officer for Tucson’s Housing and Community Development Department — which manages the city’s Section 8 program — told Arizona Luminaria Tuesday that they’ve had no contact with Ocotillo management about using the property for Section 8 housing.
Milroy told Arizona Luminaria after the hearing that they were also looking into working with other agencies to help provide housing.
“I have many connections and a good reputation among multiple organizations,” she said but didn’t specify the agencies or organizations. Milroy and Cruz were unwilling to answer any other questions.
Hundreds of people landed on the street in October after the state suspended the sober-living program they were enrolled in and the city condemned the building due to code enforcement finding that electrical services and fire protection “had been vandalized beyond any point that they could be quickly repaired to ensure occupant safety.”
Milroy, the building’s general manager, told Judge Thaddeus Semon they’ve made significant progress on fixing the property which contains 136 units.
“It has all gone well,” Milroy told the judge.
Elizabeth Tidwell, a city code enforcement officer, told the judge she was pleased with their progress and expects the building will be up to code by April.
“They’ve done what they’ve been asked to do,” she said.
Up to 250 displaced residents that were living at the Ocotillo were part of New Direction Behavioral Health, a fraudulent sober-living program that lured in vulnerable, mostly Native American people, with the promise of substance abuse help, housing and basic necessities.
New Direction Behavioral Health didn’t provide the promised services and Arizona’s Medicaid program, AHCCCS, suspended their payments to the program on Sept. 15 after finding credible evidence that the operation was a scam. That month, building management gave residents in the program only weeks to leave after months of New Direction Behavioral Health not paying for their housing.
Management’s decision cast a spotlight on operations at the Ocotillo, bringing to light the building’s derelict state and history of code violations and complaints.
At the Tuesday hearing, Judge Semon asked defendants about the attention in the news and Milroy responded by saying it had mostly died down.
Semon also commended Cruz and Milroy on their intention to use the property for affordable housing.
“Everybody deserves dignity,” Judge Semons. “Thank you for what you’re doing for the community.”
City property records showed 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.
Former Ocotillo residents fought the eviction but ultimately a vandalization rendered the building uninhabitable and resulted in a court order to evacuate it in less than two days.
The judge scheduled another hearing for April 11 which he said he’d cancel if the property is ready before the next court date.
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