It’s been more than 15 months since U.S. Rep. Diana DeGette and Mayor Michael Hancock announced plans to use $2 million in federal money to turn a northeast Denver hotel into housing a homeless shelter.

Despite regular talks with Denver officials, the property owner said the city does not have the vacant hotel under contract and it still could become something other than a shelter if the city does not act.

“I have had conversations with the city, but their process is a long one,” said Hugo Weinberger, co-founder of IH Holdings, the entity that owns the property. “If the city doesn’t buy it, I likely would look to reopen it as a hotel. Somebody else might buy it as well.”

Despite the long wait, Hancock remains confident the property formerly known as the Stay Inn will be part of the city’s options for helping people transition out of homelessness. Hotels and motels have become a key component of the city’s rehousing efforts.

“By acquiring hotels like the Stay Inn and using them as a bridge to something more permanent, we can help unhoused residents into more stable housing and off the streets,” Hancock said through a spokesman on Tuesday. “While (Department of Housing Stability) is undergoing due diligence on the property, we look forward to adding the Stay Inn to our rehousing toolbox.”

The Stay Inn, approximately built in 1979, is at 12033 E. 38th Ave. in Denver’s Central Park neighborhood. City records show IH Holdings bought it for $3.8 million in 2019. IH Holdings’ original plan was to clean up the property and reopen it as a Travelodge, a hotel chain operated under the Wyndham Hotels & Resorts umbrella, Weinberger said.

In announcing the federal funding request last year, city officials estimated it would cost $7.8 million to buy the 94-room hotel and covert it into a shelter with room for up to 200 unhoused people. After a few years as a shelter, it was expected to transition into supportive housing providing access to mental and behavioral health support for 150 residents.

DeGette included the $2 million ask as part of a community projects funding request sent to the House Appropriations Committee last spring, according to a news release from her office. After making its way through the congressional process, the money was approved in March, a DeGette aide said this week.

“Studies have shown that when people experiencing homelessness are moved into hotel-like facilities, both their mental and physical health begin to improve,” DeGette wrote in a guest commentary that ran on the Denver Post website on May 15 last year. “They are also more likely to move into more permanent housing when they leave such facilities, compared to those who seek refuge in a transitional shelter.”

Denver’s Chief Housing Office Britta Fisher floated the idea last spring that the hotel could be reopened as a shelter before the end of 2021. She also discussed the possibility that people would be allowed to live there with their pets and couples would be allowed to share rooms, two of the primary barriers keeping people out of traditional shelters in Denver.

The long delay in the purchase can be attributed to the use of federal money, according to Denver officials. The city has launched an environmental review process required by the U.S. Department of Housing and Urban Development.

“Once this HUD review process is completed, we anticipate presenting a purchase agreement to Denver City Council for approval in the months ahead in 2022 or early 2023,” city housing department spokesman Derek Woodbury said last week.

Homelessness is a growing crisis in the Denver area. According to the 2022 point-in-time count data, the Metro Denver Homelessness Initiative released last month, the number of people staying in homeless shelters or on the streets in the seven-county metro area rose 12.8% — to 6,888 from 6,104 — from 2020 to 2022. The one-day count was performed Jan. 24 after the pandemic hampered counting efforts in 2021.

A majority of the people counted this year, 4,798, were living in Denver. That’s a 15% increase over the 4,171 unhoused people counted in the city during the point-in-time survey in 2020.