NYC Cutting Ties with Troubled Homeless Services Provider Aguila, Inc.

The city’s Department of Homeless Services (DHS) said it will stop contracting with Aguila to run the men’s shelter inside the Park View Hotel on West 110th St., across the street from Central Park, by the end of the year as it seeks to weed out inadequate providers.

New York City is kicking shelter provider Aguila, Inc. out of a Harlem hotel for homeless men and cutting ties with the troubled nonprofit, City Limits has learned.

The city’s Department of Homeless Services (DHS) said it will stop contracting with Aguila to run the men’s shelter inside the Park View Hotel on West 110th Street, across the street from Central Park, by the end of the year as it seeks to weed out inadequate providers. The Park View is the last site run by Aguila, once one of the city’s largest homeless shelter operators with dozens of facilities in Manhattan and the Bronx.

A DHS spokesperson said the building, which is owned by the notorious Podolsky family, may still function as a shelter run by a different nonprofit. The city does not appear to have issued a request for proposals for a new shelter operator at the site.

The decision comes amid an ongoing audit of the city’s sprawling shelter system, commissioned by the mayor in February, following a New York Times investigation into allegations of rape and bribery against the head of another major shelter operator, Bronx Parent Housing Network.

Aguila CEO Ray Sanchez said he did not know about the city’s decision until he was contacted by City Limits, but said his company would “[cease] to exist without New York City contracts.”

Sanchez, the former counsel to Bronx Borough President Ruben Diaz Jr., took over Aguila in 2020 after the previous agency head was fired while the state attorney general conducted an investigation into allegations of financial crimes and bribery. He sought to reform the organization, he said.

He said Aguila worked with the city to establish a new type of pandemic-related facility at the Park View: a “pre-assessment” shelter housing men who may have been exposed to COVID-19 before they are assigned to shelters for longer stays elsewhere in the city. The former single-room occupancy hotel is currently known as the Jardin Central Pre-Assessment Shelter and earned “significant praise” from city officials, Sanchez said.

He said he met in October 2020 with senior city officials who informed him “that almost all of Aguila’s contracts would be canceled or reassigned to other providers except for the ‘Parkview  Inn/Jardin Central Pre-Assessment.’”

“Nevertheless, the city expressed a willingness to work with Aguila at new sites,” he added in a statement. “To that end, I took several important steps to rehabilitate Aguila, such as implementing new financial controls and recruiting three upstanding attorneys to Aguila’s Board.”

Prior to the pandemic, the 110th Street building served as a shelter for adult families. It was the frequent subject of tabloid reporting.

One resident who spoke with City Limits outside the building Monday said men sleep in single rooms and share bathrooms in the 205-unit property overlooking Central Park. He said he arrived Friday and was informed that he would be moved to another shelter as early as Wednesday, as is common at the transitional site.

Three staff members who spoke with City Limits while entering or exiting the building Monday said they had not heard of any upcoming changes at the shelter.

Less than a decade ago, Aguila ran more than 40 shelters for single adults and families with children. The troubled but politically connected nonprofit managed to win contracts totaling more than $250 million since 2012, despite scathing accounts of financial mismanagement and unsafe conditions uncovered by the city comptroller’s office.

“In light of the repeated and systematic failures, DHS should discontinue its use of Aguila,” then-Comptroller John Liu wrote to Mayor Michael Bloomberg in 2013.

At the time, Aguila was led by former DHS Commissioner Robert Hess and frequently provided services in shelters, like the Apollo Hotel and the Aladdin Hotel, owned by the Podolskys and their associate Alan Lapes. Those landlords have been accused of failing to maintain their buildings and driving tenants out in order to land lucrative city shelter contracts.

After Liu’s report, the nonprofit continued to score major contracts despite its reputation for shoddy services and hazardous conditions.

A 2019 audit by state Comptroller Tom DiNapoli’s office looked at five of the 24 shelters Aguila ran at the time. The inspectors rated conditions “poor” at two of the sites and “very poor” at three, where they found cockroaches and rodent feces inside an oven, a mangled floor covered in plywood, broken appliances and a missing fire extinguisher. New York City Comptroller Scott Stringer’s Office inspected 10 Aguila shelter units during a 2020 infant safety audit report. They documented “Safety and Health Concerns Due to Unsafe Sleep and Inadequate Unit Conditions” at all 10.

Aguila received $56.1 million from the city in the 2014 fiscal year, the year the Bloomberg Administration gave way to Mayor Bill de Blasio’s. Aguila continued contracting with the city under de Blasio, including agreements totaling $47 million in the 2018 fiscal year and $36.4 million in the 2019 fiscal year, the comptroller’s contract database checkbook.nyc shows. Aguila received $16.5 million last year and has so far taken in $6.9 million during the current fiscal year, which began July 1.

In addition to accusations of substandard services, Aguila has in recent years been embroiled in a legal dispute with another provider and a criminal probe targeting its former top executive. Ex-CEO Jenny Rivera was fired last year after Attorney General Letitia James’ office investigated her for bribery, money laundering and falsifying business records. James’ office declined to comment on the status of the case, or say whether the investigation is still underway.

Before her ouster, Rivera complained in an open letter to de Blasio about the city’s efforts to “systematically dismantle Aguila” by rejecting their contract bids and citing them for poor conditions. Rivera was replaced by Sanchez, who ran unsuccessfully for City Council in Manhattan’s District 7 earlier this year.

DHS’ systemwide audit of its shelters could lead to even more shake ups. The agency’s First Deputy Commissioner Molly Park described their strategy for ending contracts with problematic providers during an April 30 City Council hearing about the audit.

“These ongoing transformation efforts include phasing out certain providers who do not meet our high standards of service and care, and our comprehensive review of all providers and contracts continues,” Park said.

She noted that the city had ended its relationships with four shelter operators that oversaw egregious conditions, particularly inside cluster site shelters. They include the organizations We Always Care, Housing Bridge, Bushwick Economic Development Corporation and Children’s Community Services.

“We are four years into addressing a problem that built up over 40 years, overhauling the way we do business top to bottom, including removing noncompliant providers and building a bench of qualified and experienced new providers, while also meeting our legal and moral obligation to shelter all those who need it every single night,” Park added.

Advocates say they hope the audit will foster a safer shelter system and more moves to permanent housing. There were 45,616 people, including just 8,495 families with children, staying in DHS shelters on Sept. 27, according to the city’s most recent census.

“The right to shelter is a vitally important part of the city’s safety net, and we support oversight efforts to ensure that homeless New Yorkers are provided with safe, accessible, and clean shelters with services that meet their needs,” said Coalition for the Homeless Senior Policy Analyst Jacquelyn Simone.

“The city must also redouble efforts to prevent homelessness before it begins and to move people out of shelters and into permanent affordable housing as quickly as possible, which will allow for a smaller, more person-centered shelter system,” she added.