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NYC now preparing to spend staggering extra $1B on hotels alone to shelter migrants for three more years

New York City is preparing for the worst — extending its contract with local hotels to help house migrants for up to three more years at a staggering added cost of more than $1 billion.

And the revised contract’s projected new total $1.365 billion price tag — nearly five times what the original deal called for — would just pay the rental fees to more than 100 hotels converted into emergency migrant shelters.

It doesn’t include the cost of city facilities and other rented sites housing homeless asylum seekers pouring into the Big Apple by the thousands every week.

Critics — including even some Democrats — raged that the Adams administration’s contract with the New York City Hotel Assocation, which is set to be extended from this year through August 2026, reeked of a taxpayer giveaway. 

“Why are we extending this contract for three years? It sends the message of not wanting to reduce this migrant population,” said Nicole Gelinas, a senior fellow with The Manhattan Institute.

Gelinas said the city created “one big monopoly” by giving the hotel industry an overarching contract without competing bids that could lower costs.

Democratic Queens Councilman Robert Holden seethed, “The migrant crisis has evolved into a financial boondoggle, with quietly extended contracts fattening the pockets of a few at the taxpayer’s expense.

eric adams
James Messerschmidt for NY Post

“It’s time to halt this fiscal recklessness. Let’s send those [migrant] buses to the White House and remember that ‘Right to Shelter’ shouldn’t be misconstrued as a global entitlement,” he said, referring to New York City’s law guaranteeing shelter to the homeless, including asylum seekers. 

A spokeswoman with the city Department Department of Social Services/Homeless Services told The Post on Monday, “For over a year now, the city has worked to address this humanitarian crisis with an all of government approach, and with thousands of asylum seekers arriving each week, we are constantly reassessing our needs.

“This proposal for contract extension is designed to provide capacity as needed, but it also provides the flexibility to scale back or terminate if circumstances on the ground change.”

It was unclear Monday if the fat hotel contract is part of the estimated total $12 billion that Mayor Eric Adams has said the migrant crisis could cost the city over three years — absent additional financial aid from Washington and Albany. 

The hotel extension could cost more than $1 billion.

The billion-dollar revelation surfaced during a City Council hearing last week when Councilwoman Julie Won (D-Queens) asked officials with Adams’ administration about the extension of its contract with the Hotel Association of New York City from the current $237 million for 2023 to the eye-popping $1.365 billion through August 2026.

The hotel association is the fiscal agent that doles out the city rental fees to individual hotels that have agreed to take in migrants.

Won, who chairs the contracts committee, asked why city officials decided to renew the contract for several years.

DSS Commissioner Molly Wassow Park responded, “We have dramatically slowed the pace of growth of our hotel footprint. But we also know it will take some time to transition to other kinds of shelters.

julie won
Stefan Jeremiah for New York Post

“So we are extending those hotel contracts. We want to do it one time instead of year-by-year so we have some predictability. It helps manage our contract workload, and there are cancellation clauses,” she said of the multiyear extension.

In other words, the $1.365 billion figure is not guaranteed: If the city no longer needs the hotels, it can stop or reduce the rental payments in the contract.

Adams has close ties to the hotel industry. The union representing 31,000 hotel workers — the Hotel Trades Council — was one of the first unions to endorse his campaign for mayor in March 2021.

NYC Hospital Association CEO Vijay Dandapani said he hasn’t seen the contract-extension details yet but added that the projected $1 billion-plus cost could significantly decrease if the migrant population drops and fewer hotels are needed.

Robert Miller
The revised contract’s projected new total $1.365 billion price tag would pay the rental fees to more than 100 hotels converted into emergency migrant shelters.

“It’s unfortunate. The migrant crisis will last at least another year — for sure. We never envisioned this,” Dandapani said of the humanitarian disaster.

He noted that the hotels were used by the city for 18 months during the COVID-19 pandemic to help prevent the spread of infections among homeless individuals who were in crammed shelters and relocated to the hospitality businesses.

“The hotel industry has the infrastructure to cope with the crisis,” he said.

Dandapani acknowledged that for some hotels that were empty or lost business during the pandemic, the migrant crisis has been a blessing in disguise. The city is paying to fill all their rooms with migrants..

The average cost the city pays hotels on average is $185 per day, Dandapani said.

“It’s helpful for the hotels that are doing it. Every hotel that is taking in migrants is doing so voluntarily,” he said.