The migrant crisis that brought thousands of families from violence-torn countries such as Haiti and Venezuela to Massachusetts has strained local governments, from schools to emergency responders, and helped drive up the cost of emergency family housing to nearly $1 billion last fiscal year. But it has been a boon to the more than two dozen hotel companies that locked in contracts for the state shelter program.
The emergency shelter network for homeless families relies heavily on private hotels. The owners of the Methuen hotel — a family who built Lexington-based Jamsan Hotel Management — were paid $7.5 million over a year, even as city health inspectors documented more than 330 violations, including rodent activity and bedbugs, mold and water damage.
The costs have led residents and local officials to question whether state officials, in their rush to protect families from sleeping on the street, committed to contracts that are more costly than they’re worth. The Emergency Assistance program is not meant to boost local businesses, but to avert individual and public emergencies, noted one Methuen City Council member.
“No one should be profiting from this crisis,” said Councilor at Large Nicholas DiZoglio.
State housing officials defended the expenses, noting they scrambled to find rooms quickly.
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“We negotiated at the time for the best rate we could achieve,” said Chris Thompson, undersecretary of the Division of Housing Stabilization at the Executive Office of Housing and Livable Communities. “We were seeing an unprecedented demand on the [Emergency Assistance] system and our goal was to shelter families.”
The Globe examined two hotel groups that appear to be tied to the most shelter contracts with the state, with nine hotels each. The Patel family that owns Jamsan, and limited liability companies they formed with other partners, had state contracts worth nearly $35 million calculated through an analysis of financial documents and costs provided by the state. Giri Hotel Management, along with firms affiliated with its executives, had contracts worth an estimated $79 million during that time for both hotel rooms and food service.
Executives from both hotel groups declined interview requests from the Globe.
The contracts have turned some far-flung suburban hotels that had been suffering from a pandemic slump into profit centers. Hotels that were often only partially booked are now at full occupancy — sometimes at steeper rates, thanks to the state’s payments. The contracts even flowed into dated buildings that were suffering from water damage and riddled with mold, such as the Brighton motel now known as Catholic Charities Inn, managed by a Jamsan executive, Nikul Patel.
And low-income tenants who had previously been living week to week at several hotels complained that the owners tried to drive them out, sometimes by doubling their rent, to make way for the families coming via lucrative state contracts, according to news accounts and interviews.
A deal with the state was bound to be attractive to hoteliers with underperforming properties — including those that needed upgrades or were struggling to attract guests, even at discount prices, hospitality consultants said. The downside is that the maxed-out hotels will need major improvements after the shelter program ends from wear-and-tear due to so many long-term tenants and they will likely have to spend money luring back travelers, who have come to think of it as a homeless shelter.
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“If there’s an opportunity to get a [long-term] contract, it’s a great day,” said Rachel Roginsky, owner of Pinnacle Advisory Group and a hospitality consultant. “They’re doing it because they want to make a profit.”
The deals, however, do raise questions about whether the state could have negotiated better prices while still allowing the businesses to make some profit as they partnered with the government through the crisis, Roginsky said.
“Could the state negotiate a lower rate and they still make a profit?” Roginsky said. “I don’t know.”
A Globe analysis of nightly rates found the state is paying above-market prices for shelter at most of the properties of the two hotel groups examined. That analysis was based on rates gathered from contracts and state officials, and compared with data provided by CoStar, a commercial real estate analytics and news platform. CoStar shared data with the Globe for several regions of Massachusetts showing the 12-month moving average daily rate for hotels generally for each of the past three years ending in June.
Four of the nine Patel-owned properties and all of the Giri-affiliated hotels appear to be priced higher than the average daily rate, the Globe found. Most of the hotels tied to Giri executives were only slightly higher than market, but even small differences can dramatically inflate costs when so many rooms are rented for so long, hospitality experts noted.
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With 101 rooms booked at Giri’s Rockland hotel, for instance, $5 added to the market rate would cost the state an extra $505 a day — $184,325 over the course of a year.
Jamsan executives declined to answer questions submitted by the Globe.
Giri founder Ashish Sangani also declined to comment. A public relations firm working for the company said the hotelier got involved at the state’s request but declined to comment about the room rates.
“State officials reached out to us for help to meet the critical need for housing of migrant families arriving in Massachusetts,” public relations consultant George Regan said in a statement. “We will continue our work to develop new and impactful ways to care for our guests in an effort to ease their transition into American life.”
Hoteliers likely benefited from the state’s desperation. Until recently, political leaders have interpreted Massachusetts’ unique right-to-shelter law to mean the state is obligated to provide emergency housing to pregnant people and families with children, including the thousands of families that have been arriving from other countries. The state has long rented hotel rooms to supplement shelter space when necessary, but the need has never approached this magnitude. Governor Maura Healey’s predecessor, Charlie Baker, sought bids for hotel contracts in early 2022 after an influx of more than 11,000 migrants and an uptick in homelessness locally. But the request attracted little interest, so the Baker administration sought hotels through a broker, with wider contacts in the state hospitality industry, without going out to bid.
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Bob Clement, a consultant with Park Lodge Hotel Group, which was paid to help the state find rooms, recalled the panicked requests he got in the summer of 2022.
“The need went kind of nutty,” Clement said.
The state also reached out to hotel owners who had previously been partners in times of need, said Thompson, the undersecretary for housing stabilization.
Few companies were as well positioned as Jamsan. The Patel family had its hotels approved for use as shelters for the homeless during the pandemic. They also own the Roundhouse hotel, near the Boston intersection known as Mass. and Cass that had become the epicenter of the city’s drug activity. That hotel was used as a homeless shelter during the pandemic and later, despite neighborhood objections, as a home base for addiction treatment services.
The homeless crisis only intensified after Healey took office, with the expiration of pandemic restrictions on border crossings, efforts by Southern governors to send migrants to Democratic states, and an increase in evictions locally. With migrants huddled in Boston Medical Center and sleeping on the floor at Logan Airport, state officials were overwhelmed, working through nights and weekends to find available rooms for families. Later contracts were put out for bid, and the prices varied.
Thompson said the team always tried to negotiate fair rates, turned down some proposals that were unworkable, and revised contracts when possible. The nightly rate for the Methuen hotel, for instance, is now down to $150.
The promise of steady payments from the state, however, may have pushed out other renters who had been living in the hotels long term and paying week to week.
Boston 25 News reported that tenants were forced out of the Jamsan-tied Best Western in Concord to make way for the state’s lease. And tenants at their Yarmouth Resort received warnings that rates would more than double shortly before the governor announced migrants were moving in, the Cape Cod Times reported. (A spokesman for the housing agency told the newspaper at the time that the Healey administration “seeks to ensure that no residents are displaced as a result of our efforts to house families in crisis.” The Yarmouth Resort was not used as a shelter, though the state subsequently signed up to use other Jamsan-tied hotels.)
Other hotel owners also tried to remove long-term residents. In July 2023, the Motel 6 in Danvers, owned by Hare Krishna Danvers Hotel LLC, sent notices to more than a dozen long-term, paying guests informing them they had a month to vacate their rooms, as the hotel would be part of the state’s shelter program, the Salem News reported.
“It wasn’t right,” said Dawn Oliva, 54, who had lived there with her husband for two years.
After Oliva and others complained to city and state representatives, the hotelier told residents that they could remain. But Oliva found an apartment that didn’t require expensive upfront payments last fall and moved out of the hotel.
The state did not want longstanding tenants displaced, Thompson said. Still, the agency did not broadly prohibit this practice in its contracts.
“When we learned of those situations, we worked with hotel owners and with communities as well to try and address them and support families,” Thompson said.
Though state contracts are funded with taxpayer money and would typically be publicly available, administration officials have withheld the names and locations of hotels that have been used as shelters, citing a need to protect the privacy of the homeless families being placed there and anti-immigrant protests that have targeted residents and staff. To assemble this report, the Globe had to independently identify the hotels being used as shelters, track down the owners, and correlate hotel sites with heavily redacted contracts or pricing information obtained from state officials. The Globe also obtained public records from city and town building inspectors and health departments to report on the conditions of the hotels.
Until the migrant and homelessness crisis overwhelmed the state, little was publicly known about Jamsan and Giri. Both companies were founded by Indian immigrants — nationally about 60 percent of hotels are owned by people of Indian descent, according to a report by the trade group, Asian American Hotel Owners Association.
Jamsan is a loosely connected hotel empire of limited liability companies owned by Patel relatives and partners.
Based in an unassuming office park not far from Hanscom Air Force Base, the company has been operating in New England since the 1990s. According to its website, Jamsan operates 70 hotels, along with coffee shops, convenience stores, and gas stations. The Patels have built a reputation of operating budget and mid-priced hotels.
“Our ability is to look at a property and add value to it,” Jamsan vice president Ashok Patel told a Fall River newspaper in 2018. “We look for properties that have medium performance because of its condition or its management.”
It has been a profitable strategy.
Jamsan president Dilip Patel, his nephew, Ashok, and son, Nikul, are all listed among the owners of a family estate that was carved into a modest Lexington neighborhood 10 years ago after the family amassed several adjacent properties. The gated mansion, assessed at $7.7 million, has a game room, a home theater, and 12 bathrooms, according to assessing records.
Giri’s founder, Sangani, is also an Indian immigrant who early on partnered with Dilip Patel on a Quincy hotel. Sangani now owns a $1.7 million home with a pool and basketball court, and a panoramic view of Quincy Bay.
The Giri-owned and -managed hotels that have been used by the state as shelters are almost all on the South Shore, and most are of more recent vintage. Their inspections show few glaring problems, though two have had recent complaints of bedbugs. The Rockland hotel, which was the site of an alleged rape of a teenage migrant last spring by another migrant, was also ordered earlier this year to replace all its sprinkler heads after failing several quarterly fire department inspections.
Both hotel chains have more upscale properties, in addition to their lower-priced offerings, and have reputations as smart hoteliers, said hotel broker Mitchell Muroff, owner of Muroff Hospitality. “They have some beautiful hotels,” he said, “and they have some hotels that are not so beautiful.”
With many of their Massachusetts hotels in regular use by the state, both companies have been growing their business. Just this year, Giri has announced three new hotel projects in New England, including a plan to operate two hotels with 350 rooms in an ambitious development in Burlington, Vt.
As it benefits from millions of dollars in state contracts, Jamsan has pivoted to more upscale properties. It has acquired several iconic New England hotels, including the Red Jacket Inn in Conway, N.H., the Daniel Webster Inn & Spa in Sandwich, and the Capitol Plaza in Montpelier. The company has also entered the Florida market with the recent purchase of two hotels.
Meanwhile, the company has let some of its properties used as shelters during the pandemic and again during the migrant crisis fall into disrepair. The state evacuated migrant and homeless families from the Brighton shelter this past spring for a mold remediation, sending them to another Jamsan hotel in Woburn. The Roundhouse hotel in Boston is vacant, surrounded by chain link fence, with several windows missing or boarded up.
And the city of Methuen last fall fined the company $46,600 for failing to comply with orders to eliminate pests and correct water and electrical problems while migrants were living at their hotel there. City officials said that conditions at the hotel have since improved.
That has led some to question the value the state is getting for its deep investment in private hotels. The $7.5 million paid to rent rooms in the Methuen hotel in the last year was higher than its property value, which is assessed at $5.6 million.
“All this money is being thrown around on this homeless issue,” said Methuen Mayor Neil Perry. “I don’t know if it’s been thrown around in the right direction.”
Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her @fernandesglobe. Stephanie Ebbert can be reached at Stephanie.Ebbert@globe.com. Follow her @StephanieEbbert.
