A hotel in Rockland County was the focus of fury last year when New York City announced plans to move some of the migrants in its care to hotels in upstate, triggering waves of resistance in New York.
The city’s first lodging option would be the Armoni Inn & Suites, off Route 303 in Orangeburg, which had already reached an agreement to house asylum seekers and was preparing for their arrival. A court order quickly blocked those plans, setting the stage for a legal fight that continues to this day and preventing the hotel from boarding any migrants.
But that didn’t stop the company that booked the Armoni Inn from charging the city for at least two months for rooms it never used – and pocketing its share.
It turns out the city paid $833,340 for empty rooms at the Armoni for all of May and June 2023, aaccording to an audit released last week by New York City Comptroller Brad Lander. DocGo, a company hired by the city to reserve hotels for migrants and oversee their operation, charged that amount for 61 days without accommodation and withheld $343,140 of the payment as a commission.
The audit looked at bills from just those two months, so it’s unclear whether DocGo continued to bill the city for Armoni after June. DocGo and the city agency that paid the bills — the Department of Housing Preservation and Development, or HPD — did not respond to this week’s questions from the USA Today Network about when Armoni’s bills ended.
In an emailed statement to the USA Today Network, DocGo said the majority of its charges were used to pay subcontractors and local businesses, and went toward a good cause: ensuring that “families coming to the city of New York receive the support they need.” He was credited with serving 32,000 asylum seekers in multiple hotels, providing shelter, medical and social assistance appointments, and “millions of meals.”
“Our collaboration illustrates how private companies can be an essential partner for municipalities, allowing them to respond quickly to complex emergencies”, reads the statement.
Charges for empty rooms continued after Rockland hotel was banned
HPD told auditors it paid for the empty rooms at the Armoni Inn because the temporary order that initially prohibited its use “could be lifted at any time,” allowing the city to take in migrants, according to the report. But he gave no evidence that he had agreed with DocGo to “block and pay for the rooms for a period of two months” while the case was pending.
The audit ignores another flaw in HPD’s response: that Armoni Inn billing continued after a subsequent court ruling made clear it could not be used.
This happened when a judge issued a preliminary injunction on June 12, 2023, that prohibited the use of the Armoni Inn during the legal process, as Journal News/lohud.com reported at the time. And yet, the accusations of empty rooms continued until at least June 30th – another 18 days.
The Armoni uproar erupted in early May 2023, when New York City Mayor Eric Adams told local authorities for the first time that migrants would soon move into the hotel. Both Rockland County and Orangetown sued to block the city, arguing the plans were illegal. Similar lawsuits have occurred in Orange, Dutchess and Onondaga counties, where other hotels have been built.
As these and other counties rebelled, others, such as Westchester and Monroe, welcomed the newcomers or refused to fight the city’s plans. Ultimately, the city placed about 2,200 migrants in 14 hotels in seven upstate counties and never went beyond that. It continues to use these hotels, but the number of asylum seekers it hosts fell to around 1,800 in June this year.
Local outcry: Plan to house asylum seekers at Rockland hotel could be blocked by county executive order
Complete guide for rooms that have been empty for more than two months? US$1.7 million
The city paid for many more empty rooms during those two months. All 335 rooms at the Crowne Plaza JFK in Queens were unoccupied for 10 days in June, for which the city received $569,500. Nine days of unused rooms at the Crossroads Hotel in the city of Newburgh a month earlier cost the city $96,900.
In total, the city shelled out nearly $1.7 million for empty rooms in eight hotels. DocGo cutoff: $408,680.
“The city paid for 9,874 unused hotel room nights with zero occupancy during May and June 2023,” the report says. “While auditors agree that it is necessary to maintain a state of readiness, appropriate documentation is essential to verify that expenditures are legitimate and to ensure fiscal accountability to the city, which DocGo did not provide.”
DocGo’s made its commissions by keeping the difference between the fixed amounts the city agreed to pay and the amount charged by the hotel or supplier. The city agreed to pay $170 a night for each hotel room. The Armoni and other hotels charged DocGo just $100 per night, which represented the company’s large revenue.
Were taxpayers held responsible for the costs of the city’s hotels?
Yes – New York City taxpayers bore the brunt of this waste. But all New Yorkers paid a share.
The state has so far spent $750 million on migrant housing, including subsidies it gave the city to cover some of its huge expenses, according to the state comptroller’s office. New York City’s migrant spending totaled $4.3 billion at last count.
City auditors suggested that HPD require hotels and DocGo to return what they received for empty rooms.
“Unless HPD can demonstrate that it provided pre-authorization to maintain and pay for unoccupied rooms, the claimed costs and associated profit paid to DocGo must be recovered,” the report says.
Low impact: New York first transferred asylum seekers to the Upstate in May. What is happening in these hotels now?
What else did the DocGo audit uncover?
The audit analyzed the accounts for just those two months – $13.8 million in expenses that represent a slice of the $181.9 million DocGo has billed the city so far. DocGo, a medical services company, was hired without a bid last year to help the city house and care for the thousands of asylum seekers who were constantly arriving by bus. The company now holds several contracts with the city.
Empty hotel rooms represented 12% of expenses in those two months.
The audit alleged a number of other flaws. One of their claims: DocGo overbilled for security by $2 million by placing more than one private security officer in a hotel without permission. At the Crossroads Hotel in Newburgh, for example, DocGo billed 21 agents on a single day in May, shortly after the asylum seekers arrived. This cost an additional $8,325, including the $2,479 portion that DocGo retained, according to the report.
Chris McKenna covers government and politics for The Journal News and USA Today Network. Contact him at cmckenna@gannett.com.
This article originally appeared in the Rockland/Westchester Journal News: NY audit reveals thousands spent on empty hotel rooms for migrants
