Clash over contract kills plan to move homeless into Berkeley hotel

La Quinta was set to open Friday as a respite for homeless individuals in Alameda County, including many who live in Berkeley, but now the deal is dead. Each side holds the other responsible for the breakdown.

La Quinta in Berkeley won’t be part of Project Roomkey as of this week. Image: Google Street View

Berkeley’s La Quinta Inn was set to open Friday as a respite for homeless individuals in Alameda County, including many who live in Berkeley, but now the deal is dead.

Last week, the city of Berkeley said 113 beds at La Quinta would be available in early May for unsheltered people without COVID-19 symptoms. The hotel would have been part of the state’s Project Roomkey program to help people on the streets move into safer conditions during the ongoing coronavirus pandemic. As of this week, the state has already secured nearly 13,000 beds for people who don’t have permanent homes.

But, for now, Berkeley won’t be part of that plan. La Quinta owner Peter Khatri told Berkeleyside on Friday afternoon that Alameda County — which had been set to run the program with support from the city of Berkeley — terminated the deal Thursday after he sent in his signed contract.

Jerri Applegate Randrup, Alameda County spokeswoman, told Berkeleyside by email just before 5 p.m. that the city and county “decided together to terminate the contract because the property owner could not comply with the terms of Project Roomkey.”


Communications obtained by Berkeleyside illustrate how the contentious clash between the hotel owner and the county apparently derailed the deal. According to the April 30 termination letter sent to Khatri, which was provided by the county at Berkeleyside’s request, Alameda County alleged that a “breach of the contract terms” had rendered the partnership infeasible.

According to Khatri, Alameda County said he had not provided sufficient access to the property, which is located at 920 University Ave., between Seventh and Eighth streets in West Berkeley. Khatri told Berkeleyside he was showing the site to city and county staff Thursday when there was a disagreement related to the hotel eating area.

“I was trying to help the community, but I guess the county doesn’t understand,” said Khatri, who has owned La Quinta since 1987. He said the bulk of the trouble was due to conflict he had with a county staffer assigned to the project.

The termination letter goes into detail about a series of alleged exchanges between Khatri and the county about the contract terms and property access at La Quinta. Khatri was concerned about what would happen if hotel guests did not leave after 90 days, according to the letter, and wanted to keep some parts of the hotel off-limits.


The letter, which was signed by Willie Hopkins Jr., director of the county’s General Services Agency, said Khatri had made five women who visited the property as part of site preparations this week feel unsafe. According to the letter, Khatri at one point said he would not deal with one county staffer “because she is a woman.”

“Your behavior is unnecessary, unprofessional and unacceptable,” Hopkins wrote, adding that the county “has no tolerance for sexism.”

The county staffer did not reply to attempts by Berkeleyside to contact her by phone and email.

On Friday, Khatri said a significant portion of the county letter was “untruthful” and that it was full of “all kinds of false accusations.” He expressed regret that the deal had fallen through. But he said the problems stemmed from the county staffer, who — in his experience — had been largely unavailable and set unrealistic deadlines, among other issues.

Khatri said it was unfortunate that Hopkins was simply “believing this one employee’s story.”

He told Berkeleyside he had expressed concerns to the county about access to his private office at the hotel while Project Roomkey was underway; according to Khatri, the county had told him it would essentially take over the entire hotel for the next three months and that he would not be able to use his office.

He said he had also been worried about some of the cooking equipment in the hotel’s breakfast area. That was the negotiation underway Thursday, he said, when the group of women visiting La Quinta suddenly left.

According to the county letter, Khatri reportedly took one of the women into a separate room to have that discussion and would not let the rest of the group into that room when they “became uncomfortable with the situation.”

Khatri told Berkeleyside he had been one of the first hotel owners in Alameda County to express interest in Project Roomkey and ask the county how he could get involved. According to the termination letter, negotiations between the two parties began April 8.

Khatri said he’s still open to finding an alternative solution, particularly if he could make the agreement with city, rather than county, staff.

“I’d still be willing to talk if the city is interested because they still have a lot of people on the streets that need to get into rooms,” Khatri said. “I know a lot of hotel owners won’t do that, but I would.”

But the city of Berkeley indicated Friday that this was unlikely to be an option.

“We were disappointed that this didn’t work out given how much time our staff and the county’s had put into making this work,” said city spokesman Matthai Chakko. “That said, it was ultimately the right decision for our clients, our staffs and our community.”

Khatri said the program had been set to begin Friday and that he has now billed the county for three months of service — from May through July — as outlined by the contract he signed this week.

“Once I submit, they have 30 days to pay,” Khatri said. Legal action is a possibility but he said he has not made a decision about whether to pursue it.

According to county documents, the Board of Supervisors was set to approve the $2.3 million contract with La Quinta on Tuesday along with deals with Quality Inn in Oakland and Marina Village Inn in Alameda. Meeting minutes were not available as of publication time to indicate whether any of those terms changed Tuesday but, according to the Hopkins letter, the board did approve the La Quinta contract this week.

In the county letter, Hopkins put the blame squarely on Khatri for killing the deal and said Alameda County bore no financial responsibility for the fallout.

“As the County has not yet taken occupancy, it is not responsible for payment of rent or any other costs under the Agreement,” he wrote. “It is unfortunate that the County is unable to use your Hotel as part of its COVID-19 response, but it cannot waste time, money and precious resources dealing with your behavior and repeated breaches of the Agreement during this time of emergency.”

Emilie Raguso is Berkeleyside’s senior news editor. Email: emilie@berkeleyside.com. Twitter: emraguso. Phone: 510-459-8325.