Newark council debates Riviera Hotel lease to provide emergency and transitional housing

City of Newark officials and council members spent substantial time debating a proposed lease of the Riviera Hotel to provide emergency, transitional and some permanent housing for people without stable addresses.

Deputy Mayor and Business Administrator Eric Pennington and Allison Ladd, director of Economic and Housing Development, told the council the city planned to use the hotel for emergency housing and transitional units while proceeding with a full rehabilitation. Miles Berger, appearing for the property owner, said negotiations with labor and other stakeholders had produced changes the owner will adopt to improve worker conditions.

Council members pressed the administration for details on financing, lease length and oversight. Pennington and other officials said the lease would include two initial rent‑free years and a subsequent term that could make the commitment longer if extension options were exercised. Administration materials reviewed by the council indicated a base period of about 12 years (two free years plus a 10‑year paid period) and two extension options that could carry the agreement up to as much as 30 years, though officials emphasized extensions are optional and subject to future funding appropriations. The city said it retains contractual termination rights if the required funding is not available.

Officials said the hotel would be run by a contract operator chosen through an RFP; Catholic Charities currently runs similar services and is expected to bid to continue operating the facility, but the administration said other nonprofit providers will be eligible. The first 12 months of the current management arrangement would remain in place, the administration said, then the city would issue the RFP to select a long‑term operator.

Council members repeatedly asked whether federal and state funding that supports homeless services is secured. Pennington said the lease structure lessens near‑term budget exposure because the first two years are rent‑free and the program would rely on grant funds and other funding sources for social services on site. He said the administration was actively pursuing funding partnerships — including meetings with the county and with the New Jersey Department of Community Affairs — and that the city could terminate the lease should appropriations not be forthcoming, while acknowledging a termination could invite litigation that the city would defend based on good‑faith budgetary reasons.

Several council members asked for additional, written responses to specific questions about long‑term costs, operator contracting, and how many beds would be available during renovations. The administration said it would provide written answers and that staff (including the health director) planned follow‑up meetings with state agencies to pursue transitional housing funding.

Discussion also touched on interim capacity: officials said partial use of the hotel could begin during rehabilitation and that the full rehabilitation would likely take up to a year, with emergency and transitional spaces available sooner. The administration signaled an intent not to defer a final council decision and asked members to vote up or down at the next meeting but did not record any final vote during the premeeting.

Ending — next steps

The council requested written follow‑up answering financing and operational questions; the administration committed to provide that material before the next regular meeting. No formal council vote on the lease was recorded in the premeeting transcript.