Hou$e of chaos
City audits strapped shelter provider that got $407M deal
A NONPROFIT THAT has become a major homeless shelter provider in a short time frame is being audited by the city — less than a year after it scored $407 million in contracts.
Childrens Community Services lassoed two mega-contracts with the Department of Homeless Services last June to operate hotel shelters in four boroughs and charge as much as $270 a night to house a family in a room.
The city inked the deals even though the nonprofit only started four years ago and its most recent tax filing showed it was $6 million in the red.
One contract was for three years and $360 million to house homeless families. The other was for $47.7 million to house single adults.
When the Daily News inquired about the nonprofit’s debts and murky financials, Homeless Services said it planned to procure an independent accounting firm to review Childrens Community Services and pare down the number of shelters the nonprofit operates.
“We have directed an immediate independent audit of this provider and are scaling back their portfolio to ensure they’re delivering the services our homeless neighbors deserve during the hotel phaseout period,” Homeless Services said in a statement.
The nonprofit’s tax filings are also fuzzy on how it manages to stay afloat.
In the filing for the first half of 2015, Childrens Community said it had received $1.8 million in loans from an unnamed outside trust.
Under the conditions of the loan, Childrens Community agreed to pay the lender an annual interest rate of 6.73%, compounded monthly.
If the nonprofit doesn’t pay the loan on time, then the interest rate increases to the maximum amount allowed by law, but not at a pace greater than 2% per month, the filing says.
Homeless Services said it has requested information on the source of the loan.
The agency said it awarded the $360 million contract to Childrens Community after it found the nonprofit in full compliance with an earlier contract. The city agency said the contract would help control costs on hotel shelters as it opens more traditional shelters.
Childrens Community has steadily amassed a sizable portfolio of shelters since it started in 2014. Over the past four years, it has received a total of $540 million in contracts from Homeless Services.
Childrens Community currently operates 29 family hotel shelters and six hotel shelters for single adults, including the Row NYC and Stewart Hotel in Midtown.
Thomas Bransky founded Childrens Community Services in 2014 and was a newcomer to the shelter world. On its initial website, the nonprofit said Bransky hailed from Peoria, Ill., where he worked in his family’s hotel business. That biography no longer appears on the nonprofit’s current website.
A spokeswoman for the family hotel company, First Hospitality Group, said Bransky’s uncle founded the company. Bransky worked as a sales associate at a Fairfield Inn & Suites in Chicago, the spokeswoman said.
Tax records show Bransky loaned the nonprofit $100,000 to get it started.
In the nonprofit’s most recent tax filing, covering July 1, 2015, to June 30, 2016, Bransky earned $33,192. During that period, the chief operating officer, Ruth Mandelbaum, received no compensation, according to the filing.
The nonprofit and Bransky did not respond to requests for comment.