How the Homeless Bought a Rolls for Cornelius Pitts
Szegedy-Maszak, Marianne
HOW THE HOMELESS BOUGHT A ROLLS FOR CORNELIUS PITTS by Marianne Szegedy-Maszak Getting rich by housing the needy 1 t is a typical 90-degrees-and-humid June day in Washington D.C. and...
...Its contract with the city is to provide "transitional," or medium-term...
...We meet up at parties and discuss the type of car you drive and the type of home you have?' He says critics of his program are racists or are swallowing a clever strategy of white real-estate developers...
...They show what was once the hotel's luxurious Red Carpet Lounge slowly filling up with his newest—and most lucrative— clients, homeless families getting their chicken dinner...
...Racism is still sticking its ugly head up...
...The ptice: $1.3 million...
...But with so little public housing available, families are kept at the Pitts for months on end...
...Indeed, the best office suites in Washington's fancy new Harbor Place now lease for $42 a square foot...
...He and his wife would probably not have made $245,000 in salaries, benefits, and profits from the contract last year...
...Pitts submitted his and won...
...The combination of slashed federal low-income housing support, deinstitutionalization of mental patients, neighborhood gentrification, and hard economic times for poorer Americans created a homeless population that by 1985 was increasing by 25 percent a year, according to the U.S...
...Pitts charged the city $10,400 for damages, even though damages were already covered elsewhere in the contract...
...A number of homeless families have moved to the hotel's front stoop where they will sit talking until the 11 o'clock curfew...
...After the 1982 contract was announced, The Washington Post reported that police had made 17 arrests at the Pitts in the previous 14 months for crimes such as drug possession and assault with a deadly weapon...
...It needed an entire facility devoted to homeless families and an "intake center" to centralize the Department of Human Services (DHS) processing...
...Renting a few rooms to the homeless, he explained in 1969, was good business, especially "during the hard winter season ." By 1982, the District needed more than a few rooms...
...is as fine a shelter for the homeless as anyone could find anywhere...
...We asked the program people what to do and they said there was nowhere else to put them!' That is not entirely true...
...But the Pitts remained the only intake center and the only hotel with a fixed-price contract...
...Yet rather than demand that Pitts cut his prices, the city increased his volume: the following year, DHS began busing homeless housed in other shelters to the Pitts three times a day for meals...
...A plastic plaque on his desk reads: "The trouble with some people is that they won't admit their faults...
...98 percent of the recipients of services are black people...
...On one hand he wears a large diamond on a gold band, on the other, three slightly smaller diamonds on a silver band...
...and Cornelius Pitts is an hour late...
...He wasn't very political before...
...He bursts into the front office at the Pitts Motor Hotel, apologizes, then sits down in a maroon leather chair behind a large desk with lion-head drawer handles...
...He says he runs a class place, that his hotel at 14th and Belmont...
...narcotics sergeant told the Post...
...Their eyes follow him and conversation stops...
...The homeless have been good to Pitts...
...As desperate as some are to get out, others, sad to say, get hooked on it ?' Even Ricardo Lyles, chief of D.C:s office of Shelter and Emergency Services, agrees: "It's not the ideal for a family to live in a hotel...
...He wears a very, very thin gold watch...
...Conversely, if we made an adequate profit, the government had nothing to do with the way we spend it ." The government, however, paid Pitts $21,677 a year for three years to have CPAs do independent audits of his books...
...He definitely shared his income with numerous blacks...
...We sent Pitts a letter asking for back space rental," says Allison...
...It is the middle-class blacks we have always had problems with...
...achieved what he calls his "100 percent occupancy" rate...
...Putting families in these hotel shelters is unconscionable," says Reverend Tom Nees, who runs a 15-apartment nonprofit facility for homeless families called Community of Hope...
...As a result, many cities turned to an obvious expedient: hotels...
...And if he makes a good profit, well, that's nobody's business...
...shelter for homeless families...
...Pitts's respectable clients were replaced by prostitutes and junkies...
...At first, he worked as a clerktypist for the War Department and moonlighted as a cab driver, saving his money for something bigger...
...He explains that his neighborhood and business went into decline after the riots because "after Dr...
...I just don't believe that any white person can be as interested in the welfare of poor black people as a black person" The issues of race and class inform Pitts's judgments...
...Pitts had competed for his contract against two other bidders: the House of Ruth, an emergency shelter for women and children, and the 10th Street Baptist Church...
...Maybe two...
...The long stays at the Pitts—an "emergency," or short-term, shelter—make the distinction largely theoretical...
...Although the Pitts contract specifies no more than four persons in each room, Angela Robertson says her family of six was crammed into one room...
...At $42 a night, plus $12 per person per day for meals, the government is paying almost as much per month to keep a family at the Pitts as it would cost to put them in public housing for a year...
...Pitts won even though, as the Post reported at the time, the House of Ruth's proposal was lower than Pitts's...
...writer...
...We've been pressing the city for over a year to expand our contract," said Nees, "I told them the worst it could do is save you money...
...What makes an area safe is people...
...DHS asked for bids on a contract...
...When questioned about this, Pitts launched into a long, convoluted monologue about the Economy Act of 1932 and the critical distinction between "raw space" and what he provides...
...Conference of Mayors...
...It was not clear whether federal funds available for emergency sheltering of the homeless could be used to build shelters or to create more permanent housing stock...
...After the riots, blacks who formerly had no alternative but to stay at the Pitts Hotel increasingly were allowed into the white hotels downtown...
...They want to buy my property...
...He also blames his middle-class black clientele, who stayed away and starved his business...
...Location-wise he was beat," says Leroy Hubbard...
...According to Pitts, those who complain that the city has ignored better options are blind to the greatest virtue of his program: his program is necessarily the best because it is run by blacks...
...For a number of years he had occasionally sheltered homeless families for the District...
...He was what they called a progressive businessman !' Calvin T. Rolark, president and founder of the United Black Fund, publisher of the weekly community newspaper, The Washington Informer, and a close friend of Cornelius Pitts since the early fifties, agrees: "He always offered lots of employment to the black community...
...But the rooms where homeless families live are not so well maintained...
...There have been many times I called on Pitts to help out a family and he did it, only asking that we keep his help anonymous!' Pitts achieved his success in the face of the same racism any black entrepreneur of his generation experienced...
...I refuse to sell...
...A month before his 1968 assassination, Martin Luther King rented 30 rooms at the Pitts for a board meeting of the Southern Leadership Conference...
...Back in 1961, for instance, two white police officers from the department's morals squad tried to have Pitts's tourist home license revoked on the grounds that two women had been arrested there the previous year...
...Pitts's salary was too high—twice what DHS paid the administrators of the city's two largest nursing homes...
...government would withdraw my contract ." Ask Pitts's many friends in Washington's black power elite about the criticisms of his program and the answers are almost always the same: white racism and not gross mismanagement of a public poverty program, is behind the complaints...
...He is very supportive politically and he will support the existing politicians!' The television monitors in Pitts's office show the staff clearing the tables...
...The 190 memo says that Pitts was overcharging the city by one-third for the meals he provided his residents...
...I doubt we will get it ." The documents reveal dozens of other overcharges...
...I just don't know how I would have been able to make it without it !' Pitts says he is proud that today, after more than five years as a home to the homeless, the Pitts Motor Hotel is again a showcase, much like it was in the sixties...
...His business, he says, emphasizing each syllable, is "a pro-fit-mak-ing-en-ter-prise...
...The public areas of the hotel are relatively clean and cheerfully painted...
...He wanted to be successful in a white man's world...
...drugs and prostitution are in that area...
...The next year he bought three more buildings on Belmont Street, then tore down all his buildings and constructed the Pitts Motor Hotel...
...It is difficult for a white business person to care for my people...
...So they try to discredit me so that the D.C...
...The Community of Hope is just down the street from the Pitts...
...We had a fixed price contract with the city...
...Within months of the riots, he could no longer keep up his $4,064-permonth payments on a Small Business Administration loan...
...Pitts wades through the children eating fudgesicles and the women sipping Orange Crush on his way to his Rolls Royce...
...A city inspection report of the hotel from last February repeatedly cited loose plaster, leaks, lack of ventilation, holes in the walls and floors, rooms infested with roaches, bedbugs, and other insects, an inoperable fire alarm system, and broken lights...
...I'd admit mine...
...Businessmen rallied to Pitts's defense...
...They think, if they achieve it, they have to steal it!' Pitts works to keep support like that...
...from 1982 to 1986, the city renewed his contract without bothering to seek other bidders...
...Alliance of Active Black Businessmen, he pushed for city assistance to revitalize the battered neighborhoods, but little help came...
...In total, the auditor concluded, the city's contract with Pitts was "sufficiently egregious and exploitative of the taxpayers' interest as to allow only a conclusion that the Agency was grossly derelict in its responsibility to guard the taxpayers' resources ." Says Allison: "The guy was simply making too much money off the homeless ." "The fruits of my labor" Those who work with the homeless recognize the absurdity of sheltering homeless families in hotels like the Pitts...
...Pitts asks one of his staff to get him an ice cream sandwich...
...Within that population, homeless families comprise the fastest growing group...
...I've seen white men get bank loans in this neighborhood," he said in 1968, while he was forced to pay "as much as a dollar for a dollar in interest...
...If I will ever enjoy the fruits of my labor, I should enjoy them in this life...
...A month's rent for a Community of Hope apartment, where families have their own kitchens, costs $500...
...The D.C...
...Indeed, without the contract, Pitts might have lost his hotel...
...Both cars have threedigit license plate numbers, a sign of access to the top city officials who dispense them...
...I was born into business...
...Maybe it is because we compete socially with each other and we don't want to give each other an edge...
...But the neighborhood never rebounded, and Pitts never again made the profit he had enjoyed catering to middle-class customers...
...And if the city hadn't renewed his multi-million-dollar contract each year—even after mounting evidence of fiscal irregularities—he might never have been able to build all those additions on his upper Northwest Washington home, which is now assessed at $399,562...
...King was shot, the whites left and they have yet to return" and because The Washington Post "kept writing about what a high crime area this was and never retracted it...
...My mother and father ran a momandpop grocery store in New Orleans!' In 1950 he made the leap, buying his first building on Belmont Street, then a middle-class black residential neighborhood...
...when the press makes people scared, people stay away...
...I don't know why the man is criticized," says an indignant Calvin T. Rolark of the United Black Fund...
...These are my people," he says...
...Poor blacks have always supported black businesses...
...By comparison, the audit pointed out, DHS leased space at 1875 Connecticut Avenue, a more desirable location, for $15 a square foot...
...A family should be in an apartment ." Other cities have learned to be "creative" with their federal emergency funds, using them to rehab apartments into which shelter residents can be moved...
...He converted his new property into a tourist home for blacks, who were not welcome in downtown hotels...
...In the sixties, the Pitts Hotel was a showplace, and Cornelius Pitts was one of Washington's most successful black entrepreneurs...
...In Washington, officials turned to Cornelius Pitts...
...I don't cut corners!' In the staff area behind the thick bullet-proof window are several computer systems with the latest software...
...The audit also disclosed that Pitts had been charging $97.07 per square foot for the office space used by DHS officials...
...has been a slow learner, even though it has working alternatives as models...
...Or buy his five cars, particularly the $61,000 Mercedes 560 SEL and the $117,500 1987 Rolls Royce Silver Spur...
...Nine years later he bought another building on Belmont...
...This extremely inefficient way of feeding people grossed Pitts more than a million extra dollars that year...
...Two DHS internal memos from 1984 and 1986, which were leaked to the press, and a publicly released 1986 audit of the Pitts contract by city auditor Otis Troupe reveal where the millions were spent...
...He would donate food and space for neighborhood functions, sponsor kids in camps...
...And the minute you walked in, you felt comfortable there:' Pitts viewed himself as having a definite role to play in his community...
...You didn't feel like you were getting ripped off...
...The only hints that Pitts's prosperity comes from an unconventional enterprise are the images on small black and white monitors in the corners of his office...
...The person least troubled by the contract award was, of course, Cornelius Pitts...
...Pitts took the money but somehow never got around to commissioning the audits...
...Ironically for Pitts, the effects of the neighborhood devastation were heightened by the success of the civil rights movement...
...There are differences, though...
...She turned her head and shook it saying, "I can't . . ." Then she said quickly, "It's hell ." Booked up For providing his first-class accommodations to the city's homeless families, Pitts has been guaranteed full occupancy...
...Chamber of Commerce pointed out that the incident seemed to be part of "a pattern of questionable police tactics which are directed principally toward Negro establishments with integrated clientele!' Pitts's efforts to expand his business were frustrated by the reluctance of banks to give loans to blacks...
...The restaurant still has some of the panache of the Red Carpet days, though there is no red carpet over the white linoleum floor...
...If we found that our expenses exceeded our income, we had to eat the expenses...
...A homeless woman familiar with both the Community of Hope and the Pitts put it simply: "The difference between those two places is the difference between heaven and hell" A Community of Hope apartment is not only more livable than a room at the Pitts, it's also much less expensive...
...Cornelius Pitts's slide from the top began with the assassination of King...
...Pitts doesn't understand why people have been critical of his business practices...
...That same year Ralph Abernathy and other members of the Poor People's Campaign stayed at the hotel during their march on Washington...
...A current resident, who was sitting with a crowd on the front steps, was reluctant to describe what it was like to live there because "it causes trouble...
...Rooms at the top Living off government contracts was not the dream Cornelius C. Pitts brought with him when he came to Washington from New Orleans during World War II...
...If this is frustrating for independent-minded families eager to get into their own apartments, it's even worse for those suffering from welfare dependency...
...There is no shelter in this city that is as fully equipped," he says...
...I was determined to break through the color barrier," he said in 1968...
...DHS dropped the new system after the 1986 audit called it, and Pitts's meal prices, "diseconomical and excessive...
...They lined up at the Red Carpet Lounge—which featured valet parking and a maitre d' —to listen to the likes of Aretha Franklin...
...By 1981, The homeless contract has enabled Cornelius Pitts to buy five cars including a $61,000 Mercedes 560 SEL and a $117,500 Rolls Royce Silver Spur...
...Washington, D.C...
...But we just haven't gotten anywhere...
...The drinks weren't that high...
...The street deteriorated ." Most businessmen whose stores were not destroyed quickly moved to other neighborhoods...
...I feel I have earned the right to drive the kind of car I can afford to buy and live in the kind of home I can afford to live in . " Pitts owed more than $415,000 in back federal and city taxes and his hold on the Pitts Motor Hotel was weak...
...now he is at every special event...
...As a spokesman for the D.C...
...His hotel offers a completely renovated kitchen that the chef claims "is more well-equipped than any of those kitchens downtown...
...The place stayed packed," a former regular said...
...Suite deal Most cities were unprepared for the crisis of homelessness that erupted in the eighties...
...He is not, he points out, one of those nonprofits...
...hadn't given him its solesource contract for providing emergency shelter for homeless families in 1982, he might never have Marianne Szegedy-Maszak is a Washington, D.C...
...His hotel attracted not only tourists and traveling businessmen but local customers, black and white...
...The room, she says, was infested with roaches and rats...
...It also seemed odd that such a contract would go to someone who was paying off $415,000 in back taxes...
...Meanwhile, like the immigrant hero in a thousand American success stories, he went to college, and in 1964, at the age of 41, he graduated with a degree in business administration from Howard University...
...The music was great...
...I feel I have earned the right to drive the kind of car I can afford to buy and live in the kind of home I can afford to live in...
...Some people, some white people, are not desirous of blacks achieving anything...
...News of the killing triggered rioting, and what had been a vibrant shopping district near the Pitts became a gloomy mass of burned-out buildings...
...He trained some summer youth employees in hotel work...
...It's right off 14th Street...
...There were some who doubted the wisdom of choosing the Pitts...
...When he still owed hundreds of thousands of dollars in back taxes, his hotel managed to come up with $2,000 for Mayor Marion Barry's 1982 reelection campaign—a few months before the DHS contract was awarded...
...A month's room and board at the Pitts for a family of four costs the government $2,748...
...If the city of Washington D.C...
...There is a small store, a first-class security system with monitors scattered throughout the building, and a video system that can feed any one of the more than 90 movies in the Pitts video library into each room...
...if I had any...
...City officials, however, say they had little choice in the matter...
...The contract was an absolute must for me," Pitts explained when the award was announced...
...I should get more," he says...
...Whenever he could, he did something for the neighborhood," says Leroy Hubbard, a local civic leader and long-time friend of Pitts...
...This is the best temporary shelter for homeless families in the city...
...I would question the judgment of that decision [to move families into the hotel]," a D.C...
...A children's playroom is decorated with children's drawings of houses with bright roofs, curlicues of smoke, and single shade trees...
...He was considered one of the more successful businessmen during that time, but after the riots things went downhill...
...Back when we first made the award, we felt our backs were really against the walls," explains Robert Allison, deputy controller of DHS...
...Soon, though, the Pitts was overflowing, and DHS began placing families in other hotels...
...Pitts didn't keep track of furnishings, equipment, or household items purchased with DHS funds...
...I have been in business for 37 years," Pitts says...
...Leroy Hubbard explains that this is a skill Pitts had to learn...
...Pitts is still admired by many of the city's black leaders for remaining loyal to his neighborhood...
...DHS Deputy Controller Robert Allison, who wrote the 1986 memo, puts the overcharge at about $280,000...
...But as a black business person, I am doing a better job ?' When asked about the Community of Hope program down the street, he responds, "It's nothing personal...
...When asked about such complaints, Pitts bristles...
...Sometimes he would catch the mayor's ear at special events...
...The only bank that really helped me was the Industrial Bank of Washington, a black bank !' As one of Washington's premier black businessmen, Pitts naturally drifted into the orbit of prominent black political figures...
...She shared a bed with her two youngest sons, her two older sons slept together, and her daughter slept on a roll-away cot...
...Whites who have moved into this area are whites who want to build expensive condominiums on Belmont Street," he says...
...He is a very big man and his voice is deep and raspy...
...HOW THE HOMELESS BOUGHT A ROLLS FOR CORNELIUS PITTS by Marianne Szegedy-Maszak Getting rich by housing the needy 1 t is a typical 90-degrees-and-humid June day in Washington D.C...
Vol. 19 • July 1987 • No. 6
