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In 2020, the state needed motel rooms, and lots of them.
Wildfires and COVID-19 had conspired to force thousands of Oregonians into the elements. In response, the state wanted to get millions of dollars into the hands of nonprofits that could turn struggling hotels and motels into shelters as fast as possible.
Knowing that Oregon Housing and Community Services couldn’t move quickly enough, legislators called upon the state’s preeminent foundation to find nonprofits that could get the hammers swinging, stat.
That foundation was the Oregon Community Foundation. It granted $125 million to 32 projects, getting the first batch of awards out in a matter of months. The first “Project Turnkey” shelter bed became available in March 2021, just four months after the Legislature acted.
Project Turnkey’s speed and efficiency prompted U.S. Rep. Suzanne Bonamici (D-Ore.) to introduce a bill in May 2024 that would make it a nationwide program. (The bill died in the Republican-controlled House of Representatives.)
“This program is a smart way to quickly and economically increase access to housing that provides the stability people need,” Bonamici said at the time.
Project Turnkey’s speed and efficiency was laudable. In two years, it created 1,384 shelter units in 27 Oregon cities for under $100,000 apiece, about half the cost of most affordable housing.
But at least two of the 32 projects have been tarnished: one, in Gresham, by allegations of dubious accounting, and another, in coastal North Bend, by a leader who botched the renovation of a 17-room motel before being ousted for getting in a bar fight in Coos Bay.
Those two projects raise the question of whether there is more trouble to come. Answers may lie in the applications that the nonprofit shelter-builders submitted to get Project Turnkey money, and in documents describing the due diligence that OCF did on them. (In the case of the Gresham project, for one, the foundation was forewarned by a public official to stay away.)
But none of that information is publicly available. Spokesman Colin Fogarty says OCF, a $3 billion foundation started in 1973, is exempt from Oregon public records laws because it’s a private foundation, and its nonprofit partners “trust us with details that may or may not be public.”
If Fogarty is correct, then projects funded with millions of taxpayer dollars may be shielded from public view. The state, counties and cities all contract with nonprofits to do the government’s work. Multnomah County dispenses more than $1 billion to nonprofits every year. The state spends far more—and, in the case of Project Turnkey, contracted out the selection of contractors.
When she was a state senator from Scappoose, Betsy Johnson questioned the wisdom of spraying money around the state to buy dilapidated motels. Who, she wondered, would inspect the roofs? Who would pay to keep the shelters open after Turnkey money ran out? Johnson says she’d like to see the applications and OCF’s work on them.
“If your team did such a red-hot great job,” she says, “let’s see the paperwork.”
Beyond a mostly favorable study by Portland State University in 2024, Project Turnkey drew little scrutiny until this year, when accounting issues dogged one of its biggest grantees, Rockwood Community Development Corporation.
Rockwood CDC got $6.8 million from Project Turnkey to buy an old Best Western in Gresham and turn it into a shelter called Rockwood Tower. Soon after, Multnomah County began paying hundreds of thousands to house homeless families there.
The deal ended this year when the county determined that Rockwood CDC had billed for unapproved expenses, double-counted some costs, and charged the county for rooms under repair (“Best Western Front,” WW, June 25). Rockwood CDC denied the charges.
Soon afterward, emails obtained by WW showed that Rockwood CDC founder Brad Ketch, the former head of a money-losing tech company, had been slow to produce financial statements for his directors and struggled to pay rent on buildings (“The King of Rockwood,” WW, July 23). His board chair, Mary Edmeades, resigned in 2017, writing Ketch to say that she no longer had “any confidence that the organization is operating with financial integrity and for community benefit.”
Other emails show that Dina DiNucci, then a member of the Gresham City Council, called OCF and tried to stop it from granting the money to Rockwood CDC.
Ketch’s record as tech company executive, including a brazen plan to sell 358 million shares of stock, even though his company had lost $4.7 million in fiscal 2005 and a whopping $11 million in the first half of fiscal 2006, is detailed in government filings.
In a 2021 report to the Legislature, OCF said “grantees had to prove they could sustain their operations for years to come.” Rockwood CDC put Rockwood Tower at some risk in January when it used the property as collateral for a $2.4 million loan from Washington Federal Bank. Rockwood CDC planned to use a portion of the loan to develop a 56-unit apartment building nearby, spokeswoman Savannah Carreno wrote in an Aug. 12 email.
Taxpayers have much less at risk in North Bend, a coastal town whose population hovers around 10,000, than in Gresham. There, Project Turnkey awarded Operation Rebuild Hope $1.3 million to renovate a 17-room motel built on Highway 101 in 1938.
ORH was the brainchild of Patrick Wright, a coastal Oregon native who spent 14 years in the U.S. Marine Corps, then came home to help homeless veterans. Wright rehabilitated a battered house in North Bend to shelter veterans, then set his sights on the Parkside Motel. He teamed up with Coos Health & Wellness, a behavioral health care provider, and won the grant from Operation Turnkey in early 2021.
Judging from ORH’s tax filings, the grant was transformative. In the fiscal year ended that November, Wright’s salary was $136,125, according to ORH’s tax filing, up from zero the year before. His girlfriend, Angela Boyd, joined the board that year and made $95,188.
Wright struggled to rehabilitate the Parkside, according to emails with the city of North Bend, obtained by WW through a public records request. ORH failed its final inspection on the motel, now a shelter, because it hadn’t installed a fire suppression system, as required when “substantial alterations” are made to residential buildings, one of the emails shows.
North Bend city manager David Milliron began corresponding with Megan Loeb, a senior program officer at OCF, to try and find a solution.
“Operation Rebuild Hope requested in December 2021 the fire suppression line be installed by the Coos Bay-North Bend Water Board, but the work order was canceled by the agency for nonpayment,” Milliron wrote on April 23, 2022. “Patrick Wright of Operation Rebuild Hope has threatened to defy the occupancy permit restrictions and take his concerns to the news media.”
OCF’s Loeb responded two days later.
“I’m trying to get a handle on the situation to learn how everyone might work collaboratively toward a solution,” she wrote. “It seems as though everyone shares the same goals of wanting to keep the community members safe. Do you have suggestions about a path forward?”
North Bend engineering coordinator Derek Windham posted signs on the units that failed inspection. Wright took them down and brought them to city offices, according to emails.
“Tell Derek to keep his trash off my building,” he allegedly said to another North Bend employee. A deputy state fire marshal visited and determined that removing the signs violated the law.
Six weeks later, on June 12, 2022, Wright was arrested and charged with assault, disorderly conduct and resisting arrest, according to police records. The ORH board, concerned that the arrest would cost the project its funding, put him on administrative leave. Wright responded by changing the locks on ORH properties, says Russ Shield, a board member brought in to straighten out the mess. Shortly afterward, the board fired Wright.
“He was good at securing grants, but he wasn’t good at doing the paperwork correctly,” Shield says. Wright told funders that ORH was “able to do more than we were capable of,” Shield says.
Mike Rowley, director of Coos Health & Wellness, says that despite the two partners’ joint application, all the Project Turnkey money went to ORH. Coos Health planned to cooperate with ORH to provide rooms to homeless people during the pandemic. “Shortly after the deal was struck with ORH, they couldn’t fulfill their obligations, so we canceled that contract,” Rowley says.
Wright left North Bend. He and Angela Boyd—now going by Angela Archer—paid $810,000 for a five-bedroom house on the North Umpqua River in Roseburg, according to Douglas County property records. They took out a mortgage for $769,500.
Wright didn’t return emails or phone calls seeking comment.
Today, ORH’s shelter has a certificate of occupancy for eight rooms, fewer than half the 17 referenced in Project Turnkey’s reports to the Legislature. Fogarty says the Turnkey money was always meant for a phase one of eight rooms, but he didn’t provide documents describing a scope of project that matched that number.
“They fulfilled the obligations of the grant,” Fogarty said in a phone interview. “Every dollar that came from OCF through Project Turnkey went to that project.”
Determining what the public has the right to know about government records is so important—and complicated—that the Oregon attorney general’s office publishes a 426-page manual on the subject, which was updated in 2019. It doesn’t immunize nonprofits from disclosure, by any means.
“On its face, the public records law does not apply to private entities such as nonprofit corporations and cooperatives,” the manual says. “However, if the ostensibly private entity is the ‘functional equivalent’ of a public body, the public records law applies to it.”
The Oregon Supreme Court applies a six-part test to determine if a nonprofit is a functional equivalent. Among the measures are decision-making authority, funding, and whether the job might otherwise be done by the government. In the case of Project Turnkey, all of the money came from federal and state sources. OCF had sole discretion in picking the nonprofit grantees. Awarding grants is something the state does all the time.
WW filed a petition last week with Oregon Attorney General Dan Rayfield, arguing that OCF, in the case of Project Turnkey, is the functional equivalent of a public body.
On Tuesday, David Pitcher, senior assistant attorney general, sent an email to OCF, copying WW, offering the foundation a chance to respond to the newspaper’s petition.
“Ordinarily, the AG tries to resolve these petitions within a week,” Pitcher wrote. But WW’s “presents a more complex question than most.”
