The La Quinta Inn and Suites — which the San Mateo County Board of Supervisors voted to purchase as housing for formerly homeless families and seniors pending Project Homekey funding last year — did not receive funding from the state during round three of the program’s financing dispersal.
Another San Mateo County Project Homekey proposal, South San Francisco’s Ramada Inn, did receive project funding. That hotel was awarded $13.9 million, with a $12 million capital award and the remainder for operational costs. It will provide 45 permanent supportive housing units.
This was the final funding round for Project Homekey, a statewide investment in housing solutions for the homeless through the purchase of hotels, multifamily apartments or other buildings to create transitional or long-term housing, Pablo Espinoza, Department of Housing and Community Development deputy director of communications, said in an email.
The state will now be transitioning to the Homekey+ program, Espinoza said. Modeled after Project Homekey with a goal of financing property acquisition, the new program will use voter-approved Proposition 1 funds rather than the mix of coronavirus relief and general fund dollars previously deployed.
La Quinta — which has a purchasing price of $33 million — did not receive round three funding because “they did not have site control,” Espinoza said. County Executive Mike Callagy said the project did not receive funds because the state didn’t believe the county would be able to occupy the site in a timely manner due to its ongoing litigation with the city of Millbrae.
The hotly-contested project generated both resident outrage around public safety concerns and significant loss of revenue as well as a lawsuit. Millbrae’s legal team argued the purchase would violate Article 34 of the California Constitution, which makes it so any public agency looking to develop or acquire low-income housing must gain the approval of a majority of voters to do so.
Project Homekey is currently exempt from Article 34 under state law, and Superior Court Judge Nancy Fineman dismissed the city’s lawsuit on the grounds that because the county has yet to legally specify the purchase will be used for low-income residents or receive Project Homekey funds for the project, the issue was not yet “ripe for determination.”
Millbrae filed an appeal against that ruling.
“We will continue to evaluate all options, whether it’s in Millbrae or any other city,” Callagy said of the county’s next steps based on the state’s decision.
San Mateo County is looking forward to getting to work on the Ramada Inn, which will be run by Episcopal Community Services, he said.
“We’re obviously going to move forward with the remodel. We’re very grateful to the state for the opportunity to house individuals in a permanent supportive housing environment,” he said. “We really put people in a place to succeed. The folks who will occupy the residence will be absolutely ready to live on their own.”
Millbrae City Manager Tom Williams reiterated that La Quinta was not an ideal site for permanent supportive housing and the county should look at other, cheaper alternatives.
“This is just a project that, from the very beginning, was not well thought-out,” he said. “I don’t think it’s feasible, I think it’s very costly, and I think there are better alternatives.”
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