Salinas eyes apartments for chronically homeless youth, despite a lawsuit over sale.

After successfully launching the conversion of one motel into homes for homeless adults beginning in December 2020 under California’s Homekey program, the city of Salinas is now focused on converting two more motels to create an additional 103 units of permanent supportive housing for homeless youth. The city’s housing staff submitted one application for Round 2 funding and are preparing a second in a bid to secure an estimated total of $19.5 million from the state toward the purchase and operation of the two motels.

One of them, the Sanborn Inn at 180 S. Sanborn Road, is the center of a lawsuit filed on Jan. 19 in Monterey County Superior Court between developer Shangri-La Development, LLC and owner PN Investments, Inc. As with the first Salinas Homekey project, Shangri-La is the buyer of the $7.1 million property. (If and when the city is awarded funds, some of that money will go toward the total purchase cost.) Shangri-La contends Salinas-based PN Investments failed to vacate the premises by Dec. 31 as promised. It’s asking a judge to award it the property title and $500,000 in damages.

Salinas Director of Community Development Megan Hunter is optimistic that the lawsuit will not stop completion of the sale. Her staff has continued working on a plan approved by the Salinas City Council in November to apply for Homekey funding with a goal of providing permanent supportive housing for very-low-income youth ages 18-24. Should the funding come through, they will use the Sanborn Inn as interim housing while the second motel, the Salinas Inn at 1030 Fairview Ave., is renovated. They estimate renovation of both motels will take about 18 months.

The city is also partnering with Shangri-La’s nonprofit partner, Step Up, to provide supportive services as it’s already doing at the first Homekey site. Those services include an onsite manager and case workers who build relationships with residents and teach them life skills. Hunter says so far there have been few problems at the 2020 Homekey site and she’s watched as residents, once homeless, have stabilized their lives in their apartments.

It’s currently only about 50-percent occupied due to unforeseen federal requirements for an environmental review before completing conversion of all the rooms.

Meanwhile, officials in Pacific Grove and King City have also partnered with Step Up and Shangri-La in their applications for Round 2 Homekey funding.

The first hearing in Shangri-La’s suit is scheduled for May 24.