Sacramento City Council takes step toward turning downtown motel into homeless housing

Despite some pushback, a downtown hotel is a step closer to becoming 92 units of permanent housing for the homeless.

The Sacramento City Council unanimously voted Tuesday to apply for state funding to convert the Best Western Sutter House at 11th and H streets into permanent supportive studio housing units for homeless adults and couples, called Central Sacramento Studios.

Representatives from downtown businesses and the nearby neighborhood association raised concerns with the project.

There is a significant shortfall of hotels downtown, said Mike Testa, president and CEO of Visit Sacramento.

“We cannot significantly grow this market without more hotels,” Testa told the council. “We cannot create your maximized return on investment on the Convention Center without more rooms.”

Michael Ault, executive director of the Downtown Partnership, agreed.

“We understand the need to provide shelter for our unhoused neighbors within the core and we are committed to working on that, we just want to make sure this is the best location and are there other locations that can be utilized that don’t take hotels offline?” Ault said.

But the motel would not have continued to be a motel, Councilwoman Katie Valenzuela said. The owner, Alameda-based Thunderbird Lodge Sacramento, had entered into a purchase and sale agreement with an affordable housing developer, said Sacramento Housing and Redevelopment Agency executive director La Shelle Dozier.

“When it comes to economic development and economic recovery, we will forever be hampered by the fact that we have citizens sleeping in front of the Convention Center, sleeping in front of the restaurants,” Valenzuela said. “If we are going to attract all the amazing events and things we want in our region, we have to figure out a way to get people off the streets.”

In addition, the city has made “significant progress” on opening a new Convention Center hotel, Mayor Darell Steinberg said.

Sean Wright, of the Alkali and Mansion Flat Historic Neighborhood Association, asked the council to delay the vote. He said there are already several permanent supportive housing projects in the area.

“This is an incomplete and rushed project hidden from public view,” Wright said. “The last time the city embarked on a rushed project for the homeless was the City Hall garage ... please continue this item to allow time for more stakeholders to comment.”

Councilman Eric Guerra made a substitute motion to delay the vote for two weeks, with direction to staff to come back with a strategy for funding projects in other parts of the city. Councilman Jeff Harris supported that motion, but it failed. Both have motels in their districts they want to use for homeless housing.

Harris has been trying to convert the Motel 6 at 30th and N streets in East Sacramento into homeless housing since 2019, he pointed out. Guerra is trying to convert the Rodeway Inn at 6610 Stockton Blvd. into homeless housing, he told The Sacramento Bee.

The council earlier this month voted to apply for Homekey funding to convert the Staybridge Suites in the Promenade shopping center in North Natomas into housing for homeless families. If state officials select both the downtown and North Natomas hotels for Homekey funding, it would take essentially all of the funding allocated for the region, Dozier said. Harris and Guerra said they were worried that would mean there would not be any funding left for their motels. But there is also an additional $200 million available in a statewide category, Dozier said.

The city’s $100 million Comprehensive Siting Plan to Address Homelessness, which the council approved in August, includes six converted motels, Steinberg said.

Steinberg said the city is committed to opening more motels for visitors to stay in downtown and midtown, but did not want to delay the vote.

“If we were to say ‘let’s wait, let’s hold off on this,’ that sends a signal we are not as serious about this mission as our prior votes and prior actions have demonstrated,” Steinberg said.

Valenzuela also did not want to delay the vote because the Homekey program is first come, first served, she said. Applications opened on Sept. 30.

The council added an item to the motion to direct SHRA to look at other sites in other areas of the city for homeless housing.

If the project is funded, construction would start early next year, and it could open in late spring, said Christine Weichert, SHRA’s assistant director. It would remain homeless housing for at least 55 years, though SHRA could ask the state if it could move the units to another location down the road, Weichert said.

Sacramento last year opened homeless housing at the WoodSpring Suites hotel in south Sacramento’s Parkway neighborhood, which received Homekey funding. The city also received funding through the program for a River District hotel, but that project was nixed due to an appraisal issue.

For the Best Western, the sale amount is the same as the appraisal amount, so that problem will not arise, Dozier said.

Gov. Gavin Newsom last month announced a $2.75 billion statewide expansion of Project Homekey — one of his key efforts to house homeless individuals during the coronavirus pandemic. It’s a partner program to Project Roomkey, which temporarily places homeless people in hotels. Sacramento County currently operates three Roomkey hotels, though they could close next month.