After a marathon informational session that lasted more than two hours late last month regarding a project that could have turned Bonanza Inn into an affordable housing option, Yuba City announced it will no longer move forward with the plan.

The project that was under consideration was submitted by Habitat for Humanity Yuba-Sutter. The nonprofit was seeking to utilize Homekey 2.0 funding provided by the 2020 Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, to provide an affordable housing option for residents in the Yuba-Sutter region.

Habitat’s plan was to convert Bonanza Inn, located at 1001 Clark Ave. in Yuba City, into 130 low-income apartment units.

Joseph Hale, CEO of Habitat for Humanity Yuba-Sutter, presented the plan to the Yuba City City Council at its last meeting on Dec. 21 and the issue was expected to come up again for a vote at the council’s next meeting on Tuesday, Jan. 18.

“This program is not just a homeless program,” Hale said during a presentation at December’s council meeting. “It is a permanent housing program. This is where individuals will live for long term. These individuals aren’t living there for free. These individuals pay rent, just like everyone else, and live under the same rental conditions as other people. So, this isn’t a shelter and won’t be operated like a shelter.”

At the time, Hale said $1.45 billion was set aside for California Homekey 2.0 funding. That money was then made available to purchase and recondition hotels and build permanent housing facilities with supportive services, the Appeal previously reported.

All funding needed for the project would have been available through the state’s Homekey program, Hale said. If the city decided to deny the project, then that funding would be spent elsewhere in the state.

During the December meeting, Hale said there would be an initial five-year commitment to the program, but a 55-year commitment was ultimately being sought by Habitat for Humanity. If the city didn’t want to do the service anymore, the property could be sold, he said.

Hale said at December’s council meeting that a high rate of elderly have become homeless because of a disparity in income and rental rates in the region.

“In addition to the homeless population we currently have, people enter into homelessness,” Hale said. “As you have housing that’s not available to them, it increases that number. They don’t have a place to go. Rent’s increased, there’s only so many houses available. This is a good way of preventing those increases, getting control of it, and working through that program.”

On Friday, Hale said as of Dec. 31, 2021, there were 727 applications for housing requests to Habitat for Humanity and about 400 were from Yuba City. He said some on the list have been waiting for years.

“A huge number of those are elderly individuals,” Hale said during December’s council meeting. “People who have medical care. People the hospital can’t release until they have a safe place for them to go because their medical needs are significant. That’s a big part of what we look at when we do this program.”

The city, however, decided Friday not to move forward with the project. Yuba City Mayor Dave Shaw said that even though the city and council wants to continue to work on affordable housing options for area residents, the project presented by Habitat did not fully answer the council’s and community’s concerns. The Appeal was provided lengthy answers given by Habitat to the community and council about their concerns, but Shaw said those were not sufficient.

“We are extremely supportive of what Habitat for Humanity does for our community, but at this time there are too many unknowns for us to proceed,” said Shaw in a release sent by the city on Friday morning. “It is not clear what the long-term revenue commitments from the City would be, or what the long-term impacts on the community would be given this property’s location.”

Johnny Burke, executive director of the Sutter Yuba Homeless Consortium, said the decision by the city would be a huge loss for the community.

“I am very disappointed at the lost opportunity to permanently house 160 of our most vulnerable residents in the Yuba City area,” Burke said in an email to the Appeal on Friday.

In a phone call with the Appeal and in response to the city’s decision not to move forward with the Bonanza Inn project, Hale had one simple response: “I think what it’s really about is NIMBYism. You can always ask for more.” 

Hale said Habitat did present what was asked of it and that considerable money and hours were poured into the presentation of the project and answering questions that the city and community had.

He said projects such as the one that was proposed for Bonanza Inn usually cost Habitat about $50,000 in time and effort. For Bonanza, Hale said it cost close to $80,000-100,000 for everything that was involved with attempting to make the Bonanza project a reality. 

“You can only do this so many times before you get burned out of funding,” Hale said.

He said Habitat sent the city a 10-year budget that showed the plan would be successful and other legal documents that would be required. He also said what was being requested by Yuba City was far more than what any other jurisdiction they have worked with previously with similar projects have asked for.

“I think we provided a vast amount of information,” Hale said.

Before the city formally announced on Friday morning its decision not to continue with the Bonanza Inn project, Hale said Habitat had been working with the city to provide even more requested information, such as budget items. He said there were talks on Tuesday about the potential resolution for the council’s next meeting and that up to Thursday night both Habitat and the city were all working on that.

“Having to do all this work and spend all this time … I don’t understand why it maneuvered in that way it did until the very last minute,” Hale said. “I don’t know how it got to that point.” 


All about the money

In the release, the city said council members requested that Habitat for Humanity provide further clarification on the project’s business plan, financing and long-term implications, something Shaw said in a call with the Appeal on Friday wasn’t fully provided before the council’s next meeting.

“The City would be committing to a 55-year project. Setting aside the uncertainty of the financial viability of the project to be self-sustaining for 55 years, the City would also lose about $250,000 a year in existing Transient Occupancy Tax and property tax that the business currently generates,” Shaw said in the release. “That’s approximately $14 million in potential lost tax revenue alone. While our heart strings are definitely pulled, we can’t ignore that we will be losing significant revenue. We must be absolutely clear on what the additional costs and obligations to taxpayers might be before moving forward with any Homekey project.”

Hale said those numbers are misleading. He said the Transient Occupancy Tax shouldn’t be a factor in the city’s decision because there are other hotels in the area and others planned that would take on anyone who otherwise would have stayed at Bonanza Inn.

“I don’t think that’s really a factor. I would really challenge that as something that’s realistic,” Hale said. “I’m sure they are paying a lot more for law enforcement protection for the homeless than what they would be losing from revenue from TOT. Homelessness is costing the city more than any revenue lost from Bonanza would have been.”

Yuba City staff is now recommending that Habitat for Humanity seek other potential Homekey project locations in Yuba City that may be interested in selling, and to present a thorough business plan that would outline long-term funding, operation and viability of the project, the city said. 

“The City Council recognizes the need to create additional affordable housing in Yuba City, and encourage staff to work with Habitat for Humanity as well as other housing partners to develop viable projects,” Shaw said in the release.

Hale said Habitat was looking at other possible locations, but because this specific project was not approved, that homelessness in the area would increasingly be an issue for at least the next couple of years.

“There’s a huge lack of affordable housing,” Hale said. “… This would have helped a lot and cleared out a number of people. With the focus on elderly and the disabled, this is really sad because these people will now be seeking shelters.”

He said without a permanent home or reasonable solution, many who are left homeless simply don’t have the resources or means to plan for any kind of stable future, something he felt the Bonanza project would have provided.

“I think and understand the fear that people face. I have nothing to say against those people that live there and I appreciate their passion and desire to speak with us,” Hale said. “We want to build a good community. These types of programs get people on track. They will see positive changes in their community. If you live that homeless lifestyle or are at risk of homelessness … if you can’t think, where do I sleep the next day, next month … how do you sit there and plan a year in the future to start a new career or go to school or better your life in some kind of way? It’s a stepping stone to do other things. I think what people see is the person that screams the loudest that is often noticed. … They want to judge all homeless off of one person they’re seeing.”


Project impact

According to Hale, project Homekey 2.0 at the Bonanza Inn would have provided the following:

– 130 low-income apartment units.

– Permanent housing where tenants are expected to pay rent.

– No length of stay limits.

– Individuals are expected to sign a rental agreement and would be bound by the same restrictions as other renters in California.

– The project will focus on the elderly, disabled and veterans.

– An estimate shows 25 percent of renters will be veterans.

Hale said the housing at Bonanza Inn would have been a gated community that would have required guests to check in to keep other residents safe and would have on-site staff at all times. All vehicles on the property would have needed to be registered and insured and no RV parking would have been allowed.

Residents would mostly be from the area with exceptions made for domestic violence victims, he said in December. The site also would have provided case management, counseling and medical services. Hale said representatives from Adventist Health/Rideout come out every Friday to similar area facilities to help deliver prescriptions and do check ups.

During the December council meeting, several community members spoke both for and against the project.

Residents who were concerned with the negative impact such a project would have on their neighborhood and property values, spoke out during the meeting. They said the Bonanza Inn property should be turned into something that would be more attractive in the heart of the city. 

“We are surrounded by the less fortunate and it’s time to evaluate the direction the city is going,” a resident said. “Do we want the center of our town to be a constant reminder of low economy? I would think any new business looking at a new location would have second thoughts for a bright future close to the proposed project. We need to pump up revenue and encourage business growth. It would make more sense in a place where there was planned development, not in the center of Yuba City.”

Victoria Yeager, widow of legendary pilot Chuck Yeager, also spoke to the council in December about the project.

“While you don’t want to pull on the heart strings, how many of you have said thank you for your service to a veteran? How many of you have meant it? Actions speak louder than words, as we all know,” Yeager said. “I’d hate to think of General Yeager and all the maintainers if they had limited resources, not having a place to live. I just want to remind everybody, let’s put our actions where our words are. Especially with the neighbors, I understand the concerns, I really do. But maybe it’s up to you to thank a veteran for their service and get involved with Habitat for Humanity and help them figure it out, with you.”

Those who have been directly affected by similar Habitat for Humanity programs such as Harmony Village and Prosperity Village, also delivered heart-felt messages to the council regarding the proposed Bonanza Inn project and their experiences in these types of communities.

“I wasn’t homeless, but I was close to it,” said an elderly resident from Harmony Village at December’s meeting. “I just feel really blessed that I’m able to live there. I feel secure and everybody’s friendly and outgoing. You look after one another and you help each other. I just feel real good about living there. I’m thankful that I can wake up in the morning and I have a warm roof over my head and a cool spot in the summertime.”

A Vietnam veteran and another resident of Harmony Village also spoke at the meeting.

“It’s safe, it’s secure, there’s nothing to worry about,” he said. “I don’t see what all the negative talk is about it. If I wasn’t (living) in Harmony Village, I would be homeless. … Harmony Village helped me. They gave me a chance to be safe and be a productive person once again.”

Hale said Friday that the issues of homelessness in the Yuba-Sutter region won’t improve unless something substantial is done – much like what the Bonanza Inn project would have accomplished.

“It doesn’t get better when we don’t actually do anything, in fact it will get worse,” Hale said. “There’s no doubt that a certain number of people will enter into homelessness in our community because of income and rental rates.”

Hale said that Habitat will continue to do what it can to help the community and be a resource for affordable housing.

“We’re going to try it again. We’re going to go back to the drawing board,” Hale said. “This is what we do. We understand some might come to fruition. We don’t do this as a benefit for us. This is a community service. We want to open eyes and have people see the need.”

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