Here’s Modesto’s plan to turn motel into housing for homeless. What about current tenants?

Modesto will seek a $17 million state grant for a $23.2 million project to buy and convert the 54-room Travelers Motel on North Ninth Street into permanent housing with services for people who are homeless.

The City Council on Tuesday voted 6-0 to submit a request for the grant in partnership with Fresno-based affordable housing developer RH Community Builders. (Councilwoman Rosa Escutia-Braaton was not at the meeting.)

Modesto and RH Community Builders are seeking funding from Project Homekey, the state initiative to provide housing for people who are homeless or at risk of homelessness.

The proposed project would provide 38 studio apartments for homeless youth ages 18 to 25 and 15 studio apartments for anyone who is homeless. One apartment would be for the manager.

The service providers would include the Center for Human Services and Stanislaus County’s Behavioral Health and Recovery Services. Prospective tenants would need to have gone through what is called the coordinated entry system, in which they are assessed and referred to services.

The motel already provides long-term housing for 38 households, according to a presentation at Tuesday’s council meeting. The motel manager last week said about 40 of the rooms are occupied with long-term guests, and the motel’s other rooms are not in use.

The manager declined The Bee’s request to speak with the motel’s residents.

Councilman David Wright was concerned about what would happen to the people now living at the Travelers if the city and RH Community Builders receive state funding and the project becomes a reality.

Wright said he assumed these people are low income and asked how they could find new homes when Modesto has so little affordable housing.

RH Community Builders official Machael Smith told council members that state and federal relocation law protects long-term tenants and RH Community Builders uses a consultant to relocate them.

The Traveler Motel project’s $23.2 million cost includes $2.15 million to relocate the people now at the motel. Two local Medi-Cal providers will provide the $2.15 million from a state program, according to the Tuesday council presentation.

Wright asked Smith how much motel residents are paying in rent. She said could not provide that information without first checking with RH Community Builders’ legal team.

Housing of the last resort

Stanislaus County Superior Court records show the motel owner charged $325 and $375 a week and $795 and $975 a month to four different tenants in 2018 and 2019. The owner had filed what are called unlawful detainers to evict the tenants over nonpayment of their rent. These were the most recent unlawful detainers filed against tenants.

Public records list the owner as MRVK Hospitality Group in Sloughhouse in Sacramento County. A request for comment made last week through a family member was not returned. Motel rooms can provide housing of last resort for people with bad credit and prior evictions.

The $23.2 million includes purchasing the Travelers Motel for $6.4 million. Smith — RH Community Builders’ community development director — said in an interview that works out to $118,000 per motel room and is a competitive price in the San Joaquin Valley for acquiring motels for housing.

California released what is called a notice of funding availability March 29, saying it has $736 million for Project Homekey’s third round. The NOFA states $43.3 million of that has been set aside for projects in the San Joaquin Valley (which includes Modesto) as well as $75.8 million for projects that target homeless youth and $73.6 million in discretionary funding.

The state will fund a Project Homekey application as long as it scores high enough and funding is available. Applications can score high for projects that provide housing for homeless youth and are close to services.

The Travelers Motel has a bus stop out front, is about a half mile from Modesto Junior College and less than two miles from the Center for Human Services’ Youth Navigation Center, according to the Tuesday council presentation.

The state encourages applicants to submit their requests quickly because of the limited third-round funding. Modesto and RH Community Builders will be submitting their application in the next week. An applicant will know within 60 to 90 days of applying whether the state will fund its project.

Relocation comes first

If the project receives funding, the Travelers Motel residents would be relocated first before works starts on converting the motel. The converted housing would be occupied by summer 2024, according to Tuesday’s presentation.

Besides the $17 million Homekey grant and the $2.15 million from local Medi-Cal providers, the funding for the project includes $2.5 million of the U.S. Housing and Urban Development funding the city receives and about $1.8 million from a group of homeless service providers called the Stanislaus Community System of Care. The city is a system of care member.

Modesto would lend RH Community Builders about $2.3 million of the HUD funding for the project and spend $200,000 of the HUD funding to cover its own costs related to the project.

This is Modesto’s third application for Project Homekey funding.

The city and its nonprofit partners were awarded two grants in 2022. They received $1.7 million for the purchase of a newly constructed seven-unit apartment building for Stanislaus County Behavioral Health and Recovery Service clients. And they received $3.9 million for the purchase and conversion of a Ninth Street office building in downtown into 14 apartments for young people 18 to 25 years of age.

Smith said RH Community Builders and its partners have received five Homekey grants to convert motels into permanent housing with services in Tulare, Fresno and Merced counties.