City of Salinas named one of the defendants in state lawsuit against Shangri-La Industries

SALINAS, Calif. (KION) - The Sanborn Inn, Good Nite Inn, and Salinas Inn are former hotels that are now suppose to provide shelter for the homeless.

But Community Homeless Solutions says a partnership with Shangri-la Industries and Step Up fell through, leaving the projects in jeopardy of losing major funding from the state.

"The sadder thing is, will this make people not want to invest in programming for people experiencing homelessness," said Amy Price, who is the Director of Development with Community Homeless Solutions.

According to court documents, The state put more than $16 million into the Sanborn Inn project on South Sanborn Road, over $13 million into the Salinas Inn site on Fairview Avenue, and close to $7 million into the Good Nite Inn on Work Street.

This comes at a time when community Homeless Solutions says they have seen an increase in homelessness during the winter.

"200 or 300 more beds for people experiencing homelessness," said Price. "It makes a big difference because That could be anywhere from 10 to 20% of the unsheltered people on a given night."

Shangri-la is being accused of misusing funds on a King City project which had the city filing a lawsuit against the company on Monday.

City of Salinas officials say for now there is not a plan to follow King City's lead and sue Shangri-la or step up for breach of contract.

The unhoused people Price works with say they were looking forward to more shelter in Salinas.

"Many people don't realize how much the clients follow the news on things like this," said Price. "They know when there's going to be something new built and they know if they're going to be eligible,"

Price says her clients feel shame when they have not had access to areas to get cleaned up or have had a safe place to rest, and the units in the three hotels in Salinas would have been life-changing for the unhoused.

"Shelters are a place sometimes to sleep." said Price. "Sometimes we call them navigation centers because this is where you figure out how to navigate your way back,"

In total, Project Homekey would have had about 500 units across California, including 44 in King City.