Current round of state Project Homekey funding runs out, meaning longer wait for some Sonoma County projects

California has allocated all of the $200 million now set aside for new homeless housing in the Bay Area through its Project Homekey program, state officials confirmed this week.

At least four Sonoma County homeless housing projects, however, missed out on those dollars, meaning they may now need to wait until the program’s next funding stage in October to learn whether they’ll receive Homekey grants, scrambling financing plans for some.

The exhaustion of Homekey dollars in the Bay Area was not a surprise. The state’s $3.5 billion program — geared to repurpose existing buildings for homeless housing and build new sites — has awarded grants to qualifying projects on essentially a first-come, first-served basis.

Cities and counties were encouraged to apply quickly after the present round of funding was announced in September.

Among the local projects that lost out are two high-profile Santa Rosa developments: Catholic Charities’ $43 million Caritas Center in downtown and St. Vincent de Paul’s bid to rehabilitate the former Gold Coin Motel for long-term homeless housing.

Catholic Charities of Santa Rosa was recently informed it may need to reapply for $11 million in Homekey funds to help build and operate a 40-room family facility at its 46,000-square-foot Caritas Center campus.

Officials said the setback won’t delay the project, under construction at a city block-sized complex between A and Morgan streets. It’s already received millions of dollars in public and private money.

Jennielynn Holmes, head of homelessness services at Catholic Charities, said any shortfall will be made up by loans the nonprofit has already taken out to help pay for construction.

“Our project is financed, and it will get done,” Holmes said.

The city’s other Homekey project, the former Gold Coin Motel at 2400 Mendocino Ave., also may need to reapply for the $13 million it is seeking to convert the dilapidated motel into 54 units of supportive housing.

The implications for the project were not clear this week. Jack Tibbetts, executive director of St. Vincent de Paul of Sonoma County, has declined to answer Press Democrat questions since a Jan. 28 story that revealed a number of renters complaining of squalid conditions at the former motel, bought by the nonprofit in 2019.

In the current round of funding, the program’s second, the state has awarded a combined $20 million to two planned Sonoma County sites. They include a 60-unit transitional housing project in Rohnert Park, and a 22-room interim housing site in Healdsburg, which the city plans to create by buying and renovating the L&M Motel.

In addition to the two Santa Rosa projects, at least two other proposed sites, in Guerneville and Sonoma Valley, will miss out on their share of the money allocated for Bay Area projects. Together, the sites could create around 150 new units, according to officials.

“I didn’t think we’d get them all,” said David Kiff, interim director of the county’s community development commission, its top housing agency. “I thought it would be pretty cool if we got three of them, and I think we’ll get (at least) three of them.”

Another planned 60-unit hotel conversion project in Petaluma has yet to receive a Homekey grant. But city officials are confident the state will by next week award roughly $14 million for that project planned for the Americas Best Value Inn.

Kiff said the county government may need to wait months to find out about the around $9 million it’s seeking for a planned Homekey site at the shuttered George’s Hideaway resort and hotel in Guerneville. The delay may affect the county’s ability to purchase the property, he said, which could throw a wrench in its plans to turn the site into eight rooms and up to 26 tiny-home cabins for homeless people.

Some proposed local Homekey projects may end up not getting any funding, Kiff said. He added the county as a whole is seeking to create a relatively large number of sites given its size — and that focusing on already approved or operating sites could have its advantages.

“It’s not a bad thing to see how those (sites) start operating and how much they change the system,” he said.

Local jurisdictions that didn’t receive a Homekey award this round could still be eligible for a piece of the at least $238 million the state has held in reserve for projects across the entire state. That money will be awarded in the coming months, based in large part on how project applications are scored by the state housing department.

After that money is distributed, the next and potentially final grant opportunity will be a $1.3 billion funding round available in October. The current round totals about $1.2 billion.

Since its launch during the pandemic, Homekey has helped create at least 6,000 units of housing statewide, according to officials.

In 2020, the county received a total of about $17 million in Homekey funds to help buy the former Hotel Azura in Santa Rosa and Sebastopol Inn. Both are currently sheltering around 100 formerly homeless people at risk of COVID-19 complications. The plan is to convert the hotels to about 70 total units of permanent supportive housing by sometime next year.

The Kashia Band of Pomo Indians has also received over $2.5 million to buy a 20-room hotel in Santa Rosa for homeless tribal members.

Officials have said local Homekey sites, which could amount to over 300 units if all proposed projects are completed, are intended for Sonoma County’s roughly 500 chronically homeless people.

The county’s last annual homeless count in early 2020 found the total unhoused population was around 2,700.

Blue markers are proposed sites in the process of applying for state funding. Green markers are sites that have already received funding and yet to open. Yellow markers are sites currently housing formerly homeless residents.

In all, two local Homekey sites are in operation, three have received funding and have yet to launch, and five are in different stages of the application process.

Sonoma County projects have so far received about $40 million in Homekey funds. Local jurisdictions are in the process of seeking at least another $47 million.

Plans for a site with 20 tiny homes in the Sonoma Valley have yet to be submitted to Homekey, Kiff said.

County officials are also working on an application to buy and convert the Redwood Inn in Santa Rosa into 24 supportive housing units. Since that proposed site is intended for unhoused youths, it’s eligible for a separate source of Homekey funding than other local projects, Kiff said.

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian.