Tahoe Coalition for the Homeless working through challenges in getting 3rd property open

SOUTH LAKE TAHOE, Calif. - When the State of California awarded the Tahoe Coalition for the Homeless (TCH) $9,576,000 in 2020 to help with their goal of ending homelessness in South Lake Tahoe, it seemed like a great solution for the community. The funds were used to purchase the Red Lodge, El Nido Motel, and Bear's Den motels.

The funds arrived through Governor Newsom's Project Homekey, and so far the program in South Lake Tahoe has been a success through the benefits the first two motels provided the homeless community.

With the funds, TCH purchased three motels to be used as what's known as single-room occupancy (SRO) housing. Lodging properties are retrofitted to accommodate residents for a longer term than what a motel room was designed for.

The first two properties to be converted, the Red Lodge and El Nido, have been operational and housing the formerly homeless at much higher rates than what the original Warm Room ever provided, and full-time housing instead of the winter-only nights the original warming room did.

Since those two properties were opened for homeless services, police calls related to homelessness are down 32 percent. In 2020 there were 1,159 calls for service, and 796 in 2021. Unsheltered homelessness has been reduced by more than 80 percent during that same time period. Calls for medical services and avoidable hospitalizations have been reduced by over 40 percent, according to TCH board documents. Clients pay 30 percent of their income for housing received through TCH.

What is currently a problem for the nonprofit is the third motel, the Bear's Den on Lake Tahoe Blvd.

When TCH purchased it there was still a lease in effect between Vail and the former owners. The ski resort company used it as seasonal housing for staff and their lease did not end until April 26, 2022. TCH conducted life safety inspections and discovered that many units were not safe to inhabit in their condition at the time. There were concerns with the electrical wiring and panel and significant termite damage was discovered in one of the units.

Qualifying individuals were placed in the units that did not have life safety concerns, reaching the current 30 percent occupancy rate. The California Department of Housing and Community Development (HCD) wants the occupancy rate at 50 percent by December 31.

TCH has been asking for proposals from contractors to do the work on the Bear's Den to get the remaining units up to code, but there haven't been any positive responses. They plan on staging the construction so those currently living there can reside in one building while work on the other is being completed.

"We believe it is possible," said TCH Board President Tom Makris of meeting the deadline. "However, this is an older property and, as anyone who has done a construction project knows, it all depends on what you find as you open walls and how quickly your contractors can do the work. We only have so much control."

There has been a flurry of emails between the State of California Department of Justice (DOJ) and attorneys for TCH over the past two months. DOJ states TCH is in breach of contract by not having the Bear's Den running at full capacity.

"TCH's efforts to remedy its breach thus far have been woefully inadequate," stated Carlos Mejia, deputy attorney general, in a letter to TCH dated November 16, 2022.

"TCH has worked towards meeting HCD requirements for the Bear's Den property and desires to work collaboratively with HCD," stated TCH Attorney Gabrielle Janssens in a response letter to Mejia. "As you know, TCH has encountered significant challenges since the contract was executed. However, you and the other recipients of this letter should be aware that it is TCH's intent to be in compliance with the terms of the Agreement and, more importantly, it is TCH's utmost priority to continue to provide housing services to the homeless population in South Lake Tahoe and El Dorado County, regardless of threatened litigation."

"The Bear's Den has been a challenge and has taken longer than we expected. We agree with the Attorney General and HCD that the goal is to complete renovations and place clients as soon as possible and we are close to meeting that goal," said Makris. "The last thing we want to see is any of the people currently housed lose this housing. We are committed to cooperating with HCD and all of our other community partners to do anything and everything we can to achieve that goal."

It is unknown at this time what DOJ has planned as Mejia's November 16 letter was the last one received by the TCH legal team. His letter gave them four terms to accept by November 23 at 5 p.m., the date of Janssens' letter to the State. They want TCH to admit breach of contract, amend the deed of trust to eliminate the requirement of HCD giving a 90-day cure period in case TCH defaults, consent to a lien against Bear's Den for $2,800,000 (TCH says the amount was $2.6M so questioned the extra $200k), and that HCD could use its sole discretion that TCH was no longer capable of running the Bear's Den and that they could appoint a receiver to assume full control.

Janssens asked Mejia:

- What specific provision of the agreement with the Department of Housing and Community Development would TCH be admitting it is in breach of?
- The Agreement provided a grant amount not to exceed $2,600,000. TCH would
like a better understanding of why the lien would be for $2,800,000, $200,000 more than the amount of grant funds provided for under the Agreement.
- What would the duration of the lien be? The Agreement expires five years after its effective date. What would be the conditions for the release of the lien?
- Exactly how would the Department make the determination that TCH is no longer capable of operating Bear's Den? What criteria would it employ?

So far TCH has not had any response to that request.

TCH is in the middle of a major fundraising campaign with a goal of raising at least $250,000. They have already obtained $100,000 according to Janssens. These funds are being raised for the ongoing operation of the properties and services provided to the homeless individuals TCH serves, and must be used for that purpose. Funds received from the HomeKey grant could only be used for the purchase of buildings.

The Coalition is the only homeless provider in South Lake Tahoe and the largest in El Dorado County and provides the only option for sheltering unhoused adults in the city limits. They provide respite rooms for
homeless patients treated at Barton Hospital who need a safe sheltered location to recover after being discharged. Barton will not release unless there is an address of housing provided.

"Funding has also been a challenge, as it is for many non-profits," added Makris. "All of the money we have received from all sources, public and private, has gone to further our mission. When we acquired the properties we anticipated follow-on funding to support operations, but that funding has been slow to materialize. It is a challenge, but a challenge we are facing with energy and commitment. We are very gratified by the support we are receiving from the community and from our partners and we want to thank everyone who supports our mission."

For more information on TCH, visit https://tahoehomeless.org/.