SACRAMENTO (CBS13) — Sacramento's plan to turn hotels into homeless housing is hitting a roadblock.
Project Homekey is supposed to help get people into permanent housing, but now a lawsuit is being filed to stop one of the projects that is right across from a prominent riverfront development. It's a prime piece of Sacramento real estate located along the American River Parkway near Interstate 5, in what's known as the River District.
Owner Steve Ayers told CBS13 in 2018 he had big plans for the property that for decades was the site of the Rusty Duck and Hungry Hunter restaurants.
"We are standing in front of what I think is one of the best blank canvases in the entire city of Sacramento," Ayers said in 2018. "For me what it gets down to is location, location, location."
The Rusty Duck was torn down last year to make way for new construction, but now there's concern that the city's plan to fund a new homeless shelter across the street will drive away developers looking to revitalize the property.
"I am actually worried about continued investment in the river district with more concentration there," Sacramento Vice Mayor Jeff Harris said.
This week city leaders approved spending more than $12 million to convert the Hawthrone Suites Hotel on Bercut Drive into more than 200 permanent apartments for the homeless as part of Project Homekey.
Project Homekey is part of a $600 million initiative by Gov. Newsom to convert hotels and other properties into long-term housing.
Those that work in the neighborhood say the area already has a majority of the city's homeless shelters and now a lawsuit is being filed to stop the project.
"The property and business owners have made it really clear that this is just a bridge too far," Jenna Abbott, Executive Director of the River District, said.
The business district opposes the homeless hotel project and says the city is going back on a resolution they made in 1989 to not add any additional shelters in the area.
"Our challenge is we're being labeled the homeless district instead of the River District," Abbott said.
But Mayor Darrell Steinberg says getting people off the streets is a top priority.
"For anyone who opposes any effort to bring in hundreds of people, would you rather have those same people remain outside on the sidewalk in tents?" Steinberg said.
No formal development proposal for the Rusty Duck site has been submitted to the city yet, but the property is zoned for housing and retail.
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