City of Bend negotiating to buy one of two hotels for shelter use

Published 5:00 am Saturday, May 8, 2021

The city of Bend is negotiating the purchase of two hotels in the hopes of buying at least one of them and converting it into a homeless shelter.

On Wednesday, the Bend City Council gave City Manager Eric King the authority to enter purchase agreements with the Rainbow Motel at 154 NE Franklin Ave. and the Bend Value Inn at 2346 NE Division St.

The agreement for the Rainbow Motel, which has 50 rooms, is up to $4.7 million. The Bend Value Inn, which has 28 rooms, is up to $2.5 million.

The city’s hope is to receive money from Project Turnkey, a grant program operated by Oregon Community Foundation to help cities or other organizations buy and convert hotels into homeless shelters.

The program was established by the Legislature, which allocated $35 million for the program.

The city has been working to identify a hotel through this program since the beginning of this year, but ran into challenges. The city earlier this year entered a similar agreement with a different motel, the Old Mill & Suites, but backed away after discovering significant foundational and structural issues at the property.

That setback put Bend at the back of the line when it comes to the grant process, Economic Development Director Carolyn Eagan said Thursday. Oregon Community Foundation gives out grants on a first-come, first-serve basis.

As of mid-April, 10 grants have been approved and 12 are in the due diligence process, meaning a city or organization is evaluating a chosen property to make sure it is suitable, according to the Oregon Community Foundation website.

“We are just really late to the game in terms of getting a property in queue, so that’s the reason we have two (purchase and sale agreements),” Eagan said.

Eagan said if the city does not receive money from Project Turnkey to buy one or both of these properties, there are other funding mechanisms to explore, including federal money from the American Rescue Plan.

The city will now do appraisals and further evaluate the condition of these properties, and revisit the agreements at the next council meeting on May 19.

“We are trying to meet the No. 1 community need, and that is we need a year-round low barrier shelter,” Eagan said.

The Bethlehem Inn, a Bend-based homeless shelter, received $2.7 million last month to convert a hotel in Redmond into a shelter.