With the purchase of the Rainbow Motel off Franklin Avenue, the city of Bend sees nothing but potential beyond its use as a transitional homeless shelter.

“This is as big of a move as it appears,” Councilor Anthony Broadman told The Bulletin on Thursday.

At its meeting Wednesday, the Bend City Council approved

buying the 1 acre property at 154 NE Franklin Ave. for $4.55 million.

The money for the purchase comes from the city’s general fund, which is primarily made up of property tax revenue.

The city has a vision for the future of the site to be any number of public-focused projects, including as a new site for City Hall, affordable housing or a civic plaza.

“In terms of where the future of our city is, this is an important geographic spot,” he said.

The City Council considered purchasing the Rainbow Motel in the spring with state funding from the Turnkey Program, which allows cities to buy hotels and turn them into homeless shelters, but decided to not buy it at the time because another hotel — the Bend Value Inn — was more affordable.

The change since then is that the homeless problem has grown more acute, Broadman said.

“We have an increasing need from a regulation of right of way standpoint, from a human rights standpoint that we are providing shelter for everyone in our community,” Broadman said. “Increasing need has affected how we look at shelter and housing policy.”

The City Council has a goal to create shelter for 500 homeless residents by mid 2023, as well as 1,000 rent- and price-restricted housing units. This project has the potential to add between 40 and 60 beds for homeless residents, Broadman said.

The Bend Chamber of Commerce in the past has argued against this property turning into a transitional shelter.

The chamber has argued that given its location at the gateway to downtown, the site has more potential as housing and could generate tax revenue in a district the city is trying to revitalize.

Broadman said he sees the city purchasing public space like this as an important investment in the area.

“Investing to make sure people are safe is an important step in revitalization,” Broadman said. “Having the city play this kind of development role for potential housing or civic opportunity is an important part of the revitalization.”

Broadman said his goal would be for the transitional shelter to open this spring, and then work together with Deschutes County and other jurisdictions to come up with more long term homelessness solutions. He does not envision this property being used as a shelter for more than two to three years.

A nonprofit would be chosen through a competitive process to run the shelter, like the city has done with other shelter projects, but a plan for continual operations funding is something the city “needs to work on,” according to Broadman.