San Jose has a new team lined up for the Arena Hotel, the 90-room interim homeless shelter on The Alameda that has drawn years of complaints. The City Council voted unanimously on Oct. 6 to open negotiations with Episcopal Community Services of San Francisco to take over the site and turn it into longer-term housing.
The nonprofit replaces the project's original partners, developer Urban Housing Communities and operator HomeFirst Services of Santa Clara County. According to Hoodline, citing The Mercury News, city officials concluded the earlier proposals were not financially feasible. Propertyworx LLC, the second-highest scorer in the city's selection process, was named as a backup if talks with Episcopal Community Services fall through.
What the council actually approved
The resolution lets the city's housing director sign a three-year exclusive negotiating agreement with Episcopal Community Services, with two optional six-month extensions, according to the council's legislative file. That gives the nonprofit up to four years to bring back a final plan. The deal covers two pieces: converting the existing hotel into housing that keeps the income and rent limits in its state Homekey agreement, and possibly building mixed-income homes on the site's parking lot for households earning up to 120% of area median income.
State figures cited by Hoodline put 120% of median income in Santa Clara County at $246,600 for a family of four, so the lot could serve moderate-income workers rather than only people leaving homelessness. The city is also asking the state to remove the original partners from the Homekey grant and make San Jose the sole grantee, a step that has to happen before new financing can line up. Hoodline reports roughly $46 million in combined state and local money has already gone into the site.
Why neighbors pushed for a change
The council delayed its vote in August to hold community meetings after neighbors and merchants voiced frustration with conditions at the hotel. Residents had complained for years about broken elevators, food safety problems and gaps in services, which led the city to bring in nonprofit WeHope as operator late last year.
Big questions remain. The legislation includes no unit counts or construction budget, and city officials have not said where current shelter residents will go once renovation begins. Those details are expected when Episcopal Community Services returns to the council with a final proposal.