State accuses Shangri-La Industries of seeking to “take advantage” of the Homekey program to house homeless in San Bernardino, Redlands and Thousand Oaks.
Shangri-La Industries’ logo is reflected in a gold-plated shovel during a groundbreaking ceremony at the former Good Nite Inn in Redlands, renamed Step Up in Redlands, in August 2022. Shangri-La Industries rehabilitated the property to provide permanent housing for 100 homeless residents under the state’s Homekey program.
Also named as a defendant is Step Up on Second, the Santa Monica-based nonprofit that partnered with Shangri-La to provide services to the homeless and to serve as the property manager at the seven converted motels. More than half a dozen third-party lenders Shangri-La tapped to secure loans for the motel projects also are named in the lawsuit.
Shangri-La and its partner local agencies return all the Homekey funding granted by the state, plus attorney fees. The Good Nite Inn in Redlands, seen here in 2021, was to be converted into a 98-room homeless shelter with the help of $30 million in state Homekey funds.
San Bernardino County was awarded $8.3 million by the state on Nov. 24, 2020, for the conversion of 76 units to permanent housing for homeless people at the former All Star Lodge.Gov. Gavin Newsom launched Project Homekey in June 2020 to protect unhoused individuals from the threat of the coronavirus pandemic.
Lipka also said Step Up, like some of the subcontractors, had not been paid by Shangri-La for services it provided for motels in Redlands, San Bernardino and Salinas over the past two years.Step Up in Redlands welcomes its first formerly homeless residentsthat Shangri-La, after being served its second default notice by lender Arixa Institutional Lending Partners, had been working with Arixa to refinance the loan and address all outstanding issues.
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