Los Angeles/ Real Estate & Development
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Published on May 22, 2024
Anaheim Advances Beach Boulevard Revitalization, Considers Eminent Domain for Rainbow Inn AcquisitionSource: City of Anaheim

An ambitious plan in Anaheim to transform a stretch of Beach Boulevard by replacing aging motels with affordable housing is progressing as city officials move to acquire another property, the Rainbow Inn. Anaheim's City Council, acting in the capacity of the Anaheim Housing Authority, has approved the use of the city's right to acquire private property for public use, potentially resorting to eminent domain if negotiations with the motel's owners falter, as reported by the city's official website.

Efforts to negotiate a sale for the 42-room motel, owned by Dhanuba Hospitality Inc., have hit a standstill, despite the city's $6.9 million offer last December, the proposed redevelopment aims to create a combined 2.7-acre site for 120 apartments with affordable rents and 15 townhomes at market prices – Anaheim already owns adjacent motels which were acquired and shuttered due to health and safety issues and inhumane conditions; the Covered Wagon Motel was purchased for $6.6 million, and the 45-room Anaheim Lodge for $7.6 million, reflecting the market value at the time influenced by California's $1.4 billion Homekey program.

Without incorporating the Rainbow Inn into the project, the city would face the challenge of developing fewer affordable homes across two separate, smaller plots at a higher cost. The planned acquisition includes arrangements to assist any long-term residents with relocation, ensuring the transition away from motel operations is managed with care for those affected. The combined site redevelopment is a key component of Anaheim’s broader initiative to rejuvenate the 1.5-mile section of Beach Boulevard through west Anaheim, a once-thriving tourist thoroughfare that now sees just half of the street's 15 motels in demand.

In response to motels that have become a source of criminal activities and nuisances, Anaheim is cracking down through strict enforcement, leveraging state and regional partnerships to address these issues, according to their website. The city has a history of taking action against problematic motel properties over the past two decades, with several demolitions paving the way for new developments, and respondents to the crime-ridden motels can see the city's comprehensive plans to rebuild Beach online at Anaheim.net/RebuildBeach.