The City of Bend is no longer trying to buy the Rainbow Motel, but continues to pursue the Bend Value Inn and plan to convert the building into a homeless shelter.

But whether the city will receive government money to fund the purchase is now up in the air.

The city was part of a scholarship program called Turnkey project, which has awarded $ 35 million in grants to cities and others

Businesses to buy hotels and convert them into homeless shelters.

However, after the city identified significant structural problems in the first hotel to be used as a shelter, the Motel Old Mill & Suites, the city council pulled back from the agreement and placed the city behind other cities that had gone through the grant process, Carolyn Eagan, the city’s economic development director.

“We didn’t want to take any land just so the homeless could live there,” Eagan said on Thursday. “We wanted something … we could run as a top-notch website.”

Megan Loeb, the Oregon Community Foundation program director, said limited turnkey funding was available after an applicant rejected grant money because the community does not support a homeless shelter.

However, there are currently more qualified applicants than funding and it will be a competitive process.

Eagan said the city is likely no longer in line for the original $ 35 million to be spent by the end of June. The city hopes to continue evaluating the Bend Value Inn and that lawmakers will provide the project with more turnkey project money to fund the project.

Loeb said having more money for Project Turnkey is a “hopeful wish”.

“It’s not a guarantee, but we have advised members of the legislature that we have more qualified applicants and that some of them are essentially subject to due diligence,” she said.

The project won’t die unless state money is allocated to the city, Eagan said. The city may use federal funds from the U.S. rescue plan given to cities and counties in support of COVID-19, or money from the city’s general fund.

Eagan said she believes the city made the right decision by not developing the original hotel, even if it means the city is not receiving a scholarship.

The city took more time to do due diligence, which means reviewing the site for suitability so the city can be realistic about the cost of renovations.

Eagan said she wondered if other faster moving cities were likely to find structural problems similar to Bend, but shortly after the sale.

“We knew more about our property than other communities likely,” Eagan said.

On Wednesday, the Bend City Council unanimously voted to negotiate a sale price with the owners of the Bend Value Inn on Division Street. The city council also voted to end a purchase and sale agreement with the Rainbow Motel on Franklin Avenue, largely because the purchase and sale price was no more than $ 2.5 million compared to the Bend Value Inn US dollars would be more expensive. Eagan said.

However, the city continues to have an interest in the Rainbow Motel property.

“We continue to strive to improve the opportunities for temporary, transitional and workforce housing in Bend, including through public and private partnerships in the Bend Central District,” Councilor Gena Goodman-Campbell read in a motion on Wednesday.