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Two California organizations came to Asheville in late 2021, eager to purchase and convert the former Ramada Inn in East Asheville into permanent supportive housing for unhoused people. They pledged to use their “secret sauce” solution to address Asheville's longstanding challenges with how to shelter some of the city's 500 unhoused individuals.BPR's Laura Hackett and Laura Lee examined hundreds of court records and interviewed dozens of sources. The reporting revealed unpaid city permitting fees, lawsuits against the California organizations, a foreclosure on the property and more. In January 2024, Asheville Mayor Esther Manheimer said the city would not proceed with the partners, ending a two-year delay on the project but leaving lingering questions about the future of the site. Learn more in the investigative series below. Have a comment, tip or question about the series? Email news@bpr.org.

Local contractor sues Ramada Inn developer, motel conversion delay continues

The Ramada Inn project site on Dec. 19, 2023.
Laura Hackett
The Ramada Inn project site on Dec. 19, 2023.

Local contractor Beverly-Grant filed a lawsuit alleging nonpayment of nearly $400,000 by the developers behind the Ramada Inn conversion project.

One of the defendants named in the suit, Shangri-La Construction, had plans to convert the former motel into a permanent supportive housing project for the city’s most vulnerable residents including unhoused veterans. In late 2021, Asheville City Council voted to relinquish the right to purchase the property to Shangri-La and its partner organization, Step Up.

At a groundbreaking in Dec. 2022, Shangri-La CEO Andy Meyers promised the city of Asheville that the development would “go very, very quickly.” The stalled project was scheduled to provide 113 units.

Beverly-Grant provided initial demolition on the site. The complaint alleges the developers owe $392,987 for work completed from December 2022 to June 2023. Prior to the suit, Beverly-Grant filed a lien on the property for the same amount, filings showed.

In the legal filing, attorneys for Beverly-Grant alleged that in the spring 2023, the parties were negotiating for additional work, but the negotiations did not result in an additional contract. According to city permits, Beverly-Grant was taken off the project in early July 2023.

Jason Wightman, a project manager at Beverly-Grant, told BPR he was unable to comment on the project.

The lawsuit names four defendants: River Ford LP and three Shangri-La entities: Shangri-La Industries LLC, Shangri-La Development LLC and Shangri-La Construction LP. The River Ford partnership is an out-of-state entity that legally owns the property, and state records show the authorized representative of River Ford is Shangri-La CFO Cody Holmes.

Under North Carolina law, the defendants had 30 days to respond to the lawsuit. The court filing does not show any response.

After the 30 day clock runs, the plaintiff could file a request for a default judgment, asking the court to award damages. Jeffrey Stahl, an attorney for Beverly-Grant, did not reply to a request for comment.

The former motel lobby of the Ramada Inn site.
Laura Hackett
The former motel lobby of the Ramada Inn site.

In California, Shangri-La faces money troubles

The lawsuit is the latest in a string of challenges for the California developer.

Shangri-La defaulted on private loans in seven publicly-funded motel conversion projects in California, according to reporting by The Press Democrat. Three of those projects currently house previously homeless residents.

The California Department of Housing and Community Development launched an investigation into Shangri-La for “program violations” at seven of its properties.

According to the notice, Shangri-La is in violation of “numerous failures,” including “a lack of communication on status of projects, failure to meet performance milestones, and failure to record affordability covenants.”

Due to this “serious breach of contract issues,” the notice said, “the Department has determined that [Shangri-La Industries] is not meeting the Department’s requirements in demonstrating its ability to own, operate, and develop affordable housing developments.”

A pile of trash sits at the entrance of the Ramada Inn site.
Laura Hackett
A pile of trash sits at the entrance of the Ramada Inn site.

Ramada Inn conversion delayed indefinitely

The project does not have a target opening date, according to a recent public meeting focused on homelessness. Buncombe County Homelessness Program Manager Lacy Hoyle said the developers are “currently securing additional financing related to interest rate increases.”

Additional work on the former Ramada Inn cannot begin until the $60,000 permit fees are paid.

“Shangri-La has communicated that they are committed to fulfilling the permanent supportive housing project in Asheville and that they are working to secure financing to complete the renovation,” Asheville Mayor Esther Manheimer told BPR in a statement.

The project bypassed the city’s ARPA application process, and the city allocated $500,000of federal American Rescue Plan Act money for the project. The initiative is the only ARPA project listed on the city’s site as not yet “in progress.”

“There are very few providers of this much needed type of housing therefore we’re looking to leverage every opportunity to add available units,” Manheimer said in the statement. ”However, the city’s funding for this project will not be contributed until this project is complete.”

Update: This story was updated to attribute the statement to Mayor Manheimer and not her spokesperson, Jessica Hughes.

Laura Hackett joined Blue Ridge Public Radio in June 2023. Originally from Florida, she moved to Asheville more than six years ago and in that time has worked as a writer, journalist, and content creator for organizations like AVLtoday, Mountain Xpress, and the Asheville Area Chamber of Commerce. She has a degree in creative writing from Florida Southern College, and in 2023, she completed the Craig Newmark Graduate School of Journalism at CUNY's Product Immersion for Small Newsrooms program. In her free time, she loves exploring the city by bike, testing out new restaurants, and hanging out with her dog Iroh at French Broad River Park.
Laura Lee began her journalism career as a producer and booker at NPR. She returned to her native North Carolina to manage The State of Things, a live daily statewide show on WUNC. After working as a managing editor of an education journalism start-up, she became a writer and editor at a national education publication, Edutopia. She then served as the news editor at Carolina Public Press, a statewide investigative newsroom. In 2022, she worked to build collaborative coverage of elections administration and democracy in North Carolina.

Laura received her master’s in journalism from the University of Maryland and her bachelor’s degree in political science and J.D. from the University of North Carolina at Chapel Hill.
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