In a split vote, the Milpitas City Council decided Wednesday to drop plans for a potential lawsuit to stop a hotel in the city from being converted into permanent supportive housing for people who are currently homeless, but the project could face more hurdles.

The council, in a special closed session meeting Wednesday morning, voted 3-2 to reverse their decision from just two weeks ago to pursue litigation to stop Santa Clara County’s plans to convert a 146-room Extended Stay America hotel into 132 studio apartments with supportive services on site.

The county was awarded $29.2 million in September for the project from Gov. Gavin Newsom’s Project Homekey initiative, which aims to quickly house thousands of homeless people permanently around California.

The Milpitas project would also use $21.9 million from county affordable housing funds, and a nonprofit developer on the project, Jamboree Housing, would take on a roughly $30 million loan for the balance.

Mayor Rich Tran, who initiated the push to sue over the project, voted against dropping the litigation effort Wednesday, as did Councilwoman Carmen Montano.

Vice Mayor Bob Nuñez, Councilwoman Karina Dominguez, and Councilman Anthony Phan all voted to stop any litigation, according to City Attorney Chris Diaz, who announced the action during a public portion of Wednesday’s meeting.

“I’m very disappointed like many residents across Milpitas,” Tran said Thursday in an interview. He was hoping the council would have voted to select a law firm to move forward with legal action during the meeting.

The council majority also voted to issue a letter to the county about the decision and the city’s desire to “restore our relationship” with the county.

The council voted unanimously in favor of pursuing litigation on Oct. 22, even though city staff supported the project, and Vice Mayor Bob Nuñez praised it publicly for months.

Despite the prior vote to sue, three members changed course again Wednesday to let the project proceed, which Tran said was upsetting to him.

Nuñez appears to have lost his council seat in the recent election to Evelyn Chua, though votes are still being counted, and Phan appears to have retained his seat.

Phan, for his part, said Thursday he is not proud of his initial vote to sue, and said he only intended for the city to have more of a voice in the project process, which is allowed to skip over local planning rules because of new state legislation signed in June by Newsom, AB 83.

Phan, like others, was concerned that the project wouldn’t guarantee spots for those who are homeless in Milpitas and suggested that there was inadequate communication to residents about the process.

“I did vote the way I did and I regret it deeply, but I wanted to do everything I could to make it right. And I am very hopeful about the future of this project and what it seeks to accomplish,” Phan said Thursday.

After the council voted to sue, Newsom, during a press conference in San Jose announcing more Homekey funding, sent a message to the Milpitas City Council, saying they would regret not voting to support the project.

“You have an incredible moment in time. It’s a moral damn moment. Do the right thing,” Newsom said at the time.

The Law Foundation of Silicon Valley also issued a stern letter to the council on Oct. 27 that said if the city pursued legal action to stop the project, it would violate fair housing and anti-discrimination laws. The foundation also said it would “consider intervening on behalf of the unhoused community” if the city sued.

“It is clear that this decision is based on exaggerated, prejudiced, and unfounded claims that the individuals moving into this housing will disproportionately be those with mental health disabilities and/or substance abuse disorders, and that the presence of such individuals will bring violence, crime, and pollution to Milpitas,” the letter said.

Mayor Tran, Councilwoman Montano, and many residents expressed concerns about safety if the project were to go forward. Tran has expressed concern that police may be needed to frequently respond to the hotel, asked housing officials if “psychotic” people would be allowed to stay there, and noted he was concerned about the BevMo across the street.

“I’m not happy about the way that we attempted to block this project,” Phan said Thursday, who noted that Newsom’s comments weighed heavily on him. “It was a shameful moment for Milpitas, and I think we’re better than that. It was not a moment that Milpitas should be proud of.”

But even if the city is getting out of the project’s way, some residents opposed to it haven’t changed their minds.

Suraj Viswanathan, a council candidate who didn’t win a seat, started a petition to stop the project last month, and said residents were concerned they’d be harmed by the people living there, and were upset their voices weren’t heard in the decision making process for this project.

Viswanathan said Thursday a group of residents has pulled together about $34,000 to hire the Downey Brand law firm of San Francisco, and they plan to file a lawsuit against the project and a temporary restraining order to block it from proceeding indefinitely.

Tran said though he has to respect the council majority decision, he is still opposed to the project and hopes “somebody, anybody on this planet” will stop the project from happening.


By Richard Moran

Richard Moran loves to write about sports with the Golden State Online. Before that, he worked as a senior writer at ESPN. Richard grew up in San Diego and graduated from the University of San Diego in 2004, after which he worked as an editor for five years.

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