North OC Times

ANAHEIM, Calif. (May 21, 2024) — Anaheim is seeking to purchase another Beach Boulevard motel to pave the way for affordable housing and other homes as part of the city’s ongoing efforts to revitalize the street running through west Anaheim.

On Tuesday, Anaheim’s City Council, acting as the Anaheim Housing Authority, approved using the city’s right to acquire private property for public use in buying the Rainbow Inn, a 42-room motel near Beach and Ball Road. If necessary, this approval would allow the city to use eminent domain if ongoing negotiations with the owners do not result in a sale.

Several prior offers from the city for the motel have been rejected. In December, Anaheim offered $6.9 million to purchase the property from Dhanuba Hospitality Inc., a family holding company. The city continues discussions with Rainbow Inn on a sale, with eminent domain considered a last resort.

The Rainbow Inn site at 831 S. Beach Blvd. is needed to create a combined 2.7-acre site that would house 120 apartments at affordable rents based on income and 15 townhomes for sale at market prices, with some townhomes potentially available to first-time buyers.

Anaheim already owns two former motel sites adjacent to Rainbow Inn. In late 2022, Anaheim acquired the Covered Wagon Motel on the north side of Rainbow Inn and Anaheim Lodge on its south side. The Covered Wagon was closed in March 2022 due to health and safety violations and inhumane living conditions; it was purchased for $6.6 million in December 2022. That same month, Anaheim acquired the 45-room Anaheim Lodge for $7.6 million.

Both acquisitions reflected market prices for motels at that time when California’s $1.4 billion Homekey program drove motel sales across the state.

Without acquiring Rainbow Inn, Anaheim would have to develop fewer affordable homes on two smaller detached sites at a higher cost than developing across three combined sites.

Upon acquisition, operations at Rainbow Inn would wind down with relocation assistance provided to any long-term residents.

The proposed redevelopment of these combined motel sites is part of Anaheim’s broader initiative to rebuild Beach Boulevard, which runs 1.5 miles through west Anaheim. Once a thriving route with motels and businesses leading to the coast, Beach Boulevard has seen many lodgings outlive their usefulness.

Of the remaining 15 motels along Beach Boulevard, there is travel demand for only about half of them.

“Anaheim welcomes well-run, lawful motels as part of our efforts to rebuild Beach,” stated an official source from Anaheim's administration.

For motels harboring criminal activity or creating nuisances, strict enforcement measures are being taken by working with state and regional partners.

Since 2002, Anaheim has acquired and demolished four Beach motels:

- In 2002: Silver Moon Motel south of Beach and Lincoln.

- In 2021: Americana Motel south of Beach and Lincoln.

- In 2023: Covered Wagon Motel.

- In 2024: Anaheim Lodge.

Additionally, Lyndy’s Motel at Beach and Ball was acquired by a private developer in 2017 and converted into a car wash.

Anaheim’s multiyear efforts to rebuild Beach include bringing new homes and businesses while improving existing ones, undergrounding utility lines and upgrading streetlights, taking over roadway management from Caltrans, daily homeless outreach programs, and strict police enforcement against prostitution, drugs, and other crimes.

Further details can be found at Anaheim.net/RebuildBeach.

___