Sale of site formerly proposed as H.B. homeless shelter results in $79,000 loss for city

The city of Huntington Beach will take a nearly $80,000 loss on a Pipeline Lane property previously bought as the site for a possible homeless shelter.

In a unanimous vote Monday night, the City Council authorized the sale of 15311 Pipeline Lane for $2.744 million to Steve Chalabian and Jackie Jernigan.

The council voted in April to purchase the 11,200-square-foot structure in a light industrial area near Springdale Street and McFadden Avenue, but nearby residents and other property owners and businesses sued the city, saying the property could only be used for industrial purposes. The city scrapped the plan and continued its search for a shelter site.

The city’s all-in acquisition cost for the Pipeline property was $2.75 million, City Manager Oliver Chi said.

Though the city has netted $12,000 in rent from one tenant, its net loss on the sale of the property comes to just over $79,000 after escrow fees and a real estate broker commission to Lee & Associates.

“Considering all efforts that have gone into this, it is not a great result,” Chi said. He added that “based on everything that has happened,” the sale is the “best step.”

The council authorized city staff to seek an extended escrow period of 45 days so the tenant has adequate time to vacate.

During a closed session Monday, Chi joined the council to discuss the possible purchase of a portion of a Costa Mesa property that is slated as that city’s long-term homeless shelter at 3175 Airway Ave.

On Tuesday, the Newport Beach City Council also will hold a closed session about the Airway Avenue property, along with Costa Mesa’s current temporary shelter at Lighthouse Church of the Nazarene at 1885 Anaheim Ave. Newport also has had trouble finding a site for a homeless shelter.

Huntington Beach’s property search is expanding beyond city limits after officials said earlier this month that they might explore regional options for a shelter.

“We should be looking at our overall response to the homeless situation in a much more regional way,” Chi said in an interview Friday.

Huntington Beach’s pivot to considering a multi-city option comes after multiple other proposed sites have fallen through.

Earlier this month, the city halted action toward putting a 35- to 60-bed homeless shelter at the former site of Al’s Woodcraft at 17881 Beach Blvd.

In April, it dropped a plan to create a 50-bed shelter at 5770 Research Drive, just behind Marina High School, amid community pushback.

Chi and the council also talked in closed session Monday about a property at 18431 Beach Blvd. in Huntington Beach. The city was approached about a project at the site that might address a long-term homelessness solution, Chi said.

Daily Pilot staff writer Hillary Davis contributed to this report.

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