Gridley’s historic downtown Hazel Hotel has been losing money year after year, but the Northern California nonprofit that owns it remains dedicated to keeping commercial units filled and providing low-income housing for senior citizens. Photo by Susan Meeker 

GRIDELY, CA (MPG) - The Gridley City Council on Aug. 18 approved a loan deferral request from the Community Housing Improvement Program, the Northern California nonprofit that operates the historic downtown Hazel Hotel that has been bleeding money year over year. 

The decision followed a detailed presentation by Community Housing Improvement Program President Seanal O'Shaughnessy outlining the financial challenges associated with operating the historic property, a mixed-use commercial and affordable housing development serving low-income seniors.

“When we projected the income for the property 25 years ago, there was a large reliance on growth of the commercial units at the bottom of the first floor of the property,” O’Shaugnessy said. 

The historic structure in the heart of Gridley's original downtown also consists of 13 apartments on the upper floor for low-income seniors, with rent under $500.

Community Housing Improvement Program acquired the Hazel Hotel in 2000 and has since invested $438,572 in capital repairs and operating expenses. Despite full occupancy in both commercial units and housing, O’Shaughnessy said the property’s revenue has not kept up with costs, resulting in year-over-year losses.

Despite the challenges of operating in the black, O’Shaughnessy said Community Housing Improvement Program remains committed to the property and requested the Gridley City Council to defer payment on an Economic Development Block Grant (EDBG) loan to allow time to explore options for long-term sustainability, including scattered site expansion, loan restructuring, and permanent rental subsidies through HUD.

“We’re hoping within the five years to have a longer-term plan,” she said. 

The Economic Development Block Grant loan with the city has a balance of $192, 000, with an annual debt service of $11,447.

Council members expressed appreciation for Community Housing Improvement Program’s dedication to affordable housing in Gridley and the services provided to its senior tenants. 

“Some of these senior citizens have very limited incomes,” said Councilman Calderon, who motioned to provide Community Housing Improvement Program financial relief. “They wouldn’t be able to afford any apartments or houses anywhere.” 

In response, the council approved the deferral of prior year payments and authorized continued deferral until September 2030. Payments will be amortized thereafter with maturity in 2060. 

“If the five years come and we haven't been able to do a comprehensive restructure, it's our intention to just start paying the loan again,” O’Shaugnessy said. 

Community Housing Improvement Program also has a Community Development Block Grant Loan from the City of Gridley, with a combined balance of principal and interest of $370,795.