California sues homeless housing developer for $114M over default on Homekey program

California’s state housing department is suing a Los Angeles developer that last year defaulted on private loans it took out on seven state-funded motel conversions, putting the homeless housing projects at risk of “imminent foreclosure.”

The suit — filed Tuesday last week in Los Angeles County Superior Court by Attorney General Rob Bonta on behalf of the California Department of Housing and Community Development — seeks to claw back $114 million in state grants that Shangri-La Industries received during the pandemic from the department’s celebrated Homekey program.