REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
PHIL SKEI, Assistant Director
Planning and Development Department
BRIAN BARR, Director
General Services Department
BY: CRYSTAL SILVA, Senior Management Analyst
Homeless Services Division
SUBJECT
Title
Actions pertaining to a Lease Agreement between the City of Fresno and Elevate Community Services, Inc. (District 3):
1. Adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 of the California Environmental Quality Act (CEQA) Guidelines
2. Approve a Lease Agreement between the City of Fresno and Elevate Community Services, Inc., a California non-profit corporation, for $0 to lease the Ambassador Inn located at 1804 W Olive Avenue (APN 449-231-11) for a one-year term commencing July 1, 2026, through June 30, 2027
Body
RECOMMENDATION
Staff recommends Council to 1) adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 of the California Environmental Quality Act (CEQA) Guidelines and 2) approve a Lease Agreement between the City of Fresno and Elevate Community Services, Inc., a California non-profit corporation, for $0 to lease the Ambassador Inn located at 1804 W Olive Avenue (APN 449-231-11) for a one-year term commencing July 1, 2026, through June 30, 2027
EXECUTIVE SUMMARY
On March 13, 2025, Council approved a Service Agreement with Elevate Community Services, Inc. (Elevate) to operate the Ambassador Inn as a 53-bed emergency shelter and triage center. The City and Elevate now desire to transition the Service Agreement to a Lease Agreement without any change to the use of the property as an emergency shelter and triage center for the period of July 1, 2026, through June 30, 2027. The Lease Agreement is necessary for Elevate to demonstrate control of the property and secure funding through the County of Fresno Department of Behavior Health for shelter operations.
As part of this transition, Behavioral Health Bridge Housing (BHBH) funding from the County of Fresno is expected to be incorporated to expand the shelter’s ability to serve a higher-need population but is not being provided to cover the cost of a lease. BHBH resources are specifically designed to support individuals experiencing homelessness who present with significant behavioral health needs. Integrating this funding represents a strategic enhancement to the shelter’s service model, enabling the City, in partnership with the County of Fresno Department of Behavioral Health, to deliver more comprehensive, clinically informed, and person-centered care. This expanded support structure is expected to improve engagement with individuals who have complex clinical profiles and strengthen both housing and health outcomes.
This action ensures the continued operation of the Ambassador Inn as a low-barrier emergency shelter, delivering critical housing-focused services to individuals experiencing homelessness within District 3. Maintaining these services supports the City’s broader strategy to expand shelter capacity, enhance service delivery, and create sustainable pathways to permanent housing for Fresno’s most vulnerable residents. The new funding implementation will not displace any current clients.
Elevate shall continue to comply with all applicable federal, state, and local laws and regulations governing emergency shelter operations, including but not limited to nondiscrimination, fair housing, and insurance requirements.
BACKGROUND
The City of Fresno’s approach to addressing homelessness has evolved in response to both local needs and state and federal policy initiatives. The Ambassador Inn, located at 1804 W Olive Avenue, was acquired by the City in 2022 as part of a broader strategy to expand low-barrier emergency shelter capacity and provide pathways to permanent housing for individuals experiencing homelessness. The acquisition and subsequent rehabilitation of the property were funded through a combination of local and state resources, including the State of California’s Project Homekey program, which aims to rapidly expand housing options for vulnerable populations by converting existing properties into interim or permanent supportive housing.
Following acquisition, the City entered into a Repair Services Agreement with RH Community Builders LP to renovate the Ambassador Inn, ensuring compliance with accessibility, building, and safety requirements. The repairs were completed under a cost-plus fixed fee arrangement, with the City maintaining oversight of project milestones, regulatory compliance, and fiscal accountability. The project was subject to City Council approval and legal review, with the City Attorney’s Office approving the agreement as to form.
To operate the Ambassador Inn as a triage center and emergency shelter, Council approved a Service Agreement with Elevate on March 13, 2025. Elevate’s selection followed a competitive procurement process, during which proposals were evaluated based on cost, operational capacity, experience, and alignment with the City’s service requirements. Elevate was determined to be uniquely qualified to provide the necessary services, having successfully managed similar facilities under prior agreements with the City. Under the proposed agreement, the Service Agreement will terminate on July 1, 2026, and formally transition services to a Lease Agreement for an emergency shelter and triage center.
As part of this transition, Behavioral Health Bridge Housing (BHBH) funding from the County of Fresno is expected to be incorporated to expand the shelter’s ability to serve a higher-need population but is not being provided to cover the cost of a lease. BHBH resources are specifically designed to support individuals experiencing homelessness who present with significant behavioral health needs. Integrating this funding represents a strategic enhancement to the shelter’s service model, enabling the City, in partnership with the County of Fresno Department of Behavioral Health, to deliver more comprehensive, clinically informed, and person-centered care. This expanded support structure is expected to improve engagement with individuals who have complex clinical profiles and strengthen both housing and health outcomes.
Under the Lease Agreement, Elevate shall continue to comply with all applicable federal, state, and local laws and regulations governing emergency shelter operations, including but not limited to nondiscrimination, fair housing, and insurance requirements.
The City’s ongoing partnership with Elevate Community Services at the Ambassador Inn is part of a coordinated system of care that includes collaboration with the Fresno Madera Continuum of Care (FMCoC), other shelter providers, and public and private partners. The program design emphasizes a housing-first, low-barrier approach, with a focus on rapid connection to permanent housing, intensive case management, and integration with the Coordinated Entry System (CES).
Under Elevate Community Services, the operational framework will emphasize cross-sector collaboration and leverage existing relationships with behavioral health providers and community-based organizations. This approach will reduce barriers to care and ensure seamless access to mental health and substance use services, including on-site behavioral health navigation, crisis intervention, and linkages to ongoing treatment. These enhancements align with trauma-informed best practices and are critical for stabilizing individuals with acute needs while reducing returns to homelessness.
Additionally, the proposed lease agreement and the new funding implementation will not displace any current clients. The program aims for ongoing program evaluation and continuous quality improvement. Guest feedback, outcome data, and performance metrics will guide service adjustments to ensure that the shelter remains responsive to emerging needs and aligned with local and state policy objectives related to homelessness and behavioral health integration. Elevate Community Services’ experience in shelter operations, combined with its established partnerships and operational expertise, positions the Ambassador Inn to serve as a model for coordinated, data-driven, and equity-focused emergency shelter services in the region.
This action reaffirms the City’s commitment to providing safe, accessible shelter options while strengthening its mission through enhanced behavioral health integration and collaborative partnerships that better serve residents with the highest needs.
This lease agreement for the one-year term is the result of a multi-year process of property acquisition, capital investment, and program development, all aimed at sustaining and enhancing the City’s emergency shelter infrastructure. The action aligns with the City’s adopted policies and funding commitments to address homelessness and supports compliance with state and federal mandates for shelter operations, data reporting, and equitable service delivery.
The Lease Agreement can be terminated by either party with 30-days prior written notice.
The City Attorney has approved the lease agreement as to form.
ENVIRONMENTAL FINDINGS
Staff performed a preliminary environmental assessment of this Project and determined that it falls within the Categorical Exemption set forth in CEQA Guidelines Section 15301/Class 1. The Project continues the existing use without expansion beyond the existing facility and does not propose any new construction.
Furthermore, staff has determined that none of the exceptions to Categorical Exemptions set forth in CEQA Guidelines, Section 15300.2 apply to this Project.
LOCAL PREFERENCE
Local preference is not applicable to the lease of real property.
FISCAL IMPACT
This agreement will have no general fund impact as this is a no-cost lease agreement and also does not obligate the general fund.
Attachments:
Categorical Exemption
Ambassador Inn Lease Agreement
Levine Act Disclosure Form