Peoria council approves $39,000 grant to continue Lula motel shelter; city, United Way and state funds discussed

The Peoria City Council on March 11 approved a reimbursement grant not to exceed $39,000 to Lula Peoria to continue its motel project that houses unsheltered residents while the city and its partners pursue longer-term funding and housing placements.

Director Joe Doolin of Community Development told the council the city previously allocated about $80,000 for the initial phase and that Lula has been using private funds since those dollars ran out. Doolin said the city budget for homelessness includes roughly $790,000 for 2025; about $190,000 of that has been spent (the initial $80,000 for Lula plus $110,000 to the Dream Center), leaving about $600,000 available.

Doolin said the state of Illinois provided a $1,000,000 grant to the Home for All Continuum of Care through the United Way; some of that money is intended to fund motel-style projects but cannot be charged to the grant until a formal budget amendment and grant agreement take effect in early April. Doolin said because the state funds will not be reimbursable retroactively, the city can use its remaining 2025 homelessness allocation to bridge the gap through June 30.

Doolin described operational rules the city would include in any agreement with Lula: cap admissions at the current number, require residents to engage with social-service providers, prohibit reentry after a resident exits to shelter or housing, and set a code of conduct for participants. He said the project has been volunteer-driven and that costs submitted to the city are limited to motel room, food and supplies with receipts provided for reimbursement.

Doolin gave participant counts and outcomes: 59 residents currently at the motel (peak about 90); six residents moved to permanent supportive housing; four to treatment facilities; four to a “bridal” project referenced by staff; 11 moved from the motel to shelter; 16 residents have identified housing and are awaiting lease signing; and 18 have completed paperwork and submitted housing applications.

Council members and advocates praised Lula’s work. Councilman Tim Riggenbach said the motel project had sheltered roughly 80 people for up to six months with relatively modest city spending, and he moved approval. Councilman Gordon Young seconded. Multiple council members and speakers from Lula described the project as a bridge to permanent housing and emphasized the need for longer-term solutions such as tiny homes, accessory dwelling units, tax-credit developments and expanded shelter capacity.

Keshi Bernard and a speaker identified as Casey, representing Lula Peoria, addressed the council during public comment and described the program as volunteer-driven and donation-funded; Bernard said residents at the motel were “safe” after the council vote and asked the public to continue meal and supply donations through Lula Peoria’s Facebook page.

The motion to approve reimbursement to Lula Peoria not to exceed $39,000 was moved by Councilman Tim Riggenbach, seconded by Councilman Gordon Young, and approved unanimously.

Council and staff said the city will continue to pursue state and philanthropic funding and to explore longer-term housing options such as tiny-home models and tax-credit projects. Doolin and other staff described other parallel efforts, including Salvation Army campus expansion, Phoenix Community Development Services’ Methodist College conversion and a flexible rent program that helped about 25 households in recent months.

Votes at the March 11 meeting show council support for using city funds as a bridge while state and United Way processes are completed and while providers continue to move motel residents into permanent housing.