City of Lincoln, WPUSD, and The Gathering Inn fight it out in court

Editor's note: This story was updated at 6:00 p.m. Friday, June 26, 2025. The City of Lincoln and Western Placer Unified School District await a court decision in their lawsuit against The Gathering Inn (TGI), alleging the nonprofit fraudulently secured $6.4 million dollars in state funds to open a medical respite center for unsheltered individuals near four schools, without notifying the city until after the land was purchased. TGI, a nonprofit that provides shelter and accommodations for those experiencing homelessness in Placer County and Elk Grove, purchased land in Lincoln using grant funding from the Community Care Expansion (CCE) program from the California Department of Social Services. The $6,440,670 grant was awarded to TGI in May 2023. In August 2024, the city of Lincoln stated in a press release it was never notified of the nonprofit coming into town until the close of escrow. The community reacted with protests at the proposed sites, which led the city of Lincoln and WPUSD to take legal action against the nonprofit in September 2024. The lawsuit alleged TGI attained the grant through a fraudulent application. It claimed the application was originally for a 20-bed medical respite center in Roseville, approximately 800 feet from an elementary school. Roseville's City Council did not provide a letter of support, according to the lawsuit. TGI's application for the CCE program at the Roseville site was denied. "Plaintiff is informed and believes, and based thereon alleges that following TGI's unsuccessful application to open a medical respite center in Roseville, TGI was informed by CDSS and/or Horne that it was at risk of losing any chance for CCE Program funding, which was being distributed to successful applicants on a 'first-come, first serve' basis," the lawsuit stated. According to the complaint, the new application stated TGI would secure the current Lincoln location at 1660 Third Street for a 60-bed medical respite. While the application stated 60, the CCE program website identifies the project as 105-bed facility, making it the third largest medical respite facility in the state, behind two larger ones located in Los Angeles and San Francisco. The City of Lincoln and WPUSD claimed the grant was awarded without community engagement, a requirement for the application. "Plaintiff is informed and believes, and based thereon alleges that TGI attached the same letters of support it had received from the project at the Roseville Site, and it passed those letters off to CDSS and/or Horne as 'community support' for the Lincoln Site. There do not appear to be any letters of support for TGI's proposed medical respite facility in the City of Lincoln that were included with TGI's application, nor does there appear to be any statement of support from either the County of Placer, or anyone at the City of Lincoln," the lawsuit said. TGI claimed in a press release they had shown actual and satisfactory community engagement. The City of Lincoln argued they do not have the emergency services to support a medical center of this size. "The City does not have police, fire, and emergency medical resources that would be needed to absorb what would undoubtedly be an increase in calls for services at the Lincoln Site," the complaint stated. "In short, this is not a case of the City just not wanting any CCE Program facility in its jurisdiction. The problem here is the proposed project is far too large, and it is simply not needed to assist a relatively small homeless population in the City or Placer County." WPUSD claimed the shelter would cause safety risks due to the shelters proximity schools, including Glen Edwards Middle School and First Street Elementary across the street. "Immediate and significant District student safety risks due to the Shelter's proximity to four schools serving nearly 3,000 students, particularly GEMS and FSS, which are within 1,053 feet of the Shelter," it claimed. The school district claims the medical respite center will create costly and immediate increases in security, personnel, and surveillance systems, borne by the District, to prevent unauthorized access to school grounds. The writ of mandate claimed people have already come to the Glen Edwards Middle School office across the street from the medical respite center looking for TGI. It also claims there is a heightened danger to school district students traveling to and from school during routes that pass near the shelter. "Increased risk of young District students encountering unsafe conditions such as discarded drug paraphernalia or witnessing inappropriate adult behaviors," WPUSD alleged. "Psychological impact on District students, potentially causing anxiety, stress, and fear, which could negatively affect their educational experience and overall well-being." TGI submitted a demurrer, a pleading in a lawsuit to challenge the legal sufficiency of a complaint. It is a legal action that states: this lawsuit shouldn't move forward because the legal claim doesn't work, even if the facts were to be true. It doesn't argue facts but argues if the legal claim itself is even valid. TGI demurred the unfair business practice claim stating "defendant contends the City of Lincoln cannot prosecute an Unfair Business Practices claim. Business and Professions Code section 17204 provides three categories of city officials who can prosecute such a claim: (1) a city attorney of a city with a population of more than 750,000," according to the civil minutes from June 16. TGI demurred against the Declaratory Relief claim. "Defendant contends plaintiff's allegations are as to defendant's past acts, which cannot constitute an "actual controversy" for a declaratory relief claim," said the document. The nonprofit demurred against deceit/concealment. The document stated that "defendant contends the fifth cause of action for fraud fails because defendant owes no duty to disclose to plaintiff," the document stated. TGI also demurred against a secondary deceit and concealment that is against another party outside of them. "Defendant contends the sixth cause of action for recovery of attorneys' fees under the tort of another doctrine fails because plaintiff's claim is not based on the tort of The Gathering Inn against the City-rather, the City claims damages based on fraud by concealment against another party," said the minutes. The city of Lincoln alleged that the Department of Social Services (DSS) should have not approved TGI's application and should not have awarded any CCE Program Funds for the Lincoln site due to the application not meeting all the requirements. The DDS claims they do not have a duty to do so. "Defendant contends it does not have any duty to rescind its acceptance of The Gathering Inn's application, much less a ministerial one," the minutes stated. The demurrers are currently under submission with a tentative ruling to sustain them with leave to amend. Once a final ruling comes out, if the judge adopts her tentative ruling, then the city of Lincoln and WPUSD could have an opportunity to file an amended pleading under a 10-day timeframe. TGI posted a status on Facebook four days after Lincoln residents protested at the courthouse. The status claimed that the community reaction to TGI coming to Lincoln has escalated to hostility and threats of violence, but didn't go into detail on specifics. "The Gathering Inn understands that its efforts to support individuals experiencing homelessness in Placer County have stirred strong community responses—including, from some in Lincoln, opposition that has at times escalated to hostility and threats of violence," it said. At the courthouse, Lincoln residents wearing "LINCOLN STRONG STOP TGI" red shirts yelled at the TGI CEO Keith Diederich. "There is a place in hell for Keith," one person shouted. "If anything happens to our kids, it's going to be on your hands," another said. "I wish I hated kids like you, maybe I could sleep better at night." The Facebook status requested that community leaders in Lincoln should publicly denounce this type of behavior. It also requested the leaders of Lincoln to meet with TGI to collaborate on the medical respite center outside of court. "As we have stated from the outset, The Gathering Inn remains fully prepared to meet with representatives of the City of Lincoln and the School District to collaborate on a path forward for opening and operating this much-needed facility," the status said. "We urge local leaders to recognize that pursuing costly, meritless litigation, based on unfounded allegations of fraud, public nuisance, and abuse of discretion, only diverts limited public resources. Litigation is not the answer. Dialogue is." A representative from TGI came to share the same message at a city council meeting. Mayor Holly Andreatta responded saying she is unaware of threats of violence from the community. "Darlene, the only comment I'm going to make about that is I'm not aware of any threats of violence against anyone from from the city, from residents, from the council. I think that is a propaganda lie," she stated. "So unless you can produce some kind of real evidence, I don't want to hear that again. But I appreciate the rest of your comments." Darlene Cullivan, TGI's Chief Philanthropy, Marketing and Communications officer, told the Lincoln News Messenger the threats come from a private Facebook group titled "LINCOLN AGAINST TGI." "Guess Keith D Didn't feel safe because we yelled at him out side the courthouse! So Hostile!!! Frankly it was disgusting to see his face in that courtroom and then all our city leaders showing up to defend our city. How dare him," the post written by a Lincoln resident stated. "Look who's worried about safety and being respectful now! This post is a joke!!! TGI you did Lincoln dirty and you thought we would back down!!! Wait until all the homeless you bring to Lincoln end up in your neighborhood when your program fails!! We know where every single one of you live!!!" The next event in the lawsuit is a case management conference on July 28 at 2:00 p.m. in department 40 at the Placer County Superior Court of Roseville.