Catholic Charities announces new $65M housing project in downtown Minneapolis

A new $65 million development in Minneapolis will help more people who are chronically homeless, including veterans and those in medical respite — a vulnerable population few facilities specifically serve in Minnesota.

On Monday, Catholic Charities of St. Paul and Minneapolis announced it's buying Augustana Health Care Center near downtown Minneapolis, repurposing and renovating the building. By 2021, the nonprofit will reopen it, relocating residents and services there from its Exodus Residence, a smaller building it will no longer lease from St. Olaf Church about a mile away downtown.

The new building will more than double the number of rooms for homeless residents and provide permanent housing at a time when Minnesota's homeless population has reached a record high number.

"This was a critical effort needed for the community to preserve these units," said Tim Marx, the CEO of Catholic Charities. "We just need more housing. … There is more demand than there is supply."

About 80% of the project is publicly funded, with Hennepin County dedicating an "unprecedented" $5 million — the county's biggest investment ever in one housing project. The County Board is expected to give final approval on the spending Dec. 12.

"It hits the bull's-eye for what we feel like is most needed in Hennepin County," Commissioner Mike Opat said. "It's unique, it's bold, it fits what exactly the need … [is for] the vulnerable populations that we've identified."

On Monday, St. Olaf Church bells rang outside as Tory, a 44-year-old from Minneapolis, got the key to his own room next door at Exodus Residence. He said he's been homeless since 2016 and has waited months for a room to open up, sleeping at Catholic Charities' Higher Ground shelter in Minneapolis.

"I'm really happy. This is bigger than I thought," said Tory, who declined to give his last name to protect his privacy. "There's a big weight off my shoulders."

In 2017, St. Olaf Church notified Catholic Charities it was ending the 25-year lease of its adjacent eight-story building in 2021. The church is working with nonprofit developer Aeon to rehab and expand onto the building to open nearly 200 affordable apartments.

Catholic Charities, which finished work in October on its $100 million Dorothy Day campus in St. Paul, will buy Augustana Health Care Center's 190,000-square-foot building — the 13th building Catholic Charities will own in the Twin Cities. Since it's already zoned and permitted for housing, the nonprofit will start renovating and repurposing the building next summer.

Cassia, formerly Augustana Care and Elim Care, runs the center and will continue to own and operate the neighboring Augustana Apartments. Dave Saemrow, a Cassia spokesman, said that Augustana, like many nursing homes, was operating below capacity as older adults choose more homelike settings or assisted living. The nursing home, part of the Elliot Park neighborhood for 73 years, has downsized over the years, he said. Of its 250 beds, 170 are now occupied.

The nursing home will close Feb. 2, laying off 361 employees. Saemrow said Cassia is working to find new homes for residents and jobs for employees with the company or elsewhere.

"This is a trying time … we are now working to help ensure this transition is a smooth one," he said in a prepared statement.

When Catholic Charities moves into the building, which the nonprofit is dubbing "Exodus 2.0," the larger building will have more office space, a Health Care for the Homeless clinic operated by the county and permanent housing and medical respite beds for 203 men and women who are chronically homeless, homeless veterans or those who are recovering from an illness or injury. The current 47,000-square-foot Exodus Residence has medical respite beds and transitional housing for 95 people for up to two years. Most people stay six months on average, but the waitlist to get in could take up to six months.

Besides the county, the $65 million project is backed by $3.3 million from the city, $23.6 million from the state, $20 million in tax credits and $12.5 million from Catholic Charities, including $3.5 million from the Richard M. Schulze Family Foundation.

Of the county's dollars, $2 million is from a new pool of funding set aside starting this year to back supportive affordable-housing projects without going through the bidding process, said Julia Welle Ayres, the county's manager of housing development and finance. The County Board will vote Tuesday to move $3 million in county funding to the Housing and Redevelopment Authority, which is made up of commissioners, to fund the rest of its contribution to "Exodus 2.0."

"We never see this kind of thing in this industry," Welle Ayres said of the project's large number of beds for residents with complex medical conditions.

It's part of a broader investment by the state's largest county of "prioritizing the poorest of the poor," Opat said, putting more money toward shelter beds and housing to respond to the growing need. On Dec. 12, the County Board is expected to sign off on a $1.1 million plan to add more shelter beds for couples, case management staff at shelters and a new women-only shelter. Earlier this year, the County Board also approved a 10-year, $50 million plan to add 1,000 supportive housing units.

When Tory moved Monday into his room at Exodus Residence, he scouted where to put a mini plastic Christmas tree, thrilled to finally have his own space after sleeping at a shelter for eight months.

He said he lost his job and home three years ago after a mental health breakdown, resorting to pitching a tent throughout the city for years. Now, he said he works delivering newspapers and is saving up money as he's on yet another waiting list for an affordable housing unit.

Until then, he has his own place at Exodus, three meals a day and a case worker to connect him to other services. He said he also sees a therapist, goes to group therapy and is on medication, helping him stay mentally healthy and sober.

"I'm going to sleep good tonight," he said. "I'm going to make this home."

Kelly Smith • 612-673-4141