Minneapolis nonprofit seeks state funding for new homeless shelter, affordable apartments

For decades, Minnesotans looking for a safe place to lay their head for the night at a Minneapolis church were ushered to bunk beds crammed into a dark basement.

Now Simpson Housing Services is on the final stretch of an unprecedented fundraising campaign to replace the aging, windowless emergency shelter with a modern building offering more privacy, natural light and comprehensive services to better serve people experiencing homelessness.

The nonprofit's final piece of a $45 million fundraising campaign — the largest in its 41-year history — is a request at the Legislature for $4 million to help finance the new homeless shelter and affordable housing project.

"We've never done anything remotely like this so it's kind of a big deal," said Steve Horsfield, Simpson's executive director. "We've got some real concern if that money doesn't come through. We'll find other ways to get it done, but it's going to get a lot more expensive and a lot more challenging."

This is the third consecutive session Simpson has appealed to state policymakers for support, and with DFL control of the Legislature and the state's $17.5 billion surplus, Horsfield said he's hopeful the funding will be approved this session.

The lack of state aid has already delayed construction on the project in the Whittier neighborhood in south Minneapolis. Crews are now slated to break ground this fall on the 70-bed shelter and 42-unit apartment complex, which would open by early 2025.

Simpson reduced its initial request to legislators from $10 million to $4 million after landing extra city and county funding. If legislators don't include state funding before they adjourn next month, Simpson could lose tax credits secured for the project this year.

"We've been serving the community for 40 years without state funding," Horsfield said. "We're asking the state to step up finally in a way they've never been asked to do."

Sen. Omar Fateh, DFL-Minneapolis, introduced legislation to fund Simpson's project and said he's hopeful it will be included in a broader omnibus bill.

"I feel very confident we can get that across the finish line because we have an urgent need," Fateh said.

In February, the House passed the Pathway Home Act boosting grants for homeless services and emergency shelters, but Sen. Scott Dibble, DFL-Minneapolis, who carried a separate bill in the Senate that would've included Simpson's funding request, said it failed to gain traction.

Across Minnesota, shelters have had no sustained stream of state funding each year. That needs to change, Dibble said.

"We've fallen way, way far behind in supporting people and making sure that people are living lives of dignity and security," he said. "The state needs to step up."

Simpson isn't the only nonprofit looking for state aid. In Anoka County, HOPE 4 Youth is requesting $8 million for a homeless youth drop-in center, while in north Minneapolis, Avenues for Youth is seeking $6 million for a new emergency shelter, transitional housing and administrative offices.

For Simpson, the biggest development project in its history has been years in the making. The congregation at Simpson United Methodist Church opened its doors to homeless adults in the 1980s. For years, about three dozen men jammed into bunk beds in the basement gym while women slept in a windowless former chapel room.

After the congregation disbanded in 2017 and gave the nonprofit the century-old stucco church, Simpson kicked off redevelopment plans. The church and an adjacent duplex will be demolished for the new four-story complex off 28^th Street E., which will include health and other services, a commercial kitchen and offices.

The project is unusual for Simpson, which has largely avoided developing or owning properties, focusing instead on providing services. Simpson owns a 17-unit apartment complex and operates Adult Shelter Connect, assigning about 800 adults to shelter beds across Hennepin County.

The $45 million campaign will also fund new administrative offices for Simpson. About 75% of the campaign is publicly funded, with $3 million in federal funding, $5 million from Hennepin County in federal and county funds, $4.8 million from the city of Minneapolis in federal and city funds, $1.5 million from the Met Council, $11.1 million from Minnesota Housing Finance Agency and $750,000 from Federal Home Loan Banks.

The project also secured $800,000 in tax credits and rebates, private grants and donations.

While the new shelter won't expand the number of shelter beds Simpson has had, Horsfield said the 70-bed model provides one-on-one support for residents, who usually stay an average of three months. The project will also add 42 apartments, each 420 square feet to help address a dire lack for affordable housing.

The building, which Simpson is developing with Project for Pride in Living, will give shelter residents more privacy, nixing bunk beds for individual beds in smaller 8- or 10-person rooms.

As construction on the new building nears, Simpson relocated residents in January to another closed church in Minneapolis, Zion Lutheran Church. After years of sleeping in a dark basement in the other church building, the new location finally gives residents sunlight through arched stained glass windows. Inside the sanctuary, pews were removed to make room for bunk beds.

Leaders hope more dignified surroundings lead to better results for people like a 21-year-old man who landed his first apartment this week after staying at the shelter for six months.

"There's always more demand than beds available," Horsfield said. "Everything starts with a safe place to lay your head at night."