Olmsted County regrouping after failed grant bid for homeless shelter

ROCHESTER – It took less than three months to crush this community's hopes for a new homeless shelter largely to be paid for with state funds.

Olmsted County officials in September crowed about their plans to renovate a longtime low-income apartment building into an 80-bed overnight shelter. They hoped to use $10 million in one-time grant money related to homelessness the Minnesota Legislature had passed earlier this year.

Yet the Minnesota Department of Human Services (DHS) denied Olmsted County's grant application at the end of November, leaving local housing officials scrambling to figure out next steps to address increasing homelessness in the area.

"There's short, medium and long-term needs that we need to be addressing in our community," said Dave Dunn, Olmsted County's housing director. "If it takes a few years to get there, what are going to have to do to bridge that gap?"

Olmsted County typically estimates about 200 unhoused adults and 400 unhoused children live in the area, though homeless counts have increased in recent months.

The nonprofit-run Rochester Community Warming Center is the only overnight shelter in town. It routinely fills up this time of year — staff say more than 100 people were turned away in November.

County officials have worked with local nonprofits for more than a year on plans for a new homeless shelter in the area as only the nonprofit-run Rochester Community Warming Center typically houses people overnight. The county is also looking to replace its own housing offices, called ECHO (Empowering Connections and Housing Outreach) within the next few years as the building used ages into disrepair.

Rochester housing officials thought they found the solution in the Residences of Old Town Hall building, just five blocks east of downtown. Built in the 1960s, it served as a low-income apartment building and dorm units for Luther College.

Last fall the county negotiated a purchase agreement with owner and financial broker Jeff Allman to buy the building for $5 million.

The idea was to create a new Housing Stability Center with overnight beds for homeless residents administered by Catholic Charities of Southern Minnesota, which currently runs the Warming Center. The new center also would have included renovated office space for county housing officials.

The project would have cost about $12.7 million, with $10 million coming from a new homeless shelter funding pool from the state.

Yet other communities had similar ideas. State officials told Olmsted County last month there were 97 applications totaling $367 million in requests. There was only $100 million available; Olmsted County didn't make the cut.

"The need far exceeded the supply," Dunn said.

The county's purchase agreement with Allman runs until mid-March, and Dunn said the Olmsted County Board will review the issue in January to decide whether to move ahead with the property.

In the meantime, other organizations are stepping up to help. The local Salvation Army is taking on overflow from the Warming Center this winter, sheltering up to 20 more people nightly.

Steve Friederich, the Rochester Salvation Army's program manager, said the Salvation Army didn't need to use its building for overflow during the first two weeks of December. But the need for temporary housing continues to grow among local nonprofits and government entities.

"We're not always able to get everyone housed the way we want to," Friederich said. "My hope is we can regroup as a team and see if there's any viable options and funding to make that happen."