Olmsted County to become transitional housing landlord with $5 million building

ROCHESTER — Scrapping their plans for a homeless shelter east of downtown, Olmsted County officials want to buy the same low-income apartment property to turn it into transitional housing.

County officials outlined their new strategy Thursday in a meeting with neighbors of the Residence of Old Town Hall, the property Olmsted hoped to turn into a nearly $13 million shelter.

The county still intends to buy the $5 million property even after state funding fell through toward the end of 2023. Instead, local housing officials want to run the complex as transitional housing for the area's vulnerable residents with rents at or below market value.

"We don't want to lose money on it, but we're not trying to make money on it," Olmsted County Housing Director Dave Dunn said.

Dunn said county officials plan to rent out 55 units, some of which will be set aside for adults up to 24 years old without a home as well as low-income Mayo Clinic patients who need a place to recuperate from treatment.

County officials will hire three full-time staffers to run the complex, including a social worker. They also plan to contract with a nursing company to help residents in recuperative units once they close on an agreement with owner Jeff Allman and take over the building later this spring.

Once that's done, Olmsted will convert some of the units to increase the number of community kitchen spaces in the building. The housing complex will cost slightly under $600,000 to operate, but local official estimate rents and subsidies will cover the cost at a sliver of a profit.

Allman said the building was designed in the 1960s with transitional housing in mind, such as community kitchen units instead of in-apartment appliances so more than one person could fit into each unit.

"There's all sorts of good things that just fit this program perfectly," he said.

More than a dozen residents who attended the meeting supported the county's new plans. Several neighbors were concerned about the county's previous homeless shelter proposal, fearing it could increase crime in the neighborhood.

"It's an excellent use of the building," Mary Jo Majerus said. "And I feel much more comfortable having this open conversation."

Though Olmsted is adding more housing units with the project, the county's plans to address homelessness in the area remain unfulfilled.

Dunn said housing officials and nonprofits are analyzing where a homeless shelter would best fit in the community.

He acknowledged that nearby neighbors will likely oppose a shelter no matter where it's built, but he said he hopes residents will understand the community's need to tackle increasing homelessness.

"It's going to be hard," he said. "We'll need to work with everyone we can and come up with the best solution."

Olmsted County Board Chair Sheila Kiscaden said the new plan for Residences of Old Town Hall is part of a larger strategy to offer housing across the community's specturm of economic means.