This is a story of how faith, vision, ambition, collaboration and partnership create amazing opportunities.
Crossroads Bible College, located in a bucolic wooded valley in southwest Rochester, went out of business in 2015. For nearly three years local developers and real estate agents tried in vain to find a financially sustainable use and buyer for the facility. In 2017 along came Bear Creek Church (BCC), a non-denominational Bible church with a small congregation and a huge faith-based vision. They crafted a creative financial strategy with the family estate that held the mortgage that transformed dorms and classrooms to transitional and studio apartments. Then they leased the units to local non-profit substance rehab programs and housing agencies. The financial pro forma was extremely tight but, if the apartments rented, the package could work.
The first challenge was to acquire the permits required to repurpose the dorms. Unfortunately, the facility had deteriorated to the point that extensive rehab was urgently needed. BCC lacked the funding to make the repairs and swing the purchase both so they approached The Coalition for Rochester Area Housing for assistance.
The Coalition for Rochester Area Housing is a funders’ collaborative that was formed in late 2017 by Olmsted County, the City of Rochester, Mayo Clinic and Rochester Area Foundation. With $4.6M in start-up funding, the Coalition was seeking niche projects for which commercial financing was not an option. BCC’s Crossroads College vision was a great fit for The Coalition’s mission.
First, the Coalition funded a professional physical needs assessment to determine the most urgent repairs. The Coalition then provided a forgivable loan of $350,000 for immediate repairs to retain the permits required for the rental business. Repairs included windows, roofs, siding, HVAC and asphalt driveways and parking lots. Jeff Urban, Outreach Pastor for BCC, was a miracle-worker acquiring donations and innumerable hours of volunteer labor from his congregation to keep costs to a minimum.
With the physical facility stabilized, the vision for transforming classrooms into studio apartments began. Again, the Coalition stepped in with a $450,000 loan/grant package to support Phase I that will create nine units with rent rates that target folks with incomes well below 50% of Area Median Income. Phase I is underway at this time and Phase II, an additional eight units, is anticipated for autumn 2020. This project will provide seventeen low-income transitional apartments for less than $50,000 per unit that are urgently needed in Rochester.
Four years ago it appeared certain that the Crossroads College campus was destined for the wrecking ball. Today Rochester has nearly fifty, urgently needed, transitional housing units. In addition, with the assistance of a grant from Three Rivers Community Action program, a development plan is underway for the remainder of the campus that will provide more housing.
A small church congregation, with profound faith, ambitious leaders and a huge vision, partnering with an innovative local philanthropic housing fund, has transformed a defunct and deteriorating facility into a community asset that will provide housing for low-income citizens for decades to come.
Key Learnings:
Locally based, philanthropic funding can enable niche projects that would be otherwise unattainable with traditional commercial financing sources. Projects like the Bear Creek Church transformation of Crossroads College campus leverage existing resources much more efficiently and inexpensively than building new. Faith, vision, ambition, collaboration and partnership create opportunities.
Other Details:
The Coalition for Rochester Area Housing is a volunteer, consensus-based funders’ collaborative. Original contributions were: Mayo Clinic-$4M, City of Rochester-$250,000 plus project-based Tax Increment Financing, Olmsted County-$250,000 plus HRA resources and Rochester Area Foundation-staff and facilities support. The Coalition also includes “The Alliance” which is their community outreach arm made up of non-profit agencies and businesses involved in housing in Olmsted County. To date The Coalition has committed nearly $5M in loans, grants and TIF in support of nine housing projects.
For more information, contact: Steve Borchardt, Director of the Coalition for Rochester Area Housing at steve.borchardt@rochesterarea.org or visit http://www.rochesterarea.org
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