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PROPOSED ARPA FIXED SITE SHELTER - ACQUISITION PROGRAM
Department: Planning and Development
Other Part(ies): Connections for the Homeless, Inc., Evanston, Illinois
Request: Respectfully request the Board of Commissioners approval of a $7,000,000, 30-years, 0% permanent loan using American Rescue Plan Act (ARPA) funds to acquire an existing hotel facility to create a fixed site, 70-person, non-congregant, permanent shelter facility.
Total Development Cost: $15,015,476.00
Project Loan Amount: $7,000,000.00
Fiscal Impact: $7,000,000.00
Account(s): 11286.1013.66737.580170.00000.00000
Summary: Connections for the Homeless, Inc., (Connections) has requested $7,000,000 in American Rescue Plan (ARPA) funds for the acquisition of an existing hotel property in Evanston, IL. The loan has a thirty-year term, 0% permanent loan rate and is fully forgivable at maturity. The acquisition funds will provide acquisition and closing costs for the fixed-site non-congregate shelter serving up to 70 residents in Evanston.
The subject site address is located at 1566 Oak Avenue in Evanston, Illinois. The subject site is in a mixed-use area of residential and commercial use in the city of Evanston, IL. The subject site is currently comprised of an existing Hotel structure, The Margarita Inn, which operated as a boutique 55-room hotel for 85 years prior to the Pandemic.
Since March 2021, Connections has master-leased the hotel and operated a fixed-site homeless shelter. Emergency COVID-19 federal dollars in the form of either CDBG CV or American Rescue Plan Act (ARPA), via Cook County, have sustained this model in the short-term. Long-term, this model was not sustainable as it currently costs approximately $2,400,000 annually to operate the homeless program at this location with hotel rents accounting for up to $1,500,000 of expenses and absent a long-term stream of revenue to support operations.
Connections, in partnership with its Alliance of Homelessness (Alliance) partners, Cook County, the State of Illinois, the City of Evanston and philanthropic sources, create a unique opportunity to ensure this capacity is permanent.
The State of Illinois in its 2023 Budget, with extensive advocacy from Alliance members, extended and increased established funding to directly support both the operations of shelters and the services required to advance individuals and families to sustainable housing. Over $51 Million was accorded to Shelter Operations and Services through the Illinois Department of Human Services, granting immediate funding to existing shelter providers, such as the subject operator Connections for the Homeless (Connections), while creating future opportunity for agencies to request funding throughout the suburban region.
This combination of Operating Funds with the subject Capital enables the shelter to be sustainable long-term.
There are 46 rooms, operated as either a private-individual, family room or roommate room. The shelter is gender neutral and open to all adults ages 18 or older, families with children, and two rooms (4 beds) are dedicated for young people ages 18-to-24. Each room has a private bathroom, closet, dresser, small refrigerator, television, phone, and Wi-Fi access. Rooms are accessed via keycards provided by the Margarita Inn.
Participants have access to their rooms 24 hours per day, and the Margarita Inn is also staffed 24 hours per day. In addition to safe, private shelter, every resident has access to a range of onsite services as they work toward their plan for a permanent housing solution. Exit planning is a requirement of the program. Since implementing this new model at the Margarita Inn in March of 2020, the average length of stay is approximately 7 months and 57% of residents have transitioned to stable housing.
Connections is a corporation organized to develop a program for people experiencing or at risk of homelessness. Connections’ mission is to serve and catalyze the community to end homelessness, one person at a time. Building off nearly 40 years of experience serving people who are homeless, Connections now offers shelter to people of all genders and family configurations.
Participants have access to richer services that are available onsite, which has significantly improved participation in workshops and programs to help ready the household for program exit. 24/7 onsite physical and mental health support also improves stability and overall health of participants. Staff can also connect with shelter residents more quickly as housing opportunities become available. This is particularly helpful given that when a housing option arises, it is very time sensitive and critical staff can connect with the participants to ensure they do not lose the opportunity.
Connections services will provide:
• Intensive case management provided by full-time, onsite staff that co-develop housing exit plans and address or eliminate barriers to securing a permanent home.
• Housing location services and support enrolling in all available solutions including the Coordinated Entry system administered by the Alliance to End Homelessness in Suburban Cook County
• Physical and mental health care provided by full-time, onsite licensed health practitioners including an MD, a nurse, a nursing assistant, and mental health professionals.
• Benefits enrollment and redetermination assistance for participants for public benefits (e.g., SNAP, Medicaid, TANF, WIC, SSDI, etc.)
• Life-skills training along with education and employment services (e.g., resume writing, interview preparation resume writing, test prep etc.
• Health education classes, financial literacy workshops, tenant literacy trainings
• Onsite well-being programs (e.g., art therapy groups, movie nights, storytelling groups, etc.)
• Transportation support for appointments and education and employment opportunities
• Laundry services
• Three daily meals
Of note, this development represents a directional change in how the homeless are served in Suburban Cook County. Prior to the Pandemic in 2020, sheltering was primarily provided in the Overnight Pads Model, which supplied shelter overnight in facilities provided by churches, synagogues and other private facilities. Operations relied heavily on volunteers with minimal permanent staffing. Shelter guests were required to vacate the facility during the day, locate and travel to the rotational shelter available for the next night. While the lack of physical assets to support the shelter operations on a full-time basis was identified prior to 2020, the pandemic proved out the shortcomings of this model as facilities and volunteers were inconsistently available early and non-existent as the pandemic worsened.
The provider community of non-profits, the Alliance to End Homelessness, State, County and local municipalities worked to establish hotel-based sheltering, taking advantage of the bounty of rental nights available as tourism plunged during the pandemic. Advocacy at the Federal and State level supplied funding to support the sheltering operations during the pandemic. As the pandemic ran its course, the hotel sheltering model increasingly became unsustainable in the third year (current) of operations. A more sustainable model of removing the rental element and supporting operations was required.
Reducing the leasing costs amounted to attempts to acquire hotel locations, such as the subject request, locking in the assets for long term use, without paying short-term rates. Operations would be another challenge that advocates took to the State of Illinois to support, as Illinois does not have a defined revenue source to support homeless efforts as other States and municipalities, e.g., Transfer Tax, Sales Tax, Bonding Authority.
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