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Churches making real estate a mission

Housing for seniors, disabled their aim

Sunday, January 27, 2002

By Jan Ackerman, Post-Gazette Staff Writer

Correction/Clarification (Published Feb. 3, 2002): Some funding figures for an apartment building for the handicapped being built by Warren United Methodist Church and Goodwill Industries were incorrect in a Jan. 27, 2002, story about churches that are developing housing as part of their mission. The Pennsylvania Housing Finance Agency provided $112,000, the Urban Redevelopment Authority provided $324,410 and the Federal Home Loan Bank provided $45,000.

Monsignor George Appleyard left St. George's Ukrainian Catholic Church two years ago for an assignment in Ohio, but he still commutes to the Brighton Heights church to oversee its newest real estate development.

"If anyone would have told me that I would be up to my elbows in bricks and mortar, I never would have believed it," said Appleyard, proudly showing off 18 brand-new, all-brick apartments adjoining the church that will be dedicated on April 21.

The project, called St. George's Close, is the second housing project for the elderly built by St. George's, a parish of 220 families on California Avenue. The church's first senior citizen project, Sheptytsky Arms, a 50-unit high-rise behind the church, was built in the late 1980s and is rented to senior citizens who meet income levels set by the U.S. Department of Housing and Urban Development.

Why does St. George's continue to build apartments for low-income senior citizens?

"There was a pressing social need," said Appleyard, president of the board of St. George's Close.

"It certainly achieves the mission of the church to help those in need," said Peter Czuczman, a parish member who is vice president of the two boards that oversee the two apartment projects.

St. George's, Warren United Methodist Church in the Hill District and Emory United Methodist Church in East Liberty, are among the smaller, local churches that have decided that an important part of their mission to save people's souls is to help provide better housing opportunities in their communities. All three churches have built apartment complexes that will open this spring.

"An urban church must begin to address urban problems," said the Rev. Clyde Henry, pastor for the past 10 years of the 270-member Warren United Methodist. He said housing was one of those problems; education, health care and employment are the others.

Initially, Warren Methodist wanted to build senior housing, but a neighborhood study of the Hill District showed that a greater need existed for apartments for the physically handicapped.

So the church teamed up with Goodwill Industries and the U.S. Department of Housing and Urban Development to build a $1.5 million, 15-unit apartment building for the physically handicapped at 2541 Centre Ave.

"One of the secrets to success is to run around with people who have the know-how [in developing apartments]," Henry said.

In East Liberty, Emory United Methodist, an integrated congregation of about 300 people with a rich history, is getting ready to open a $3.5 million, 24-unit apartment building for low-income elderly this spring.

"It has been in the minds of Emory people for a long time. When the ground became available, they purchased it for that purpose, but they could not get funding to do it," said the Rev. William D. Morgan, who retired as Emory's senior pastor in July. He still serves as vice president of Emory Community Outreach, the nonprofit organization set up to develop the apartments.

In each case, the leadership of the churches waded through a formidable and often unfamiliar world of real estate development.

In undertaking the projects, each church had to accept the fact that it must open rental applications to the entire community, not just to their members.

"The churches are not allowed to ensure that their members have housing [in the complex]," said Howard Slaughter Jr., director of the Pittsburgh Partnership Office of the Federal National Mortgage Association, the largest source nationally of financing for home mortgages.

"They are doing it for the community," Slaughter said.

Churches that build housing often face opposition from within their membership.

"As pastor, sometimes I have to grind my teeth to the opposition," said Appleyard, who considers the projects to be among a church's "necessary works of mercy."

Most churches that decided to dive into the muddy waters of real estate development have overcome funding barriers by forming separate, tax-exempt, nonprofit corporations to develop and run the apartments they built. The churches usually find that the best way to proceed is to team up with a developer or nonprofit organization that has expertise.

"These churches can't do these projects alone. They need a good quality developer to do the project," said Dennis Davin, director of housing for the Pittsburgh Urban Redevelopment Authority, which provided "gap" financing to make some of the projects work.

More and more small churches are interested in developing apartments or housing in their communities as a way to preserve their membership and to stabilize their neighborhoods, said Slaughter, who is working on an initiative involving about 20 churches around Pittsburgh that are pooling their resources to find better ways to develop low-income housing.

With President Bush placing an emphasis on "faith-based initiatives," the idea of churches developing housing seems to be a new one. Actually, it is not.

In 1976, several business people and two Roman Catholic nuns from Lawrenceville, Sister Coleman Conroy and Sister Veronica Phillips of the Order of St. Francis in Lawrenceville, formed Christian Housing Inc., a nonprofit corporation, and began building HUD-financed, high-rise apartments for low-income senior citizens.

The nuns' first two projects were St. Augustine Plaza in Lawrenceville and St. Justin Plaza in Mount Washington.

"We have built 25 of these buildings since 1976," said Phillips, who now is in her 70s and still working in the apartments.

Christian Housing Inc. has apartment buildings in Beechview, Bethel Park, East Hills, McKees Rocks, Mount Washington, Polish Hill, Spring Hill, Greensburg and Indiana and is getting ready to convert part of the former Resurrection Elementary School in Brookline into 25 apartments.

On the national level, National Church Residences Inc., a nonprofit corporation that has developed 14,000 elderly housing units nationwide, grew out of an initiative that began in 1961 by four Presbyterian churches from Ohio. It operates a number of complexes in the Pittsburgh area.

In the late 1980s, St. George's Ukrainian Catholic Church formed a separate nonprofit corporation and built its first low-income senior housing project, Sheptytsky Arms, with funding from the U.S. Department of Housing and Urban Development's 202 program.

As the years went on, the church decided to develop a second project. After four false tries, St. George's teamed up with Action-Housing Inc., a nonprofit organization, to develop St. George's Close.

Mary Hare, Action-Housing's housing program developer, said the $1.7 million project was financed through Pennsylvania Low Income Housing tax credits. It includes a $469,000 loan from the Urban Redevelopment Authority of Pittsburgh, $50,000 from Action-Housing, $180,000 from the ESB Bank through the Federal Home Loan Bank's affordable housing program and about $1 million from PNC Bank in low-income tax credits.

"They wanted to build some apartments for neighbors who were just above the income levels determined by HUD," Hare said, adding that renters at St. George's Close can have incomes that are about $4,000 higher than at Sheptytsky Arms.

Sota Construction Services built the one-bedroom units, which will rent from $270 to $330 per month, depending on formulas used to calculate a renter's income.

At Emory United Methodist, the church dreamed of building apartments on a piece of land it owned for more than 30 years, said Marlin Mickle, president of the board of Emory Community Outreach, the nonprofit that was created to develop apartments for low-income senior citizens.

Morgan, who became pastor in 1994, said he tried to work with HUD to develop the property, but, "it was too overwhelming."

"Their application was 4 inches thick," he said.

Eventually, the church partnered with TREK Development, a private developer, and PNC Bank, which is providing tax credits for the $3.5 million project.

Warren United Methodist partnered with Goodwill Industries, another Methodist-based organization, to build Warren Plaza, its 15-unit apartment building for the handicapped, through a HUD 811 program for nonelderly handicapped people. The church bought the half-acre tract on Centre Avenue for the building in 1995 with a $150,000 grant from the United Methodist Church Union.

"We are scheduled to be finished within a month," said Henry, a pastor who spends much of his time meeting with HUD officials.

Construction of Warren Plaza was funded with a $1.04 million grant from HUD, $320,000 from the URA, $50,000 from the Federal Home Loan Bank and $20,000 from the Pennsylvania Housing Finance Agency, which helps people with low and moderate incomes find homes.

When the building opens, Henry said, his church will be starting its next mission.

"We now need to develop a program for the handicapped who live there. That would operate out of our church."

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