Peachtree-Pine shelter escapes foreclosure
By Maria Saporta
Friday, February 26, 2010
One of Atlanta’s largest homeless shelters has once again skirted foreclosure, at least for now.
The Atlanta Task Force for the Homeless’s building at Peachtree and Pine streets on the northern edge of downtown had been scheduled for the auction block on Tuesday, March 2.
But on Wednesday, Feb. 24, Ichthus Community Trust, which holds the primary loans on the property, postponed foreclosure for at least a month.
“Ichthus is doing that with the hopes that the Task Force can come up with the money to pay off all their debts and work out something with the community,” said Emanuel “Manny” Fialkow, the business affairs consultant for Ichthus Community Trust.
This is the third time the Task Force has faced a possible foreclosure, and it is the third time that it’s managed to get it postponed.
“They have always managed to get up to the brink and find a way to back down,” said Milton Little, president of the United Way of Metropolitan Atlanta Inc., which has been working on a plan to help find housing for the 500 to 700 men who use the Peachtree-Pine shelter on a daily basis.
“We are not involved in the day-to-day conversations,” Little said of the current machinations with Peachtree-Pine. “We’re on the sidelines. We are just standing there ready to help the men in the facility.”
The situation is even murkier because the Task Force has subpoenaed Central Atlanta Progress, a downtown business group, and the city of Atlanta, arguing that the two have been successful in getting much of the shelter’s government funding cut with a goal of closing it down.
The Peachtree-Pine building has been a lightning rod in the community. The Task Force has argued that it is helping serve homeless men that have nowhere else to go. Other community institutions have argued that the Peachtree-Pine shelter is not the best way to serve the homeless community.
The Task Force has been facing mounting debts as it has quit receiving substantial funding from federal, state and local governments.
Ichthus purchased two primary loans on the property from Mercy Housing, a nonprofit lender in Colorado, and the Institute for Community Economics, a nonprofit based in Massachusetts. Both loans total about $900,000.
The Task Force also has several other debts and liens that could total as much as $3.5 million or more. In an effort to pay off its loans, the Task Force has been trying to sell the Peachtree-Pine building.
In fact, Fialkow said he was first approached by the Task Force’s broker a year ago to see if he was interested in buying the building. He made an offer, but it was not accepted.
Steve Hall, an attorney with Baker Donelson, Bearman, Caldwell & Berkowitz P.C., which is representing the Task Force, was working the morning of Feb. 24 to try to “hold off the foreclosure for 30 days” to give his client more time to work out its financial situation.
“We have an existing offer on the property for $4.2 million,” Hall said. “We have paid down principal and we’re current on all the interest that’s due.”
But Hall acknowledged that it likely would not be able to pay down its loans after Feb. 28. In the meantime, the Task Force is continuing its legal case against the city and CAP.
When it looked as though there was a good chance that Ichthus could end up with the shelter through the March 2 foreclosure process, Fialkow made several commitments on what the “benevolent investment group” would be willing to do to make sure hundreds of men did not end up on the street.
“If Ichthus ends up being the owner, it is committed to spending about $500,000 in transitioning the residents into the community,” Fialkow said. “It would definitely not kick out anyone immediately, and it would not close the shelter immediately.”
Also, Fialkow said the trust “would absolutely not close the shelter without a proper plan to move them gradually to another place.”
United Way and the Regional Commission on Homelessness have been working on such a plan.
“We have a transition plan that would identify and work with between 20 to 25 men per week to help connect them to other housing,” Little said.
Protip Biswas, executive director of the commission, said the model they would use would be a “Shelter to Home” model, where they would place the men in apartments and have case managers work with them to receive the support services they need, be it mental health services or substance abuse issues.
“We have done this for over 700 men in the last two years,” Biswas said. “We will have to create a supply of new beds. We are confident every one will give priority to these men.”
The cost of providing services to previously homeless men living in apartments is about $8,000 a year. That means it would cost about $4 million to house and care for about 500 men for a year.
Little said he was confident the Atlanta community would respond to this situation.
“There are a number of donors around town that have been very generous with our efforts to end homelessness,” Little said.
The commission has pledged to try to end “chronic homelessness” in metro Atlanta within a 10-year period. Biswas said the commission already has “created 2,000 beds” of transitional and permanent housing in the past six years plus another 450 beds for women and children.
It also was instrumental in creating the Gateway Center, a downtown facility that is a one-stop shop to serve the homeless by matching them with their needs — from medical services, reunification with family members, career training, and substance abuse programs.
“The move over the last few years has really been about ending chronic homelessness and not about just housing the homeless,” Little said.
“We surround them with support services that they need at their home. The organizations that have continued to warehouse the homeless are fewer and fewer across the country.”