July 22, 2020

New 48-Unit Project in West Fort Worth to Provide Homes for the Homeless


Fort Worth Magazine

By Scott Nishimura

A coalition of private developers, City of Fort Worth, First Presbyterian Church of Fort Worth, leading local foundations, and the DRC Solutions to End Homelessness agency is nearing ground-breaking on a 48-unit, $4.7 million apartment project in West Fort Worth for chronically homeless people.

The project, at 4444 Quall Trail off of River Oaks Boulevard near River Oaks, would be the first standalone one partially funded by $5 million that Fort Worth pledged last fall for permanent supportive housing – apartments for people who’ve been homeless more than a year, have disabilities, and need case management. The coalition hopes it sets a model that can be used in the future on similar projects citywide, to provide housing for Fort Worth’s estimated 1,400-plus chronically homeless.

“The hope is this a project we can replicate across Fort Worth,” Andy Miller, head of healthcare and social services giving at The Morris Foundation in Fort Worth, credited with taking a lead role in organizing foundations, said in an interview.

The city and its housing development arm, the Fort Worth Housing Finance Corp., are close to completing documents on $1.7 million in two foregiveable loans to the project’s recently formed nonprofit owner, New Leaf Community Service, expected as soon as the end of July, Chad LaRoque, the city’s housing development and grants manager, said. Once those documents are done, the group is ready to break ground. Assuming ground-breaking occurs soon, the group expects to complete the development and open it to tenants next year.

“We’ve got all the financing in place; we’re just finishing the contracts with the City of Fort Worth,” Flora Brewer, one of the project group, said. “Once that’s done, we’re going to break ground.”

Brewer’s Palm Tree Apartments – an old 24-unit complex on Race Street in the Oakhurst-Riverside neighborhood in East Fort Worth – has provided the learning lab and foundation for the West Fort Worth project. In 2015 and 2016, Brewer purchased and successfully converted the Palm Tree into 100% permanent supportive housing, serving people previously unsheltered. City and community leaders have touted the award-winning redevelopment, in the heart of a district that’s in a fast transition to higher mixed uses, as the kind that can be replicated. Brewer’s family-run Paulos Foundation owns the Palm Tree and maintains tax-exempt status.

The Housing Finance Corp. is committing $1.2 million, and the city secured another $500,000 in federal Home funds. The loans to New Leaf would be forgiven if the project serves chronically homeless for 20 years. “We wanted to give it sufficient time to be a success without any artificial timeline,” Carlos Flores, the Fort Worth city councilman whose North Side District 2 includes the Quail Trail site, said in an interview.

The city’s $5 million pledge to permanent supportive housing requires a 3-to-1 community match. First Presbyterian Church, a founder and supporter of the Presbyterian Night Shelter in Fort Worth, led the formation of New Leaf and committed $1 million to the permanent supportive housing project in conversations started under now-retired pastor Karl Travis, who entered hospice care in recent months. And the same time it made the commitment to New Leaf, the church pledged $1 million over three years to the Night Shelter.

The remainder of the $4.7 million to build and open Quail Trail is coming from the Paulos; Morris; Amon G. Carter; Sid Richardson; and Thomas M., Helen McKee & John P. Ryan foundations in Fort Worth.

The Fort Worth developers Randy Gideon and Tom Purvis III, instrumental in finding the site, developing the model, and approaching potential funders, are project managers. The Fort Worth firm BOKA Powell is architect. Babek Custom Homes, owned by David Babek, is construction manager.

DRC, the former Day Resource Center day shelter that refashioned itself in recent years into a housing-first advocate for mitigating homelessness in Fort Worth, will perform on-site case management for the project’s tenants. DRC also does onsite case management for the Palm Tree; the agency opened in 1999 after the Ryan Foundation’s namesake, the late John Ryan, Sr., organized a group of funders in response to an article in the Fort Worth Star-Telegram by a reporter who spent a week living as a homeless man in the city.

The DRC secured $403,000 in annual rental assistance subsidies from the federal Housing and Urban Development Department for Quail Trail; tenants will pay about 30% of their income in rent – benefits such as Social Security help – and the subsidies make up the remainder of the fair market rent and pay for tenants’ case management. Critically, the project backers said, Quail Trail should have no debt.

“We didn’t want to have any debt, we wanted it to be owned by a nonprofit, we wanted to reduce all the operating costs as much as we could, so it would be sustainable based on whatever revenue streams we could come up with,” Gideon said in an interview.

The three-acre site, on the periphery of the modest Fair Oaks Addition neighborhood, will feature 12 single-story fourplexes. Each will be 1,400 square feet in size with four one-bedroom apartments of the same size, and hardiplank siding. The design is meant to resemble a single-family home. The lower density and walkable neighborhood feel are part of the city’s move from high-density housing projects to dispersing the population in the city, close to public transit, retail, healthcare and other services.

“It’s a terrific location,” Brewer said, pointing to Trinity Metro bus service on River Oaks Boulevard, grocery shopping at a Walmart closeby, and clinics such as Cook Children’s and recently opened North Texas Area Community Health Center in the vicinity.

The Quail Trail plan includes two community buildings. One will have community meeting spaces and areas for case managers, healthcare, and social services professionals to work with the tenants. The other building will be for a tenants’ laundry. The city granted a “reasonable accommodation” that allows the housing within the site’s commercial zoning, because the complex will serve people with disabilities. The site plan includes ample green spaces with newly planted trees and full fencing, to provide a sense security for residents.

“You want the neighborhood to feel secure,” Mark Dabney, principal and Fort Worth office lead for BOKA Powell, which did the design for a small fee, said. The tenants “are trying to re-establish themselves; they need some sense of security.”

The Quail Trail project brought together numerous people and organizations that have histories of interest in addressing homelessness in Fort Worth.

Brewer, for one, has owned property in the heart of the East Lancaster Street homeless corridor just outside of downtown. In 2006, she bought a number of properties on Race Street. And in 2015, she bought the Palm Tree Apartments for about $700,000 and put in about as much for a total $1.4 million, funded by her foundation. The foundation has disclosed the 24-unit property does about $230,000 per year in gross rents. It pays $3,300 per unit per year to DRC for case management, and funds nighttime security twice a week. The Palm Tree has generated a robust base of data on tenant longevity and turnover, and where tenants go when they leave Palm Tree, numbers built into the Quail Trail assumptions. Maintenance costs run high, recurring expenses that won’t exist with the newly built Quail Trail. “It is the 1955 gift that keeps on giving,” Brewer said of the Palm Tree.

A 100% permanent supportive housing development in a for-profit model would be very difficult, for factors such as the case management fees, Brewer said. “It does not work,” she said.

The foundation could easily sell the Palm Tree, but Brewer wants to be part of the solution. “Hardly a day goes by when I don’t get a call from a broker” who wants to buy the apartments and raise rents, she said.

At First Presbyterian, the church was one of three that founded the Presbyterian Night Shelter in 1984, and it’s worked for the DRC for years and followed Brewer’s experience with the Palm Tree.

The church committed its $1 million to permanent supportive housing in a three-year pledge at the end of 2018, allocating the money from its outreach budget. In early 2019, it led the formation of New Leaf, creating a important nonprofit vehicle for the raising of money, and owning and running the complex.

“There’s a long legacy at our church of caring for the homeless; this seemed to us like the next natural step,” said Jamie Downing, a local lawyer, First Presbyterian member, New Leaf board member, and chair of the church’s mission outreach committee in 2018, when the governing board and Travis initiated conversations about housing. Church member Steve Christian is New Leaf’s chair.

First Presbyterian began having conversations with Gideon and Purvis about permanent supportive housing in 2018, connected to them by Tara Perez – director of the city’s Directions Home program, founded in 2008 and championed by then-Mayor Mike Moncrief with a goal of making homelessness rare, short and non-recurring. Gideon and Purvis had become interested in housing and already been contacted by Perez, who also connected them with Brewer.

Gideon and Purvis developed the 250 Lancaster mixed-use project – now Pinnacle Bank Place – in 2016 in downtown Fort Worth. The two began hunting sites two years ago and found the Quali Trail site after three to four months of searching; New Leaf purchased it a year ago.

Gideon, a member of the Meadowbrook-Poly United Methodist Church in east Fort Worth, started looking into solutions for homelessness when he was tipped to a building near the church by a minister. The church is a short distance from East Lancaster. “When you drive down East Lancaster, it’s not hard to see the need,” Gideon said. “That put me on a quest to try and figure it out.”

Gideon and Purvis also are at the good points personally. Nine years ago, Gideon underwent a successful double-lung transplant. “Fortunately, we’re at a place in our lives where we can take on something like this and work on it a few years, and have some fun,” Purvis said.

Their expectations were optimistic. “Tom and I are real estate partners,” Gideon said. “We thought, how hard can it be to build some housing. We got a real education on the politics, all the physical parameters that have to be involved, all the revenue streams and taxes that impact operating costs.”

HUD has a number of requirements for such sites. Those include high walkability, and proximity to a grocery store, bus line, education, and healthcare.

Gideon and Purvis set up a computerized map to identify and sort potential sites, using the federal requirements and working with City Council members, Purvis said. “Part of it is deductive. You have (required) site characteristics. We started turning off properties that didn’t have the qualities. That’s how you kind of back into it. We probably burned through 50 before we got to this one.”

Gideon and Purvis have provided their services pro bono; Gideon said the budget provides for small project management fees as construction moves forward.

Brewer; New Leaf board members Christian, Beth Rivers and Jim Parr; Gideon; and Purvis made group pitches on foundations. Morris committed verbally after First Presbyterian’s commitment. In the summer 2019, Morris, which has historically served the city’s most vulnerable populations, announced it was moving into an unusual new giving strategy under which subject matter experts in education, health care, and social services lead in solving critical challenges to people most in need. Morris’ main focus in in social service is homelessness, and, in health care, it’s mental health.

Brewer’s Palm Tree model “provided a lot of lessons,” and New Leaf provided a “backbone organization” the city didn’t have, the foundation’s Miller said. Housing “pays for itself, multiple times over,” in reducing homelessness and its draw on healthcare, social services, police, and other scarce community resources, he said.

“It decreases crime; we have good data,” Miller said. “People are permanently housed. So they’re invested in the upkeep, they’re invested in the sustainability. They’re not transitory. They also have the supports that permanent supportive housing brings. There’s no landlord making a quick buck on it, trying to keep costs as low as possible so they can make a profit.”

New Leaf wants to offer a number of services onsite, Christian said. Those include JPS Health Network mobile healthcare, MHMR, guardianship services, Workforce Solutions for Tarrant County employment services, and even master gardeners. “We’re hoping there will be a vegetable garden,” he said.

The DRC, since repositioning itself after the new True Worth Place supplanted its role as a resource center, has seen its growth skyrocket. When it closed the Day Resource Center in 2016, it had an $800,000 annual budget and 12 staff members. At the end of 2019, it had a $1.9 million budget and 33 staff, focusing on getting clients into housing and managing housing. “Between January 2020 and now, we’ve secured another $1.4 million in contracts,” Bruce Frankel, the executive director, said in an interview.

The agency has about 1,600 clients per year under some form of case management. Many of its clients have mental illness or drug and alcohol addiction. It provides case management at five apartment complexes. New Leaf will enter into a contract with DRC to provide case management and assign two onsite managers there. “It’s basically a scalable version of Palm Tree,” Frankel said.

The Quail Trail group already is looking closely at one site for the next housing development after Quail Trail, Gideon said. “We probably have a pool right now of maybe a dozen pretty good candidates,” Purvis said.

For future projects, the group wants to look at other funding sources that reduce the amount of required philanthropy per project. Such sources include federal New Market Tax Credits and home bank loans, Perez said.

“You’re not really going to make money at permanent supportive housing,” Miller said. “We need these projects to be sustainable and break even, so they’re not reliant on philanthropy.”

The Housing Finance Corp.’s intent is to produce at least 200 units of permanent supportive housing with its $5 million commitment, plus the ommunity match, Perez said. So far, the city is halfway to that goal, with the New Leaf project and money committed to Fort Worth Housing Solutions for a larger project that includes 50 permanent supportive housing units. “We anticipate funding a couple more PSH projects in order to reach our goal of 200 units,” Perez said.

The estimate of 1,450 units comes from a consultant’s study done several years ago for the Samaritan House nonprofit in Fort Worth, and generally assumes one inhabitant per unit. Permanent supportive housing goes to people who are currently homeless and have been for more than a year, have a disability, and need case management. The most expensive and intensive intervention among solutions, “only about 15% of our homeless population qualify for it,” Perez said.

But the federal government estimates cost of homelessness at $35,000-$40,000 per year per person, including the costs of emergency shelter, use of emergency medicine, ambulance usage, hospital admission, and criminal justice, Perez said. Permanent supportive housing is “still far cheaper than the cost of homelessness.”

Morris will continue to invest in such projects, Miller said. “Over the course of the next five years, we’re hoping to be investing in significant projects which will probably be more than $5 million.”