By JULIE MINDA
Sweet Auburn, an Atlanta neighborhood thick with civil rights history and famous as
the birthplace of the Rev. Dr. Martin Luther King Jr., has had its financial ups and downs through the decades. Recent boom times have not benefited all citizens in equal measure.
Mercy Care opened a federally qualified health center in the neighborhood 20 years ago to provide health services to families who are uninsured or struggling economically. Mercy Care is a member of Atlanta's Saint Joseph's Health System and Trinity Health.
The clinic operates Atlanta's only health care for the homeless program. Half of its patients are homeless. About 60% are uninsured; some 30% have Medicaid coverage; approximately 5% have Medicare insurance; and around 8% have private insurance. Roughly
three out of four of the clinic's patients have incomes that fall below the federal poverty line.
Known as a mecca for Black professionals, the Atlanta region's business cachet grew and its population exploded in the past 20 years. Sweet Auburn was among urban neighborhoods that began to gentrify. As housing and land prices spiraled up, long-time
residents got pushed out. Most clinic staff commute more than 20 miles from the suburbs because they too have been priced out of Sweet Auburn.
To address housing affordability and instability while also expanding health care access and services, the clinic's parent Saint Joseph's Health System has been leading efforts to turn the clinic's property into a mixed-use development with expanded health
services and two affordable housing apartment buildings. The housing will include a mix of near-market-rate and subsidized units, including permanent supportive housing and transitional housing for patients.
Mercy Care opened a 36,000-square-foot addition to its clinic last year. The campus is just a block from a public transit station.
"Having health services and housing in proximity to each other can solve for many issues that prevent people from making health care a priority," says Kathryn Lawler, chief executive of Saint Joseph's Health System and Mercy Care.
"We know what impact social needs, including housing, can have on health. And health systems have an obligation to care for the community. To do that, we need to reimagine the health care model and focus on what makes people healthy."
Lawler adds that systemic racism long has deprived people of color, and particularly low-income Black people in Southern states, of access to adequate housing. She says the lack of safe housing has a direct impact on health.
Tom Andrews, who retired last May as chief executive of Saint Joseph's, came up with the idea and got the ball rolling for the mixed-use campus. Its name, McAuley Park, honors Catherine McAuley, the foundress
of the Sisters of Mercy. The congregation started Saint Joseph's.
Andrews says Saint Joseph's took the lead in master planning for the housing development. Saint Joseph's identified key funding sources for the housing development, selected the design team, and courted potential participants and supporters including
the city of Atlanta and the Sweet Auburn community.
In 2016 Saint Joseph's purchased sufficient land adjacent to the Mercy Care clinic at 424 Decatur Street in Sweet Auburn to expand the clinic and construct the housing complexes.
Early in 2020, Saint Joseph's brought in Pennrose, a for-profit real estate developer, as a co-owner, co-developer and property manager of the $81 million housing development called McAuley Station. Pennrose is formalizing the complex stack of public-private
financing for McAuley Station. Saint Joseph's and Mercy Care are leasing the land for the housing to Pennrose.
Jaime Dircksen, Trinity Health vice president of community health and well-being, says the partnership and project gained the momentum they needed with local government agencies because of Saint Joseph's involvement and the strong capital commitments
that both Saint Joseph's and Trinity Health brought to the table along with their reputation-based ability to attract additional partners.
Health service expansion
The first leg of the project, the expansion and renovation of the Mercy Care clinic, was completed about a year ago. Mercy Care's foundation raised funds to cover the $22 million in construction
costs. The construction modernized the existing clinic and added a three-story building. With clinic space more than doubled, Mercy Care expanded behavioral health and dental services and added vision care.
The expansion is allowing Mercy Care to add 3,000 patients to the 6,000 already on its rosters at the Decatur Street location. Mercy Care also opened a community resource center where community health workers address the social needs of patients. Many
of the significant proportion of Mercy Care's patients who are unsheltered or experiencing housing instability rely on mental health services and social services.
In May 2022, construction began on a 170-unit, $50.5 million family housing complex. The family housing complex could be move-in ready early next year.
Thirty of the units will be permanent supportive housing for people with diagnosed mental illness and 10 will be transitional housing for people discharged from medical care and for Mercy Care patients. Saint Joseph's and Mercy Care are helping to fund
the transitional housing units.
In line with parameters set out in the project's financing agreements, nearly 60% of the units will be for renters with low incomes; about 18% for those with extremely low incomes; and approximately 18% for those with moderate incomes. (The remainder
are for people needing transitional housing after discharge from medical facilities.)
Andrews says it is most likely staff members who apply for residency would qualify for the "workforce" units rather than rent subsidized units. Workforce apartments are for tenants with moderate household incomes.
The final phase of the development will be a $30.5 million senior housing complex with 96 affordable independent living apartments. Construction may begin in the third quarter of 2024, with completion potentially in 2025.
Planting a flag
Plans call for Mercy Care clinicians to offer health screenings at both the senior and family housing complexes to residents who want them.
Dircksen says the funding Trinity Health is providing for the housing portion of the project constitutes the largest single investment that health system has made in a health care-housing development project. She notes that this investment is in line
with Trinity Health's focus on investing in projects and programs that will improve the health of the communities it serves.
Dircksen says that Saint Joseph's is the only health care organization in Atlanta that is involved in a project that integrates health and housing. She hopes the initiative will be a "call to action" for other health care providers in Atlanta and in other
cities experiencing a housing crisis.
Lawler notes that health care providers do not need to be housing experts, they just need to be good at assembling committed coalitions of partners to address housing inequities. Chances are that health care providers already have relationships with the
types of partners that could be vital in such a coalition, she says.
"We hope this becomes standard. We don't want McAuley Park to be a unicorn," Lawler says.
In other good news for the neighborhood, the nonprofit Mercy Housing is preparing to open a 117-unit development for families and for individuals who were formerly unhoused about a half mile from the Mercy Clinic. Thrive Sweet Auburn is a mixed-use development with social services and some commercial space onsite. It has permanent supportive housing, and affordable housing for households that earn between 30% to 80% of the area median income.
Partners and financing arrangements for McAuley Park's family housing complex
Nearly a dozen organizations are participating in the financing stack for the $50.5 million family housing complex at McAuley Station. McAuley Station is the affordable housing component of the McAuley Park health care-housing development in Atlanta.
The family housing complex is phase one of the housing component of the development. Phase two will be a $30.5 million senior housing complex.
Amon Martin is southeast region vice president for Pennrose, the housing complex developer and co-owner. It broke ground in May 2022. Martin offered the following financing details for the family housing complex:
- Saint Joseph's Health System, Atlanta, owns and is leasing the land, and is a co-developer of the family housing complex, with a 20% ownership interest. In addition, it provided $4.37 million to erect a shared parking deck at McAuley Park.
- Pennrose is co-developer and co-owner of McAuley Station and its property manager. It has an 80% ownership interest in McAuley Station.
- Trinity Health, Livonia, Michigan, provided a $4 million long-term, low-interest loan to the family housing complex.
- Truist Bank, the construction lender, is investing $30 million in
private equity generated from an allocation of low-income housing tax credits from the Georgia Department of Community Affairs. With that investment, the bank will become
a limited equity partner in the family housing development.
- The Department of Community Affairs also provided a $3 million HOME loan, which is a Department of Housing and Urban Development loan, and a $4 million National Housing Trust Fund loan.
- Invest Atlanta, the city's development authority, issued tax-exempt bonds in the amount of $23 million and provided a $4 million tax allocation district grant.
- Partners for Home, an Atlanta nonprofit, provided a $1.2 million grant toward 30 permanent supportive housing units for people with diagnosed mental illness.
- Atlanta Housing, the city's public housing authority, will provide project-based rental subsidies for residents of the permanent supportive housing.
- Fulton County, Georgia, is funding a case manager to provide supportive services to residents of the permanent supportive housing units.
Even in Atlanta's racially diverse metro east, many Black residents 'left behind' economically
Partners developing health and housing services on the Mercy Care campus in the Sweet Auburn area of Atlanta are directly addressing some of the housing access concerns that gentrification has brought to the neighborhood.
Will Snyder is co-founder and chief executive of Metopio, an online subscription-based service that enables public health and health care professionals to use demographic data to better understand populations and to make decisions related to those
populations. Snyder says while it is difficult to isolate and analyze demographic data for the relatively tiny Sweet Auburn area of Atlanta, information on the 30312 ZIP code where the neighborhood is situated can help illustrate income disparity.
"What stands out is the median household income for Black residents is half what it is for the rest of the ZIP code and also only about half of what it is for Black households in the rest of Georgia," Snyder says. "It looks like the area is changing
but some people are being left behind. The household income for whites is one of the highest in the state while for the Black population it is very low."
He adds that data shows too that the housing cost burden is greater in the 30312 ZIP code and the prevalence of housing choice vouchers,
a federal housing-subsidy program, is four times greater there, as compared with the state broadly.—JULIE MINDA