Whittier Alliance to join effort to block Lydia House

The Whittier Alliance has voted to support a lawsuit trying to block Lydia House, a controversial supportive- housing program. The move allows people to donate money to the Alliance, a non-profit neighborhood organization, dedicate it for the lawsuit, and get a tax deduction.

It is the latest twist in the legal battle that pits neighbors who feel their neighborhood is already swamped with supportive housing against a church group trying to do its part to develop affordable supportive housing.

The Plymouth Church Neighborhood Foundation bought the old LaSalle nursing home, 1920 LaSalle, and plans to convert it to Lydia House, 40 efficiency apartments for people who are recently homeless. It will have on-site support services, like job and life skills counseling for those with mental illness, chemical dependency and HIV.

Both the foundation and those who oppose Lydia House are trying to raise money for the coming court case.

"We are assuming the legal expenses could be in excess of $50,000," said Linda Satorius, the Plymouth church foundation’s executive director. The foundation has requested financial help to cover court costs from several sources, but she did not want to discuss them until they were approved.

A group called Citizens for a Balanced City, which includes several members of the Whittier Alliance, filed suit in district court to try to force Minneapolis to enforce its own rule — that supportive-housing programs need to be spaced at least a quarter-mile apart.

Enforcing the ordinance would block Lydia House, since it would be located too near a number of other supportive-housing programs in the Stevens Square and Whittier neighborhoods.

The foundation successfully transferred the suit to federal court. The case will hinge on the interpretation of the federal Fair Housing Act amendments, said Mary Yaeger, the foundation’s attorney, so it belongs in federal court.

The foundation argued — and the City Council agreed — that enforcing the spacing requirement would discriminate against disabled people who could benefit from Lydia House.

The Whittier Alliance’s vote to collect money for the lawsuit passed 9-5, but stirred disagreement.

"There are some things I don’t agree with what the Citizens for a Balanced City are doing," said Board Member David Harstad, noting the group’s Sunday protests outside Plymouth Congregational Church.

"The red-hot rhetoric against the church has turned me off," he said. "This isn’t about picketing little old ladies going to church. This is about bureaucrats downtown."

Others said the lawsuit went to the mission of the neighborhood association.

Tom Berthiaume, head of the Nicollet Business Association, an Alliance board member and a named complainant in the lawsuit, said: "There is no more important issue for the future of our neighborhood."

The lawsuit would not affect work on Lydia House, Satorius said. The foundation sent letters to various neighborhood groups seeking names of community members to sit on the Lydia House Advisory Group.

The foundation plans to begin tearing down interior walls in the spring and renovate this summer, Satorius said. It will start a capital campaign in the first half of the year.

Developer’s fee questioned John Cevette, a principal player in Citizens for a Balanced City and a Whittier Alliance board member, has criticized the foundation’s planned developer’s fee, saying the foundation is getting more than it is giving.

The Lydia House budget is $5.4 million, including a $500,000 developer’s fee for the foundation, according to a funding request sent to the Minneapolis Public Housing Authority. The foundation listed its contribution at $119,000 (recently increased to $200,000, Satorius said).

The rest of the proposed revenue for Lydia House would come from federal, state and local government sources, the budget said.

"Charity involves giving, not taking," Cevette said. "The $500,000 payment to Plymouth stands charity on its head.

It looks like it’s all about real estate, not real charity."

Satorius said the developer’s fee covers any contingencies not planned for in the budget. "There are expenses all along that are not reimbursable by our funders — consultants that help us develop the plan and the project."

The developer’s fee could help fill gaps if funding applications fall through, she said. Unspent money would go to an operating reserve for Lydia House’s support services.

"We have no intentions to make a profit off of this," Satorius said. "We want to make sure it is the best run, best managed building it can be."

Tom Fulton, president of the Family Housing Fund and chair of the Community Shelter Board, said development fees are common practice.

He said that if anything is driving up the cost and has required more development fees, "it has been the time and expense incurred in dealing with the opposition from a few neighbors."

Meeting the targets If the Citizens for a Balanced City lawsuit succeeded, Fulton said, "It would be a tremendous setback."

Minneapolis and Hennepin County have agreed to five-year housing goals, including the creation of 1,850 Single Room Occupancy units, he said. Half of those are to be supportive housing — like Lydia House: "It is exactly the kind of development envisioned in the plan."

He supports giving people more choice for housing locations, including more affluent neighborhoods, Fulton said.

"We are passionate about creating more locational choice," he said. "It doesn’t mean we don’t need to increase the supply of affordable housing everywhere. You don’t create choice by stopping good projects like Lydia House. All you wind up with is more homeless people."

To meet the housing goals, the city and county need help from the private sector and from faith communities, he said.

"We very much regret when an entity like Plymouth Church steps forward — and is willing to share this responsibility with the public sector — that they would have to contend with such opposition."