Small Church Meets Big Post-Hurricane Housing Need

By Kirk Petersen

When priests find themselves doing some unpriestly project or task, some of them have been known to say: “I didn’t learn about this at seminary.”

The Rev. Debra Maconaughey graduated from Virginia Theological Seminary, where she learned many things. Among the things she did not learn there is how to develop an apartment complex.

Maconaughey is the rector of St. Columba Episcopal Church in Marathon, Florida, a town of 8,600 which is more or less in the middle of the Florida Keys. The Keys are a fragile ribbon of islands extending more than 100 miles from the southern tip of Florida toward the Gulf of Mexico.

Before construction started

In September 2017, Hurricane Irma plowed right through the center of the Keys after causing catastrophic damage in the Caribbean Sea. St. Columba was spared serious damage, and more than 100 people found shelter there for weeks after the hurricane. But much of the town was devastated.

After the initial crisis passed, Maconaughey and her flock realized that recovery was going to take years, not months. Two years out, she estimates that Marathon is about 50 percent recovered, and other parts of the Keys perhaps 75 percent.

Before Irma, “workforce housing was already a problem, and so much of the workforce housing was just destroyed,” Maconaughey said. This has hampered the economy and the recovery. “If you go to a store, the line’s going to be really long, because there’s only one employee.” The others have had to move away.

“Houses are still standing, and they need to be demolished. There are many vacant lots where houses were standing, and they’ve been demolished, and they’re waiting either to get permits or figure out how to pay for rebuilding.”

The church started by buying or renting 22 trailer homes to provide temporary shelter. “We have people in our parish still living in trailers in their driveway,” she said.

They set their sights on something more permanent. “We want to be able to offer to people in our community [whose] places were destroyed, a place to get their feet on solid ground.”

They found a 16-unit apartment complex a mile from the church where the interiors had been destroyed, but the concrete walls were still structurally sound.

“It was on the market for $1.75 million – that’s more than $100,000 per unit” for not-yet-gutted shells, said Bailey Dotson, a parishioner.

Dotson is kind of the opposite of Maconaughey – he’s never been to seminary, but he does know a thing or two about developing apartments. “My background is real estate development – I’ve built several thousand apartments” before retiring to Marathon, he said.

The Florida Keys have complicated restrictions on how much housing can be built – reflecting the fact that the only evacuation route is the Overseas Highway that connects the Keys. But because the apartment complex had been destroyed, the owner automatically had building rights for a similar number of units elsewhere.

“Those grandfathered rights are worth about $40 to $50 thousand per unit on the open market,” Dotson said. The church offered to let the owner keep those rights and subtract the value from the purchase price.

“So from a million-seven we ultimately got the price down to less than a million dollars,” Dotson said. The owner also agreed to take $500,000 down and carry the remainder as a loan, with the church paying interest only for five years. “It made it possible for us to do the deal,” he said. The church will get a few years of cash flow from the apartments before having to refinance the loan.

Once the property was purchased, the church still faced the need to spend most of a million dollars to make the units livable again. Episcopal Relief & Development “kicked in $400,000,” Dotson said, and the rest has been raised from parishioners and loans.

A new thrift shop facing the highway

The interior demolition work was done primarily by volunteers, “with tons of sweat equity,” Maconaughey said. The construction work is under way, and they hope to have tenants moving in by February 2020.

The 16 one-bedroom units initially will be available only to people with jobs in Marathon whose homes were destroyed in the hurricane – a pool of potential tenants that will be more than large enough to fill the four buildings of apartments. Another small building facing the Overseas Highway will become a thrift shop operated by the church.

“We are planning for $900 a month rent – unheard of down here,” Maconaughey said., an online real estate service, shows four one-bedroom apartments available in Marathon as of late November, with rents ranging from $1,400 to $3,000. At the high end of the market, sale prices for single-family waterfront estates top out at $15 million.

Maconaughey’s bishop, the Rt. Rev. Peter Eaton of the Diocese of Southeast Florida, is a big fan of the project.  He described it as “an extraordinary story of how a parish, which a decade ago was slated to be closed, has recovered over these ten years to such an extent that it has purchased and renovated an apartment building in the neighborhood to provide essential affordable workforce housing.”

Parochial report data indicate St. Columba has an average Sunday attendance of a little more than 80, and plate and pledge income of about $170,000. “It’s a little church, but it’s doing big things,” said Marilou Dotson, Bailey’s wife, who has been managing all of the paperwork for the project. Maconaughey said the church plans to hire a professional management company for the long haul.

“Fortunately, we had a lot of very sophisticated folks, who were able to put that kind of a deal together,” Bailey Dotson said. In addition to the Dotsons, the church committee also includes an architect, and “a guy who’s very knowledgeable in commercial properties.”

And they had faith. “We believe everything comes from the Eucharist. We believe God makes the table bigger,” Maconaughey said. “We believe clearly and strongly that we need to be the light of Christ to the world.”

She learned about that at seminary.


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