Landlord removes bathroom access for homeless families nonprofit. Funeral home director Taylor cites utilities costs, disputes over lease and program operation.
For more than three weeks, spanning a stretch of dangerously cold weather, staff and clients of homelessness program New Pathways in Brainerd have been expected to walk more than two blocks to use the bathroom.
The nonprofit organization's new landlord, Tim Taylor of Halvorson-Taylor Funeral and Cremation Care (formerly Halvorson-Johnson), built a wall blocking access to the restrooms New Pathways previously used and advised the tenant to use those at the nearby Holiday Stationstore on South Sixth Street.
Taylor took the action in the midst of a landlord-tenant dispute involving payments toward utilities costs and a number of other disagreements over the nonprofit's use of space and the program's operation. He said the organization's leased space never included the bathrooms and the nonprofit could've easily added its own toilet when it renovated part of the space.
"Nowhere in the lease does it say that they have any usage outside of their square footage," Taylor said in a Feb. 8 phone interview. "They're the ones who decided what they're going to do with plumbing and how they spent their money. ... The fact that they did everything but actually put the (toilet) stool in, I'm not going to be responsible."
Without bathrooms, the organization—the only one offering shelter to homeless adults with children in a six-county area—is at risk of losing its Emergency Solutions Grant funds from the U.S. Department of Housing and Urban Development. Its leaders chose to discontinue accepting new families in need in the midst of the uncertainty surrounding the Brainerd program's home.
"We have to be able to get to the bathrooms," said Pam Streed, the organization's executive director, during a Feb. 1 interview. "We have to have bathrooms. We serve kids."
Taylor became the organization's landlord in November. This occurred as part of a building swap with the First Presbyterian Church—Taylor assumed ownership of the large church building at 512 S. Eighth St., while the church took over one of the funeral home's locations, a smaller space church leadership said was better suited for the congregation size, at 7761 Excelsior Road, Baxter.
New Pathways has occupied a portion of the church building's basement since April 2017, when it was forced to leave its previous space owned by the Brainerd School District due to district plans to tear down the aging structure. Through fundraising efforts, the organization invested approximately $30,000 into its new space to make it appropriate for the intended use as a day center for homeless families. This included the installation of a kitchenette, laundry facilities and a shower.
While the organization's lease specified it would pay the church no more than $200 per month toward the common utilities, the church never collected those funds. After the first year, the amount was to be re-evaluated based on usage, but that never occurred, either.
"We didn't really push the issue as far as expenses," said Mark Ford, the pastor of the Presbyterian church, during a Feb. 1 phone interview. "Churches tend to operate on the principle, if it's not really bugging anybody, we just let it slide. Nobody seemed to be too upset about it."
The organization also occupied about 700 square feet beyond what was specified in the lease, including an employee's office, a family TV and toy room and a room containing computer workstations for clients. These rooms are located along a hallway that eventually leads to a pair of restrooms.
Ford said the space wasn't being used otherwise, and the church did not want to invest in adding bathrooms to the organization's occupied space when there were some available in the basement. "We were trying to see this as a ministry," he said. "We thought it was useful for us to be good stewards of the space."
Pam Oslos, chairwoman of the New Pathways board, said the organization did not consider adding a toilet because as far as they knew, they would have continued access to the ones down the hall, which include two stalls and two urinals.
A possible solution
The church moved out in November of 2018 and Taylor moved in with plans to convert the 47-year-old building to a funeral chapel and add a crematorium. Taylor had already expressed concerns about the nonprofit's compatibility with a funeral home, Streed said, noting he did not want children playing outside during one of the typically somber affairs his business hosts—a concern Streed said the organization understood. Things appeared to become rockier between Streed and Taylor after workers evaluating the building for construction purposes entered New Pathways without warning.
"There was a lot of traffic, there were people coming in here that weren't supposed to. It's supposed to be confidential," Streed said.
Taylor, meanwhile, said the clients of New Pathways were not respecting the funeral home space, either. He provided photos of children congregating at the base of the stairwell outside the organization's space, and said he's been disrupted by yelling occurring downstairs.
"The people that are in that program do not watch their children," Taylor said. "I was up here, I had saws, I had hammers, I had all kinds of stuff, and I could tell you stories that you could write a four-page paper on what's going on here. It's not about the bathrooms. These people do not watch their children. ... And I've talked to the director if not once, three times about it. She blows me off."
Taylor said he was concerned about the children's safety and his potential liability, should someone be injured.
On Nov. 27, Taylor met with Streed and Oslos. An agenda prepared by Taylor listed what he said were breaches of the lease agreement by New Pathways, including the 700 extra square feet it was using. Taylor gave the organization 48 hours to vacate three rooms, adding the locks would be changed after that time. Streed said Taylor indicated plans to lease the space to a new tenant.
The agenda also stated the organization owed $200 for utilities for November and it would need to install its own toilet, since the lease did not include access to bathrooms outside the approximately 3,200 square feet of space.
Streed described the meeting as hostile at its start, as Taylor began with a list of apparent lease breaches. But by the end, she said, things became more cooperative. Streed and Oslos agreed the organization would vacate the rooms Taylor requested, and discussion turned toward Taylor creating a new access point to one of the restrooms.
According to Streed, Taylor offered to construct a new doorway linking the organization's laundry room to the men's room, which would eliminate the required trip past a stairwell leading to an area where funeral guests might be. The bathroom would become gender neutral and would be locked from the outside, Streed said, so it would be for the organization's private use.
Although vacating the rooms was difficult work, she said, the organization met Taylor's deadline. Streed said it was an attempt to be agreeable with the new landlord—even though she argues the lease does not specifically designate which of the rooms and areas within the basement are included in the 3,200 square feet.
Taylor said the lease shouldn't need to indicate the specific rooms, because the organization's space begins at its entrance.
"The church said this is your entrance. This is where your mailbox is. This is where your sign is going to go. So that's where the 3,200 square feet starts, period," Taylor said. "Nowhere does it say they have full access to the building. Nowhere does it say they can walk in anytime, any place and do whatever they want."
Bathroom privileges revoked
Although Taylor indicated the new bathroom access would happen soon, Streed said weeks passed with no new door and no word. Taylor said his priority is the funeral home, not New Pathways, and he was tied up with work on its new location upstairs.
The organization complied with Taylor's request to place signage requiring parents to accompany their children to the bathrooms, and according to Streed, there were no issues. Taylor disputes that claim.
Then, in an email dated Dec. 19, Taylor forwarded a scanned copy of his Brainerd Public Utilities bill. It included charges for services between Nov. 19 and Dec. 10 at both the funeral home location at 703 Oak St.—nearly next door to the church—and the church building. Taylor argued the electrical use during peak times, which is charged to commercial properties at a higher rate, showed the organization should be paying $150 each month toward utilities. He compared the charges for electricity at the "demand" rate between the properties, which he said showed the impact of New Pathways.
"The total (electrical portion of the) bill was $445.92 with us using very very minimal power upstairs," Taylor wrote. "You want to consider shutting down your computers and extra items. Your staff leaves the over head (sic) lights on seven days a week for 8 hours a day."
Streed responded the next day she did not think November was a fair month to use, given the increased activity in the building due to construction and the organization's previous use of the additional square footage. Going forward, that space wouldn't be used, and vacating it meant losing access to an internet connection, reducing the organization's computer use to one machine.
"Our original agreement with the church was to look at incremental cost over what they were using that first year, which is a completely different situation now," Streed wrote. "I am not trying to be difficult, but please understand that at this point I cannot agree to paying the $150 per month. Our next Board meeting is in January, so I could review it with them as well then."
In response the same day, Taylor wrote it was not acceptable for the organization to contribute nothing toward utilities. He again raised the differential between the electricity used at peak times at the church versus his adjacent funeral home, and cited prolific use of lighting and the washer and dryer.
"If paying a ($)150.00 for lights is not exceptable (sic) neither is using the bathrooms you dont pay for. So your choice, pay towards electric, or put your own toilet in," Taylor wrote.
On Jan. 17, Streed wrote Taylor to ask if they paid $150 per month, what the bathroom situation would be moving forward—whether he planned to complete the doorway connecting the laundry room and bathroom, or how it would work should he rent the space between New Pathways and the bathroom to a new tenant.
The same day, Taylor informed Streed of his intentions to install a new wall and door in the hallway, demarcating New Pathways' space from the rest of the basement.
"You don't have to agree to the ($)150.00 per month. You can simply have your people use the Holiday Station effective today. The lease doesn't allow you beyond your allowed space. I can simply put locks on the bathrooms and shut the water supply off to the shower, washer and dryer," Taylor wrote. " ... I am not in business to subsidize your program."
A week later, the door was up, locked and included a typed sign on Taylor's business letterhead: "EFFECTIVE January 23, 2019 bathrooms are not available for New Pathways. Please use Holiday Gas Station."
From Jan. 25-31, temperatures did not rise to double digits in Brainerd, according to the National Weather Service and remained below zero four of those days. The organization served one family during that time and was able to make accommodations allowing them to arrive early and stay late to use bathrooms at area churches, which provide sleeping accommodations for New Pathways clients.
A human resources representative from the Holiday Co. corporate office did not respond to a request for comment on whether Taylor discussed this arrangement with gas station management. Taylor did not provide comment on that matter, either.
Behind the numbers
Taylor said the organization pays $750 per month in rent, but he is losing money by covering the utilities. He provided a bill for Dec. 10, 2018, through Jan. 10, which showed the church building used 26,000 gallons of water during a time he said included very little activity on his part. Total cost for electricity and water at the church building for that time period was $1,083.98.
According to Crow Wing County, the funeral home building at 703 Oak St. contains 6,599 square feet of space above ground. The church building includes 14,749 square feet above ground, not including the basement.
Presbyterian Pastor Mark Ford provided the costs of utilities for the church building from January 2015 through the first week of November 2018, when the congregation vacated the premises. According to a Dispatch analysis of the figures, the church paid a monthly average of $996.18 to Brainerd Public Utilities between January 2015 and March 2017, before New Pathways moved in. From April 2017 through January 2018, including the bill provided by Taylor, the property's utility costs averaged $1,248.08 per month—a difference of $251.90 per month, after New Pathways moved in. The breakdowns of electrical versus water for most months were not available.
Ford said they noticed an increase in water usage, given the church typically used water only on Sundays.
"We knew they were going to be doing laundry and more showers, so it was kind of natural," he said.
Plans in making
A Sept. 7 letter drafted by attorney Daniel B. Greenstein of Bernick Lifson P.A. shows Taylor's plans to make changes to New Pathways' space months before he assumed the lease. Writing to the First Presbyterian Church on behalf of New Pathways, Greenstein addressed Taylor's plans to remove access to the bathrooms and take back some of space occupied by the organization. He proposed such actions would violate a section of the lease governing the usability of the premises.
"Section 22 of the lease provides that in the event the premises become unfit for tenants' use, without any fault or neglect on the part of the tenant, then tenants' liability for rent thereafter and all of the tenants' right to possession of the premises shall cease. From our perspective, that certainly seems to be the case at this property," Greenstein wrote.
Another section of the lease concerning early termination explains the situations in which the landlord would be responsible for contributing a portion of the tenants' construction costs: bankruptcy proceedings, the reorganization or liquidation of either party, or the transfer of ownership to a third party, when the third party does not agree to assume the lease. If any of these events occur with the 13th through 24th months of the lease—the time period in which the lease currently sits—the landlord would be expected to pay 75 percent of the construction costs.
During the Feb. 1 interview, Streed emphasized the organization was willing to contribute toward utilities costs, but its leadership wanted a clearer understanding of the actual impact on electrical usage and more historical data for comparison. She said additional email inquiries directed toward Taylor have been met by silence—the landlord is no longer communicating with New Pathways.
Taylor said he'd prefer to communicate by phone rather than email, but said he is done discussing any of the issues with Streed. He said he'd like to meet with the board, but has not been invited to do so.
"Anything is on the table, but I can't get Pam (Streed) to sit down and talk, because I don't want to talk to her. I want to talk to the board," Taylor said. "She paints it one-sided to save her job. ... The lease is not between me and her, the lease is between my company and their board."
The events of the past few months leaves the organization with decisions to make, Streed said. Evacuating the property would mean abandoning the $30,000 investment made into the building using donor funds. Investing additional funds by installing a toilet also seems a risky prospect, Streed said, given the tenor of the landlord-tenant relationship.
"Why wouldn't we just say, 'This guy doesn't like us.' Why don't we just walk away? I wasn't comfortable doing that, because the community helped us pay for that," Streed said. "That was a lot of money. We haven't even been here two years. That would be a huge amount of money to just walk away from and say, 'We don't like our new landlord, we're just going to leave.' I don't think that's fair to the people who donated."
Taylor said he'd be fine with New Pathways moving out.
"The first line in that lease, says that both parties can break it by mutual agreement, nobody has any problem whatsoever, nobody has to pay a penalty, nothing," he said. "They can leave whenever they want. I'm not going to hold them to a lease. Please leave."
For New Pathways to continue receiving its grant funding from the federal government—a significant portion of its budget—regulations require bathroom accommodations. "Each program participant in the shelter must have access to sanitary facilities that are in proper operating condition, are private, and are adequate for personal cleanliness and the disposal of human waste," the regulation states.
Tom Balsley of the Minnesota Department of Human Services told Streed in an email the funding could be shifted to the organization's Cambridge location, "but our hope is that the bathroom issue can be resolved in the short term while looking for a new Brainerd site in the long term."
Taylor said he offered to give the organization a building he owns in Staples, a former gas station that was previously a home worth $50,000. He said Streed wasn't interested and did not see the property.
Streed said the proposal Taylor made before closing on the property was brought to the board, which hosted a special meeting to discuss it. The property would require a lot of work to make it habitable, she said.
"Our Board ... decided it was important for us to stay in the Brainerd area," Streed wrote in a Feb. 14 email. "Staples would be pretty far out for most of our church partners, so that was a factor as well."
What is New Pathways?
Established in 1995, New Pathways first opened in Cambridge. In 2006, the program expanded first to Little Falls before moving its second location to Brainerd. The Brainerd location serves six counties, although most of the families are from Crow Wing County. It served 31 families between July 2016 and June 2017, including 44 adults and 59 children. Since July 2018, 17 families have been served in Brainerd.
The organization seeks to be an all-encompassing resource for families experiencing homelessness. It aims to provide for all basic needs and the resources necessary to acquire a job and home of one's own: laundry facilities, personal care items, showers, telephone and internet access and transportation. Clients have access to case management as well as skills training, including education on budgeting, parenting, job hunting and healthy living.
Overnight sleeping accommodations and three meals a day are provided to clients through partnerships with churches and volunteers within their congregations. Each week, a different church serves as a host, with volunteers assisting in meal preparation and staying overnight with the families. A dozen churches take turns throughout the year serving as home base, while more than 20 churches throughout the Brainerd lakes area support the program through donations of dollars and supplies.