SALEM — The Salem Mission's expansion plans are temporarily on hold after a state agency did not fund its proposal to convert the former St. Mary's Italian church into apartments for the homeless.
"We were not funded in this round" by the Massachusetts Department of Housing and Community Development, said Mark Cote, the executive director of Lifebridge, the new name for the Salem Mission. The nonprofit agency, which runs the city's homeless shelter on Margin Street, already has 22 apartments for the homeless in two other buildings on the site.
"It appears (the state) made a decision in this round to fund mostly family services and organizations that work with (homeless) families," he said.
The Salem Mission requested $2.9 million to build 20 apartments in the former church.
Although they were turned down, Cote said state officials encouraged the Mission to reapply for a grant. The next funding application rounds are in February and September.
"We are fully intending to reapply," Cote said. "It's just a matter of when."
Meanwhile, Cote said the Salem Mission's board has agreed to entertain a new proposal that would spare the church and add two floors of housing to the shelter building on Margin Street, the former St. Mary's Youth Center.
"Jessica Herbert has developed an alternative plan for building over the Mission center, and she has asked the board to look at it," he said.
Herbert is vice chairwoman of the Salem Historical Commission, which opposes the church project and the removal of its stained-glass windows, and which wrote to the Massachusetts Historical Commission last fall to say that the former church may be eligible for listing on the National Register of Historic Places. In its September letter, the commission also recommended adding floors on top of the shelter.
Asked why she is bringing an alternative plan before the Salem Mission board, Herbert said: "That's what the Historical Commission is all about. In addition to reviewing projects, we take projects that could be made better with more outside input and try to work together with the applicant to find the better solution."
Cote said Herbert will make her proposal at the board's February meeting.


