Christ Community pivots from pandemic to $32M Third Street Health Center rehab

Jason Bolton
Memphis Business Journal

Christ Community Health Services Inc. is still very much on the front lines of the local effort to curb COVID-19.

But pre-pandemic, Christ Community was planning a complete rehab of its Third Street Health Center and the shopping center it resides in.

That $32.5 million project could be an anchor for the surrounding community if the organization’s CEO has her way.

Pandemic pivot

In late March, the nonprofit health system launched its first COVID testing site at the Third Street Health Center. Since then, Christ Community health professionals have tested approximately 23,000 people. It now offers testing at six area locations and at its Jackson, Tennessee, location.

Shantelle Leatherwood, Christ Community’s CEO, noted her organization has tested individuals from every ZIP code in Shelby County, as well as those from North Mississippi and Eastern Arkansas and up to Jackson.

Leatherwood called Christ Community’s dual service model — COVID testing and traditional health care services — “the new normal” for the organization.

"Now that we've kind of normalized that, my team is returning our focus to some of our long-term plans," she said.

Revitalization effort

The focus of Christ Community’s leadership has shifted to a larger project on the horizon: A complete renovation of Christ Community’s Third Street Health Center and a rehab of the shopping center it occupies there — and now owns.

Christ Community began operations 25 years ago at the Third Street location.

About a year and a half ago, Christ Community began discussions with property owner Belz Enterprises about the 90,000-square-foot shopping center at 3362 S. Third St.

Cushman & Wakefield/Commercial Advisors assisted in the process of acquiring the property, which was finalized in December 2019. Architectural firm Archimania and general contractor Grinder, Taber & Grinder Inc. are part of the project team, as well.

Plans call for a new 25,000-square-foot health center that would cost an estimated $9.3 million — with a projected January 2022 opening date.

The new health center will include 24 medical exam rooms, four integrated behavioral health rooms, a larger dental practice, and a separate behavioral health and counseling center.

While planning is ongoing for what could be a difficult flu season, Leatherwood is also working to raise money for the new health center.

She said she hopes to raise $2.5 million by the end of September, which is needed to begin the project. Fundraising would continue over the course of construction.

The entire project cost, including work on the adjacent shopping center spaces, is estimated to be $32.5 million.Christ Community has signed on Inspire Church as the first tenant and is starting to have conversations with others to join the project, including social service organizations and non-medical entities. The goal is for the entire former shopping center to be a resource hub for the area.

Financial rehab

When Leatherwood became CEO of Christ Community in early 2017, the prospects of the organization were not so bright.

From 2011-13, the organization sustained operating losses and in 2013, its net assets dipped to a decade low (see interactive chart below).

“I became CEO about three years after … our financial status became very public,” Leatherwood said. “[My] first year and a half, maybe two, focused on our financial position and how to turn that around.”

Prior to her arrival, a sizable increase in grants and donations helped the organization avoid losses in 2014 and 2015. After her arrival, she implemented a focus on productivity, payer mix, having a cash goal, and limiting spending.

The focus on payer mix and changing some rates, including from Medicaid and Medicare, helped stitch up Christ Community’s balance sheet. About 69% of the nonprofit’s revenue comes from patient services rendered, 16% from federal grants for uninsured care given, and the bulk of the rest comes from other contract services. A small portion comes from donations.

But, the pandemic put renewed stress on Christ Community’s system. According to Leatherwood, the prognosis is still positive.

Over the last six months, Christ Community has received about $4 million in additional funds — $3 million of that from the federal Bureau of Primary Health Care.

“We have weathered the storm financially. We've had a significant outpouring of community support because of the COVID-19 testing that we've been able to offer,” Leatherwood said. “We've received funding from the County Commissioners, federal sources, the Community Foundation of Memphis, and some private donors, as well.”