But yesterday, a crane arrived to begin tearing down the old school to make way for permanent housing for homeless men and women.

Eighteen months from now, 79 people battling mental illness or addictions will move into a $25 million, eight-story apartment building.

Five years in development, the project is a collaboration of two nonprofits that work with the homeless: the Bethesda Project and Project H.O.M.E. Dozens of private and public donors have put their money into the effort, from the city of Philadelphia to rock star Jon Bon Jovi.

More than 200 people, including Cardinal Justin Rigali, attended yesterday's unveiling of plans for the residence. It will be named after John and Josephine Connelly, founders of the Connelly Foundation, which also contributed money to the project.

Bon Jovi told those assembled in the alley behind SEPTA headquarters at 13th and Market Streets that the residence illustrated "the power of we."

"Improving the lives of Philadelphia's most vulnerable citizens improves the lives of all its citizens," said Bon Jovi, a major supporter of Project H.O.M.E. who has donated money to four of its recent housing projects.

Other supporters are the U.S. Department of Housing and Urban Development, the Pennsylvania Housing Finance Agency, and the Federal Home Loan Bank of San Francisco.

Joan Dawson McConnon, co-founder of Project H.O.M.E. with Sister Mary Scullion, called the effort "a miracle come true."

The last few years have been "like a roller coaster" in lining up financing, Scullion said. But in the end, she said, not only did the project draw the support of multiple public and private funders, but also the backing of neighbors - from the five-star Loews Hotel to Macy's at the Wanamaker Building and SEPTA.

With so little new construction east of City Hall, the conversion of the vacant building is a positive development for the neighborhood, said Rick Staub, Loews' general manager.

The Rev. Frank Yacobi, St. John's pastor, said he saw homeless men sleeping in the doorways of the old building the night before and had the same thought he had five years ago: "Can't we do better than this?"

Yacobi said that the church was not using the former school and youth center and that in 2004 it had approached Angelo Sgro, executive director of the Bethesda Project, about taking over the site. Sgro reached out to Project H.O.M.E.

The most urgent need seemed obvious to Sgro: permanent housing for the homeless.

The facility will have 24 rooms for formerly homeless men and women working with the Bethesda Project to recover from addictions, and 55 efficiency apartments for homeless people with mental illness working with Project H.O.M.E.

A majority of people living on the streets suffer from mental illness or addictions. The city estimates that 85 percent of them are dealing with one or both.

People with special needs often live on the margins of society and don't always have the ability to live independently, Sgro said. The Connelly residence will have case workers to help tenants. Rents will be subsidized with government money.

"This building is important," Sgro said, "because we are creating desperately needed permanent, supported housing for people with special needs in an area of the city with an abundance of social services, transportation, and social opportunities."