LYNN – An Atlantic Street rest home is scheduled to reopen as a residence for disabled adults, but the rest home industry is slowly dying, said a local senior care expert, leaving human service agencies with plenty of questions to answer.The 21 women who lived in Atlantic Rest Home were relocated to nursing homes, private residences and other facilities after financial losses prompted the home’s owner, a community not-for-profit organization, to close the 60 Atlantic St. residence.Organization board member David J. Solimine Jr. said the home posted a $35,000 loss in each of the last four years.”We weren’t in a position to sustain that,” Solimine said.Solimine and Elliott Community Human Services President Kate Markarian confirmed Lexington-based Elliott is renovating the home with its mansard roof and big porch columns into a residence for 10 people.”We’re going to be serving disabled adults,” Markarian said.She said Elliott, which also operates a Pleasant Street mental health facility, worked with Ward 4 City Councilor Richard Colucci to map out conditions for Atlantic Rest Home’s reopening in the residential neighborhood bordering Ocean Street.Although Elliott’s plan to lease and operate Atlantic Rest Home did not require council approval, Colucci said agency representatives worked with councilors and area residents to define terms for reopening the home, including abandoning an initial plan that Colucci said involved placing teenagers and young adults in the facility.”They want to be a good neighbor,” Colucci said.It is slated to reopen, but Atlantic is one of two local small rest homes closed, according to Greater Lynn Senior Services Director Paul Crowley, in the last six months. He said the other small home was located on Baker Street.”They have been dying out over the years. The main reason is the amount of funding the (state) Department of Public Health is providing is, frankly, insufficient with ever-increasing costs,” Crowley said.Public Health spokeswoman Anne Roach said “DPH does not have a role in reimbursements.” Solimine formerly owned Atlantic Rest Home but said the community not-for-profit took over ownership several years ago when the facility started losing money.”Unfortunately, these businesses can only operate in the nonprofit world,” he said.The state defines rest homes differently than nursing homes, and Crowley said rest home residents are not always seniors and are often people who can attend to their basic needs but face challenges – often mental illness. Most do not have family members to care for them.About 75 rest homes are listed across Massachusetts on state records, including two homes located near Atlantic Rest Home, the Lynn Home for Elderly Persons and Lynn Shore Rest Home.Crowley said Greater Lynn Senior Services “played an active role” in helping Atlantic’s former residents find new homes.”Folks were already placed before the doors closed,” he said.He said the decline in rest homes poses “a significant problem” that a variety of social service agencies must come together to address. Mental health-related disabilities may be a challenge shared by rest home residents or people who, in the past, would move into a rest home, but finding future homes for these people must involve “taking each case individually.””You have to identify all the available resources,” Crowley said.Solimine said the rest home decline places more demand on nursing facilities, but he said Elliott’s commitment to operate Atlantic Rest Home sets the stage for the facility to continue operating for years to come.”They will have an option to buy the facility. Our hope is to recoup the losses,” he said.