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Developers assure Howard Lake City Council assisted living project is moving forward
Monday, Nov. 5, 2012
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By Jennifer Kotila
Staff Writer

HOWARD LAKE, MN – Despite the fact that all the deadlines for the construction of an assisted living facility in Howard Lake have come and gone, Howard Lake City Council was assured at a special meeting Tuesday that the project is moving forward.

The deadlines were agreed upon by the Howard Lake City Council and Community Asset Foundation Jan. 3 in a memorandum of understanding between the entities.

However, since Nick Haggenmiller took over as city administrator, and has been attempting to understand what is holding the project up, communication has been “irregular at best,” Haggenmiller informed the council and Community Asset Foundation.

Along with setting a timeline for the project, the memorandum of understanding laid out the responsibilities of each party.

The timeline to be followed was:

• submit concept plans to be approved by the city prior to Jan. 15;

• submit site and building plans to the city for approval prior to March 1;

• obtain final site plan approval from the city by April 1;

• execute a redevelopment agreement with the city prior to April 15;

• obtain a preliminary financing commitment for the project prior to April 15; and

• submit building plans for construction prior to April 30.

Haggenmiller set the special meeting with two goals in mind, he said.

First, for the council and the city to receive an informative update about the project.

Second, to open up better communication between Community Asset Foundation and Good Samaritan Society (which Community Asset Foundation is partnering with for the project), and the city.

“This project is important to a lot of people,” Haggenmiller said.

He noted that it was important to keep the council and city informed about what was going on, and what obstacles are faced, so it could keep the citizens informed, and maybe help in some situations.

Community Asset Foundation founder Bob Roepke offered an explanation, as well as an update regarding the Howard Lake assisted living project.

“I appreciate the concern you have of what is going on,” Roepke said, noting that, when first approached, former City Administrator Kelly Hinnenkamp and the city made it clear that it was important to them that the project be completed with the cooperation and collaboration of Good Samaritan Society (GSS).

“To that end, we have developed a partnership with GSS,” Roepke said.

When the partnership was formed, GSS informed Community Asset Foundation that most of its assets were going towards major projects, and they were unable to work on smaller projects in more rural areas, Roepke said.

However, GSS was open to a partnership with Community Asset Foundation in moving some of those projects forward, he added.

After meeting with Regional Director Dan Hanson and others from GSS, and creating the Community Asset Foundation, the two entities crafted a partnership, Roepke said.

GSS identified several projects throughout Minnesota it would like to move forward, specifically, assisted living facilities in Howard Lake, Mountain Lake, and Winthrop.

After Community Asset Foundation completed the building of the projects, GSS would operate and manage the facilities.

In securing financing for the projects through Piper Jaffray, Roepke noted Mountain Lake and Winthrop were more easily financed because they were replacing other facilities, and investors knew the need was already there, Roepke said.

However, for Howard Lake, Piper Jaffray wanted a stronger market study before putting together a package to present to financers, Roepke noted.

Additional information has been requested, which is why the process has taken so long, he added.

“The goal remains to move the Howard Lake project forward for spring construction,” Roepke said, noting the challenges which have been, and still have to be, overcome.

The original market study for the facility was a bit lean, and the demand was not as strong as financers would like to see, Roepke said.

Working with GSS, Community Asset Foundation was able to identify a market demand Piper Jaffray was more comfortable presenting to financers.

Piper Jaffray needs a package that is favorable to the banks, especially coming out of a recession where people who may want to move into assisted living have difficulty selling their homes, Roepke noted

At this time, GSS is completing a management analysis demonstrating what an assisted living facility would mean for the current skilled nursing facility.

“We are satisfying Piper Jaffray’s requests to put together a saleable presentation for the banks,” Roepke noted. “They say they believe in the project, and believe it will be saleable, they just need more information.”

After Roepke was finished offering his explanations for why the project is taking so long, council members asked several questions of him.

Council Member Pete Zimmerman noted that part of the hold-up was because the scope of the project changed to include a skilled nursing facility.

“But that’s not what we were looking for,” he added. “We only wanted the assisted living facility.”

He pointed out that the city and Community Asset Foundation had a memorandum of understanding in which none of the deadlines were met.

Roepke pointed out that when GSS was approached with the idea, it wanted to explore the option of a whole campus at the site.

“If GSS wanted to build a new skilled nursing facility, we supported that, thought it was a good idea,” Roepke said.

Although he agreed, Zimmerman said, “But now, it’s a whole year later, and nothing’s been done. This held up the project for more than a year.”

Mayor Rick Lammers asked if planning for the facilities in Mountain Lake and Winthrop began at the same time as planning for the Howard Lake facility.

“Once we introduced you (Community Asset Foundation and GSS) and you start talking, now their facilities are moving forward, and our’s is taking a backseat,” Lammers said.

He noted the original plan was to move Howard Lake’s plans forward last spring for construction to begin in July; then, Howard Lake was told it would happen in the fall; and now, it is being told not until next spring.

“We needed to spend some extra time and take a second look at the project,” Roepke said, noting he could not force GSS to make a decision.

The financing of the Howard Lake project has always been a challenge, Roepke added.

“The stronger the bank feels about a project, the more likely it is to be financed,” Roepke said, noting the information that many community members are interested in the project is new and encouraging.

“Maybe if there was better communication early on, you would have known the support is there,” Zimmerman said. “We’ve known since day one.”

Hanson (GSS regional director) noted it was the fault of GSS that the project was delayed, because it wanted to explore the possibility of including a skilled nursing facility now, rather than adding it at a later date.

In stressing the need for communication, Haggenmiller said the last update he received, Piper Jaffray only needed to complete an appraisal.

Now, the city is being told Piper Jaffray also asked for additional information, but Community Asset Foundation did not inform the city, he added.

“An appraisal has not been completed for Howard Lake, it still needs to be ordered,” Roepke said. “Nick, we have talked a number of times, and I have shared information with you about what Piper Jaffray wants.”

Roepke told the council he has no reason to keep information from them, and Community Asset Foundation will do its best to keep the council informed from now on.

“If we fail to communicate, we simply fail,” Haggenmiller said.

It was agreed that Laura Rindfleisch, the director of GSS-Howard Lake, would assist in communicating with the city about the progress of the project.

At this time, a new market study has been completed for the assisted living facility, the management analysis requested by Piper Jaffray was completed Friday afternoon, and an appraisal has not yet been ordered.

“This project is more complicated than the other two,” Hanson said, noting a business is being built from scratch, which is always seen as a bigger risk.

“We just need to move forward from this point and hope for the best,” Zimmerman said.

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