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FCC drops apartment plans

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The Friends Care Community Board of Trustees announced last week that the care center has withdrawn its proposal for a new senior apartment building downtown, according to a letter board president Mary White sent to community members. After more than two years studying the market and drawing up the plans, the board decided that to finance the project would put undue pressure on the rest of the care center’s operations. The center will return the Barr property to the Morgan Family Foundation, which had donated the lot to the FCC, and pursue a smaller renovation project on the East Herman Street campus, including a community exercise room, White said in an interview on Sunday.

“The board realized that this was a very important project for many people who hoped to live in these apartments, and it was an incredibly generous donation from the Morgan Family Foundation,” she said. “We’re just very sorry that we couldn’t follow through with this in a way that worked.”

Friends received approval from the Village in spring 2009 to build a three-story senior apartment building and parking lot on the corner of Xenia Avenue and Limestone Street. The facility was to include 30 one- and two-bedroom units, priced to rent for no higher than $650 and $850, respectively. The original $2.8 million estimate for the building rose to $3.7 million after the board attempted to bring the building up to an energy-efficiency standard known as a passive house, which would have been the first commercial passive building in the country. The care center also conducted studies by consultants that showed a solid need for senior housing in the Yellow Springs and Miami Valley area. The center invested over $300,000 in architectural design and engineering studies to insure “attractive, centrally located, affordable and energy efficient senior apartments,” according to the letter.

But the numbers did not work out. The construction costs, even without the energy efficient materials, were much higher than could be supported by the revenue the building was expected to generate through rent, White said.

“Either way, we were short $1–$2 million,” she said.

The financing formula meant that Friends could only get a loan for part of the cost and would have to raise funds to cover the balance, which the board did not feel was possible in the current economy. In addition, according to White, the housing crisis that caused home sales to plummet across the country also made it difficult for those local seniors wanting to sell their homes in the village to move into the apartment building.

Friends considered many alternatives to abandoning the apartments, which its leaders looked at as part of its mission, White said. Friends could have raised the rent on the units, but the board felt that keeping the space affordable was essential to its mission. None of the options were strong enough to warrant the risk that putting up an unsustainable building would pose for the current campus, White said. While the independent and assisted living centers currently generate a little more revenue than it takes to support them, the past six years of stagnant Medicaid reimbursement from the state has made it more difficult to keep the skilled nursing center “in the black,” White said.

“There has been no Medicaid rate increase in six years, despite the fact that the cost of care keeps going up,” she said. “The assisted living and independent living units might help cover the cost of the skilled nursing unit, but if we lose money on the apartments when we’re already having trouble breaking even on the main campus — it’s too delicate of a balance.”

On the other hand, she said, a new rehabilitation center on the main campus promises to offer a more consistent revenue stream. Friends Care Director Karl Zalar declined to comment on the cost and formative plans for the addition. But the Village Planning Commission, which considered the plans last week for a possible conditional use permit, described the proposal as a renovation of the existing skilled nursing center to create 16 private rooms, mainly for temporary stay and recovering patients. The addition would not increase the total number of beds on the campus, but it would increase the size of the facility and the parking needed to accommodate it, according to a Village memo.

The rehabilitation center has the capacity to generate a steadier stream of revenue for Friends because Medicaid would reimburse the center for limited-term patients. Part of the revenue would be used to supplement the needs of other patients at the center without raising costs for long-term patients, White said.

In addition, the rehabilitation center would include a separate building with an exercise room that Friends would make available to the wider community. Friends expects to have more details on the renovation plans in the next several weeks, Zalar said.

The Friends board was disappointed that it couldn’t execute the plans for the apartment building and take advantage of “a number of very generous donations” from the community, White said. But much of the project was outside their control.

“This project was really thrown for a loop with the economy, and that we couldn’t anticipate,” she said.

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