HomeMy WebLinkAbout2.A. Senior Housing Update 4 ROSENIOUN1T EXECUTIVE SUMMARY
CITY COUNCIL
City Council Work Session Date: August 15, 2012
AGENDA ITEM: Senior Housing Update AGENDA SECTION:
Discussion
PREPARED BY: Kim Lindquist, Community Development AGy NO.
Director
ATTACHMENTS: August 6, 2012 letter from William APPROVED BY:
Stoddard, Doran Development, August 9,
2012 letter from William Stoddard, Doran
Development p�
RECOMMENDED ACTION: Discuss and Provide Staff Direction
ISSUE
At the Council's work session in July, it was decided to begin discussions with Doran Development
about developing the senior housing project on the Steeple Center site. Staff met with Bill Stoddard of
Doran since that time to discuss timing, project scope, and economics of the project. The general
parameters of the project had not changed from that of the RFQ or what has been conveyed to the
Council previously.
One issue that arose in the discussions is that the Doran group requested the land necessary for the
senior housing portion be conveyed for $1. Staff indicated that the City is bringing a lot to the table;
grants, school building demo, any environmental remediation, and enhanced public spaces that would
benefit the senior housing residents that the City expected some compensation for the land
dedication. It was explained that the City was interested in having the same contractor construct both
the senior housing and the senior center (assuming cost savings for mobilization and coordination)
and the City would pay cash for the senior center. However the financial arrangement had not been
agreed to previously with Mr. Trucker, and the City would expect some reduction in overall cost of
the senior center construction based upon our contributions to the project noted above. In light of the
fact that Doran wanted the land for free, staff requested they submit a formal request which could be
brought to the Council for discussion. It was suggested that information be provided indicating what
offsets would be gained by the City which could compensate for giving away the land.
On Monday August 6, staff received a letter from Bill Stoddard, Doran VP of Development
requesting a development agreement reflecting the proposal below or purchase agreement for the land
prior to expending large amount of money designing the facility. The letter proposal is summed up
below:
• Doran Companies will develop a senior housing complex with 80 to 92 units which will be a
combination of independent living, assisted living, memory care and possibly care suites.
• Doran Companies would be the owner of the senior housing which will include resident
amenities such as cafe, library, theatre, marketplace and pub.
• Doran would obtain a site survey, updated market study, and pay design fees for the senior
housing and senior center project.
• Doran Companies would own and operate the senior center and include health and wellness,
occupational therapy and rehab (including facilities such as a pool and fitness equipment).
They may offer memberships to the public.
• Doran Companies would program the private senior center and perhaps the Steeple Center.
• Doran Companies would pay for parking on -site that could be shared with the Steeple Center.
• Doran Companies would pay taxes on the senior housing and senior center as they would be
privately owned.
• The City would provide the land for free to Doran Companies to permit construction of
senior housing and senior center.
• The City would demolish the school addition and address any environmental concerns on the
property.
• The City would contribute $1,000,000 to the private senior center.
• The City would reimburse Doran up to $200,000 for site stormwater and rain gardens.
• The City would reimburse Doran up to $95,000 for burying electrical wiring and street lights.
• The City would reimburse Doran up to $70,000 for installing public sidewalks.
• The City would reimburse Doran up to $7,500 for benches and sidewalks within the plaza.
• The City would reimburse Doran up to $17,500 for the plaza.
In total, the proposal anticipates the City would pay approximately $1,500,000 (based upon the Doran
calculation for land costs and other expenses) for providing the private senior housing and private
senior center on the site.
There are two main issues associated with the proposal outlined above and in the August 6, 2012
letter. The first is the amount of money requested by the developer. At this point the City would be
spending 1.5 million to entice private development on the site. Further, there is very little information
about the project making it difficult to commit the expenditure of these funds at this time. When the
City entered into the Development Contract regarding Waterford, the city had significantly more
information to base its decision upon. The final development contract, where there was commitment
of payment, included a site plan and building elevation, the developers pro forma, TIF qualifying
reimbursables, and the minimum site improvements were identified; 12,000 square feet of office retail
space and no more than 110 rental housing units. Currently, there is not enough information about the
project size, density, site plan, building design and architecture, number of units and type to base a
thorough development agreement on. Staff would be uncomfortable negotiating an agreement when
so little information is available to determine if the developers vision and execution will be consistent
with the goals and desires of the City Council.
Secondly, and more importantly, the proposal before the Council is inconsistent with the stated goals
of the Council and the previously distributed RFQ. Part of the anticipated project is to have a public
senior center that would allow programming for city seniors but could also be used for other
community groups such as RAAC. It was envisioned that the senior center could complement
programming for the Steeple Center and would address previously stated concerns by the Rosemount
Senior Group that they want their own space outside of the Community Center. The proposal to
privatize the center and introduce a fitness center and rehab facility are inconsistent with direction
stated for the senior center. The idea of selling memberships is inconsistent with the goal of the center
as a space for the seniors, and other community groups, to gather at leisure and also provide some
structured programming. In the end, the City would not receive a public senior center but would have
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expended the funds reserved for that use.
It is unclear if the developer believes this proposal is the only financially viable plan to obtain a senior
housing project of the caliber they desire. Staff had a preliminary conversation with the developer
indicating the above concerns, so they are aware of the inconsistency between their plan and the RFQ
and stated Council goals. It is staff's understanding that Doran will have additional internal discussions
which might provide additional information for the Council discussion. Staff will provide any
additional updates at the meeting.
On August 9, 2012 staff received another letter from Bill Stoddard further articulating their intentions
regarding the senior housing project and the senior center. He notes that the ownership of the senior
center is not the primary concern but rather the amenities available in the Center. Additional
information is needed for the Council to make an informed decision about the proposal and how that
impacts the site and the financial investment for the community. Based upon the letter, Doran
representatives will be a the Wednesday meeting.
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August 6, 2012
Ms. Kim Lindquist
Dwight Johnson
City of Rosemount
2875 145 Street
Rosemount, MN 55068
RE: City of Rosemount
Senior Housing Project
Letter of Understanding
Dear Ms. Lindquist
It was a pleasure meeting with you, Dwight, and Dan last week to discuss our involvement in developing
a wonderful senior housing project on the former St. Joseph School site you own. We have been rather
busy preparing financial models, interviewing architects and more importantly learning and researching
various models of senior, wellness & senior fitness centers that work in tandem with senior housing.
At this time we request exclusive development rights in the form of a developer's agreement or purchase
agreement for the land on which the senior housing portion of the proposed facility would be located prior
to us expending large amounts of money designing the facility. In addition you mentioned that you were
looking for about a $200,000.00 discount for our services on the senior center to build it. Instead we
would like to form a joint venture with you on the senior /multi - generational center in which you would
help us design it, give input on the programming we offer at it, and contribute about $1,000,000.00 to the
development of it. We would build, own and operate it with your input. We feel it is an integral part of
the success of the senior housing portion, may need to include wellness and rehabilitation/therapy
equipment, a swimming/wellness pool, and other items leading to both a larger and costlier center than
your budget allows.
In Summary, the agreement would spell out the following items not limited to:
1) Doran Companies (Doran) intends to develop, design, build and operate an upscale senior living
facility on the Steeple Center vacant property to consist of about 80 -92 units. Units to include
independent living, assisted living, memory care and possibly care suites. Doran will submit
under a PUD format to the City for the development governed by the Cities Downtown (DT)
zoning district;
2) The senior living portion owned by us will include amenities such as a bistro /cafe, WiFi access
and internet cafe, library, pub, theatre, activities areas, business center, sundries marketplace, and
saloon spa;
3) Doran will be financially responsible for obtaining a site survey, updated Maxfield demand
estimate, and outside architecture team for this project;
4) The City of Rosemount (City) has relocated the MERC gas substation and the County has
performed a Phase I and II environmental assessment. The City will convey property to Doran
that is free from contamination, demolish the school addition and remove asbestos or other
hazardous material, and financially manage any other environmentally needs if any;
5) The City will reimburse Doran up to $200,000.00 for rain gardens and stormwater treatment
under the parking lot from the LCDA Development Grant (LCDA Grant);
6) The City will reimburse Doran a (yet to be determined sum) for burying electrical wiring from the
$95,000.00 LCDA Grant if any funds are left over after the City is first reimbursed from that
portion of the Grant for the City's expenses from "Street Lights and burying electrical wiring;"
7) The City will reimburse Doran up to $70,000.00 for installing public sidewalks from the LCDA
Grant;
8) The City will reimburse Doran up to $7,500.00 for Benches and sidewalks within plaza from the
LCDA Grant; and
9) The City will reimburse Doran up to $17,500.00 for the Plaza between the senior housing, senior
center, Robert Trail library, and Steeple Center.
Senior Center/Multi- Generational Center
We believe a successful community your size needs to offer services beyond just activities in the senior
center and needs to include health and wellness, occupational therapy and rehab. It could possibly offer
memberships to the public. One example is the Knute Nelson Wellness Center in Alexandria, MN which
is connected to senior living, has a small pool and has about 700 members using their facility. We
understand Rosemount desires a YMCA in town. We believe it could take ten years or so before
something like that materializes and wish to offer some of those amenities in conjunction with our senior
housing.
Key Points for the City to Consider
The area of the private senior housing and senior /multi - generational center owned by Doran would be
now added to the tax base compared to the previous St. Joseph School which was not;
The current tax base of the overall site may increase by about $12,000,000.00 to 16,000,000;
More shared parking paid for by Doran will serve the public Steeple Center;
A public plaza will be constructed behind the Steeple center;
We will pay for the site survey, updated Maxfield report and architectural and engineering services for
both the senior living and senior center;
Our Activities Director can schedule and program numerous events in the senior center and Steeple
Center (with City input) reducing the manpower needed by the city; and
This development will be a focal point for generations to come. One in which the City, residents and
surrounding communities will be proud of.
Land Market Value and Conveyance
The existing taxable land basis from the six existing PIDs is $362,100.00. We estimate that the senior
housing portion takes 59.5, say 60% of the total Steeple Center land if we divided it down the current
proposed parking lot. We therefore believe the market land price for us would be around $217,260.00
($362,100.00 X .6). We do not feel it makes sense for us to trade money with you considering we would
build the senior center. Therefore for consideration of the above Key Points we propose the city to
convey the private portion of the land to Doran for $1.00(replatting fees by Doran). Please note that
while we will pay for the surface parking that 20 -30 spots or so will be utilized by the senior center and
Steeple Center requiring us to construct expensive underground parking. Underground parking can cost
about $65.00/sf and we have budgeted about $1,000,000.00 for this added cost to us due to the small site
and shared parking with the City.
Other Senior Center Ownership Models and Thoughts
We believe the design and integration of the senior center with the senior housing is of utmost
importance. If the City shares our beliefs and design needs we feel this project is headed for success. We
will incorporate many of the items from your "Space Needs" breakdown for the senior center furnished to
us by the City. We would then under this model operate it with the Cities input, encourage the public to
use it (offer memberships), and additional land would be added to the Tax Base.
We at Doran Companies are excited to be a part of something special in Rosemount. It is now time to
make the critical decisions so we can go off to the race tracks with you on this.
Sincerely,
William J. Stoddard
Vice President of Development
Doran Development, LLC
(952) 288 -2047
bill @dorancompanies.com
www.dorancompanies.com
Cc: Rosemount City Council
Dwight Johnson
Dan Schultz
File: Rosemount letter of understanding
August 9, 2012
Ms. Kim Lindquist
Dwight Johnson
City of Rosemount
2875 145 Street
Rosemount, MN 55068
RE: City of Rosemount
Senior Housing Project
Senior Center Wellness Component
Dear Ms. Lindquist
Per our recent conversation since our letter of August 6 we are sending this supplement and desire both to
be forwarded to the City Council in regards to the Senior Housing and Senior /Multi- Generational Center
we are proposing to develop in Rosemount. We would very much like a chance to discuss it at your
upcoming Work Session meeting this next Wednesday August 15
To clarify, we do not care who "owns" the Senior Center." We also respect the offerings you wish to
have there including crafts, coffee, computers and meeting rooms. We do care about the other amenities
it can offer residents as extensive research with architects, senior housing owners and vibrant Senior
Center models show us that seniors desire wellness programs and will use them when available. Wellness
has evolved to be more than just fitness equipment rooms and may include aerobic and Pilates programs,
therapy components, rehab areas, and even pools with water aerobics. We were under the impression you
may not want to be constructing a pool at your Center and have roughly a budget of $1,000,000.00 for the
Senior Center. That is why we recently offered as an option for Doran Companies to develop, own and
operate it with the City reimbursing us your budget amount to help us equip it.
In addition to the Alexandria, MN example I previously mentioned, Willmar, MN is another example of a
City offering such amenities and enlisted about 400 new members in less than three months when opened.
Only a block away from that Senior Center is a new YMCA which does not compete with it as the water
temperatures and other amenities are more geared to seniors at the Senior Center. Their $25.00 /month
membership fee is offset by insurance reimbursing residents $15.00 /month. We believe the Senior Center
should have free availability for most of your described uses, and possibly could have a paying
component for Wellness programs. Regardless, some type of joint venture /mutual programming and
understanding needs to be developed for this component.
In addition to the above we would like to reach an understanding with the City on the land, City
responsibilities and questions of which LCDA Grant reimbursements are available as addressed in our
earlier letter.
To summarize, recent meetings included five design firms including WAI Continuum, ESG Architects,
Kaas Wilson Architects, Pope Architects, and DSGW. These firms have been designing recent senior
living communities some with wellness components. Those interviews along with other meetings with
senior living stakeholders helped us formulate our strong opinions on the amenities we believe to be
important to seniors of today and for the future.
We look forward to meeting with you on Wednesday.
Sincerely,
William J. Stoddard
Vice President of Development
Doran Development, LLC
(952) 288 -2047
bill @dorancompanies.com
www.dorancompanies.com
Cc: Rosemount City Council
Dan Schultz
File: Rosemount wellness It