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Home My WebLink About[06] Fortitude Senior Living April 14, 2016 Ms.Judy Weyrens 25 College Ave N PO Box 668 St.loseph, MN 56374 Dear Ms.Weyrens, Thanks for taking the time the other day to meet with me regarding my recent land purchase in Graceview Estates. We will be proposing a 45 unit senior living apartment building in which 10 apartments will be dedicated to seniors that do not have the financiat means to pay privately. We believe that seniors should be allowed to age in place regardless of their financial means. ft's hard to ask a senior to pay privately and then down spend their assets and ask them to leave. Many financial models have been created on this project and in order to make it financially feasible as possible we are requesting that the city and county consider a 25 year TIF district for the project. 7his will help keep low income individuals living on our building through elderly waiver and group residential housing programs. It will allow our customers to age in place even when they run out of private pay funds, which is part of our mission. The overall project cost will be between 5.5 to 6.5 million dollars. Construction will begin in early July 2016 and be completed within 10 months. I have included the TIF application along with the financial modeling. Feel free to contact me directly with any questions at 651-343-5239. Sincerely, Tom Opatz PartnerjOwner Fortitude Senior Living of St.Joseph, LLC �ww.ciq'is{sejosrph rom Cl� 01 IJ�. Joseph . �li'Y C?F ST. JOSEPH TIF/Tax Abatement Application APPLICANT INFORMATION: Business Name: Fortitude Senior Living of Saint Joseph LLC Limited Liability Company Date:4-12-16 Business Address:410 Luella Street Watkins MN 55389 Business Type: Corporation Sole Proprietorship_X_LLC Partnership Please Select: X New Business X-Existing Business #of Years of Business: 3 years as owners,over 20 plus years senior housing/skilled nursing home experience Contact Person/Authorized Representative Tom Opatz Title:partnerfprincipal Daytime Phone: 651-343-5239 Email: tom.opatz@hilltophealthcc.com Business Legal Counsel: Igor Lenzner Phone: 320-656-3517 Legal Counsel Address: 1015 W St.Germain, St.Cloud,MN 56301 INFORMATION ON PROPERTY OWNER(if different from Applicant): Legal Name of Property Owner: Tom A.Opatz and Fred Struzyk Address: 410 Luella Street,Watkins,MN 55389 Telephone: 320-?64-2300 Email:tom.opatz@hilltophealth cc.com fred.struzyk @hilltophealthcc.com PROJECT INFORMATION: Project Description: We are proposing a three story 45 unit senior housing facility which will be roughly 40,000 square feet in size. The apartment units will have full kitchens,private baths, and range in size from 400-1100 square feet per apartment. Residents will be able to choose the services they want and when they want them.These services will include such items as providing: medication set-up,medication administration, assistance with bathing,assistance with transportation,twenty-four(24)hour on-site nursing staff,assistance with grooming, coordinating daily activities such as card games,casino,etc. The design will allow seniors to age in place,meaning they move into an apartment and we will bring needed services to them as they age. Three(3)meals a day and snacks will be offered,along with activities within the community of Saint Joseph. Project Address: TBD(Graceview Estates Outlot A) Parcel Identification Number: 84.53533.0106 [26468-0001 f 2298461/1] St.Joseph TIF/AbatementApplication Page�1 Legal Description(may be attached instead of listed): OiTTLOT A of Graceview Estates Section 10, township 124,Range 029 Current Market Value of Site: $150,000.00 Present Zoning of Site: Residential Proposed Zoning of Site: Independent/assisted living 65 years of age and older Is the Applicant the Fee Owner of the Site: Yes If No,has a Purchase Agreement been executed for the subject property?Please Explain: Property was purchased 4-12-16 Dollar Amount of TIF/Abatement Requested: To provide this type of facility in St.Joseph and to make it available to residents of all income levels we will need at least 90°fo of the new taxes generated by the project reinvested into the project for the life of the TIF district. Explain why TIFfAbatement is Needed for the Project: Construction costs and operating costs often deter facilities like ours from developing in smaller communities. It is a struggle just to finance and cash flow a market rate facility focused on providing housing for local residents as they age. In addition to the typical challenges facing market rate projects in small communities,we propose to construct a facility that will provide access to residents of a11 income levels. Market rate private pay monthly rent is estimated at approximately $2,000 per month,Medical assistance residents will pay$892/month(group residential housing)which will result in a revenue loss of$1,108 for each customer on Medical Assistance. We are proposing 10 apartments be offered to Medical Assistance recipients,which will result in a revenue loss of$11,080 monthly and$132,960 annually. In order to serve these residents,we will need your support to make up for lost revenue. Even at a 90%reinvestment, losses in revenues are anticipated to exceed$60,000 to provide these types of units. This information is further detailed in our comparative pro formas. Describe the number of permanent full-time equivalent jobs to be created and/or retained: In addition to construction jobs created in development and building the facility,the facility will employ 15 full-time and 15 part-time employees. These will be new jobs in the community. Please refer to pro-forma for makeup of staff positions. Estimated annual salaries of$600,000 plus benefits will be provided to employees. Describe any other public benefits resulting from the Project:_Our facility will provide the public with numerous benefits. The facility will allow local residents on Medical Assistance to age in their community instead of having to be uprooted to St.Cloud or other facilities further from home.Parents will be able to stay near their children and grandchildren in the local community,residents will be able to remain close to their church, friends, family and community. In addition to providing the opportunity for lifelong residents to remain in their hometown of St.Joseph,the project will provide appro�mately$600,000 in local payroll per year, employees who may live in the community,move to the community, stop at the local market,buy fuel,and shop for goods and services. In addition,the goal of the facility is to provide residents the ability to continue to"live" in St.Joseph. Residents will continue to dine,bank, shop attend church,and be active members of the community. Project Architect Name: Steven Rudnicki Architect Address: 31 315t Ave. S, Saint Cloud,MN 56301 Architect Phone: 320-255-0128 Arclutect Email: steverudnicki(a�hotmail.com [26468-0001/2298461/1} St Joseph TIF/Abatement Application Poge/2 Project Engineer Name:Paul Schroeder Engineer Address: 7699 Anagram Drive, Eden Prairie,MN 55344 Engineer Phone: Cell: 651-249-7894 Engineer Email: paul.schroeder(c�westwoodps.com Anticipated Project Start Date: 7-1-16 Anticipated Completion Date: 5-30-17 FINANCIAL INFORMATION Estimated Project Costs: Please complete Appendix A—Financial Information(attached) Has the business,owners or parent company ever declared bankruptcy? No Has the business,owners,or parent company ever defaulted on any loan commitment?No Has the business,owners,or parent company every used tax increment financing or abatement for a project in the past? Yes If Yes,please include details as to where and when.Please indicate whether or not we may contact the conventional financer: Hilltop Health Care Center of Watkins, MN used tax abatement to construct 34 assisted living apartments along with an addition for a new therapy/dining and office space for the existing skilled care center. The project was completed April 1, 2015. INFORMATION CHECKLIST The following information must be presented to the St.Joseph Community Development Director as soon as possible. The information will be evaluated to determine if the proposed project conforms to the City's goals and objectives. 1. Attach a map illustrating the exact boundaries of the proposed development. 2. Attach a general written description and drawings of the project illustrating: —� Size and location of existing and proposed buildings � Building concept plans including a site plan,building elevations,building openings, plumbing and HVAC systems,number of stories, square footage per use,construction type, building materials, and cost estimate. -� Proposed use of property and type of development, estimated traffic to be generated by the project per day. We are proposing a senior housing development consisting of 45 apartments. We anticipate that 15 customers will have cars. We will staff around 30 full and part time employees 24 hours a dayf 7 days a week. One three shifts we can expect 5-6 staff inembers driving to work. We will also have visitors/volunteers throughout the day. The campus will also have a bus to drive customers to the clinic,grocery store,etc. -� Off-street parking. We will not need any off street parking this will be all contained on the property via parking lot and garages. -� Project Schedule. We want to begin construction July 1St 2016 , completion Apri12017. � Estimated market value of the project when complete(City will work with the Stearns County Assessor's Office to obtain this). Current estimates based upon discussions with the [26468-0001j2298461/1] St.Joseph Tlf/Abatement Application Page�3 Assessor(without the benefit of a plan review by the Assessor)is$86,000 per unit(total value for property tax purposes is currently estimated at$3,870,000). 3. Project fmancing information including: � Proposed project funding sources and uses statement,including a demonstrated gap in financing.This will be a bank placement loan with Central Minnesota Credit Union. Please see pro-forma for debt coverage ratio. Bank requires a minimum debt coverage of 1.25. � Project financial performa analysis/cash flow analysis demonstrating a gap in financing Please see pro-forma. � A statement illustrating why the project doesn't cash flow without TIF/Abatement Private pay apartment rent is at$2,OOOlmonth,Medical Assistance only pays$892lmonth in rent,resulting in a monthly loss of$1,108 per customer. We are proposing 10 units be Medical Assistance,resulting in an annual revenue loss of$132,960. See attached pro formas. 4. A statement identifying the public benefit of the proposed project in terms of number of jobs created,number of jobs retained,increase in property value,redevelopment impact,economic development impact,etc... The public benefit is allowing the residents(seniors)of Saint Joseph to remain in their community without being transferred to Waite Park, Sartell, Saint Cloud, andlor Albany to get senior housing/services. It will offer an estimated 15 full-time jobs and 15 part-time jobs. Seniors will continue as active members of the community and together with employees of the facility will visit the clinic,bank,grocery store,churches, and restaurants. 5. A written perspective of the Developer andlor Development Company including background and experience of the business entity,company leaders,company history,past development achievements,etc.Fred Struzyk and I have owned Hilltop Health Care Center for 3 years as of May 1, 2016,in Watkins,MN. In that time we have added 34 assisted living apartments and retained nearly 90 jobs in the City of Watkins(largest employer of community). SIGNATURES I certify the statements contained in the Application and supplemental materials axe true,complete,and correct to the best of my knowledge, and are made by me in good faith. I understand that any falsifications, misrepresentations,or omission of facts in this Application shall be sufficient cause for disqualification andJor ineligibility for tax increment financing and/or abatement approval,regardless of the time that elapses before such false information is discovered. Applicant Signature: Tom A. Opatz Date: 4-12-16 Co-Applicant Signature:Fred Struzvk Date: 4-12-16 City Administrator: Judy Weyrens (320)363-7201 [26468-0001/2298461 j1] St.Joseph TIF/AbatementApplication Page/4 1 �i 1 ,� � . • • . � � . • . IUIWIWIPIIIIIIIIIIUIIIIIIIIIINNNIIINIININ111NII7 IIIIIIIIIIIIIIIII IIIIIIIIIIII�;':::IIIIIIIIIIIIIII��:"':I II�I�I�IIIIIII IIIIIIIIIIIIIIIII.e�S!7::e�Silieu�e�,ll::e�Si7:si:E:S. 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