Maplewood City Council/Manager Workshop:

Gethsemane Senior Housing

Feb. 12, 2007, 6:00 PM in the Council Chambers

Wildly Unofficial Notes by JN

As the meeting began, city manager Copeland proposed that the council do their voting on applicants to citizen commissions, so that the resulting appointments could be made during the regular council meeting scheduled for 7:00. Once this was out of the way, the meeting proceeded to its agenda: a presentation to the council regarding Gethsemane Senior Housing. The mayor invited public works director Chuck Ahl to give a brief introduction to the topic, but he basically said it was all new to him.

Thus the floor was turned over to Bob Van Slyke (apologies if I have the name wrong) of Presbyterian Homes, who had also brought some members of Gethsemane Lutheran Church and the architect. His purpose was to give a presentation on a proposed senior housing project. Before getting too far in, they wanted to show the city council what they where looking at and thinking in terms of the site and concept, and they wanted to put forth idea of pay-as-you-go tax increment financing (TIF) for the project. They are prepared to go through the formal process for applying for TIF, but wanted to get input and opinions from the council at this stage to “find out if they're going down the right track or not.” They do not want to spend a lot of money or make a lot of plans if the council is not in favor of their concept, does not share their concern for affordable housing, or opposes the use of TIF on principle.

The proposed project is a collaboration of the church and Presbyterian Homes. Presbyterian Homes has partnered with other congretations around Minnesota to put senior housing on church property. Mr. Van Slyke cited one example in Mahtomedi, built on church land in 1999. In that case, 14 units were designated “affordable,” and the city provided TIF to help include those affordable units in the project. They think the project is recognized as a big success by that community and St Andrew's Church, and they feel that this Gethsemane project offers the potential to be a similar success.

Next up was the architect, Ward Isaacson of Pope Architects. He walked the council through the current plans, and invited them to stop him with any questions.

Juenemann asked about the lower level and its memory care units; do they have half windows, or totally above ground? Isaacson answered that it would be a secured unit, but still regular windows. The topography of the land means the units will effectively be ground level.

Rossbach wanted to know about plans for the park. Isaacson said someone else needed to handle that question.

But first, Juenemann asked a question maybe for Ahl or public safety officials: are there any issues with what they have proposed for as far as emergency access is concerned? Isaacson said they had been in several times to talk with the fire chief about that issue, to provide fire hose access, etc., in their design.

Next up was Jerry Moran of the church, who is on the church council, to talk about the park and site, as well as to talk about the church and school and their mission in the community, and their history as a corporate citizen. They've been in the community for something like 60 years, approximately 50 in the current location. “As an ongoing part of the church mission,” the leaders of the church have considered building some kind of senior housing on part of their property.

There has been a lease for more than 20 years between the church and Maplewood, at $1 per year, for the city to use the space where development will occur as park land. In order to do anything with the land, notice of cancellation of the lease had to be given; this happened several years ago, and the cancellation was effective in August 2006. Everyone on the park commission agreed to continue with the current situation, as though there was still a lease, until plans for new uses firm up.

Now the congregation would like to use the property to expand its mission, with senior housing in addition to its church and school. They've looked at this from several different perspectives, to figure out how to make this whole thing work, including a significant number of units for low income housing, and that's why they're looking into TIF. They would like to continue working with the city, with about 4 acres of the current 10 available for continued use as park land; they're also interested in talking about how they might offer the athletic facility in their school for greater community use. The congregation has “no fixed notion at this time of how that will pull together.” The first idea is to see how open the council is to TIF financing and to the project in general.

Cave had a demographic question: What percentage of the congregation are seniors, 55 and above, and “what percentage of those are looking at purchasing or going into these units?” Moran didn't know the percentage, but reported that there are a considerable number of people asking weekly “when they'll be ready to put shovels in the ground,” and some of them are “ready to move.” Some members of the congregation, he also observed, have been there since the building of the church.

Juenemann observed that the neighborhood where it is located does have a high senior population, and thinks this might have a lot of appeal to residents of the neighborhood who might prefer to stay in the neighborhood, if they have the opportunity. She also said she is really glad to see the park still part of the design, and she recalled playing as a child in the open space that was there before the church was built.

Rossbach asked about the past park arrangement: Was the land leased and then the city put in the equipment, ran programs, and treated it like any other park? Moran answered that the city put in equipment, maintained the equipment, cut the grass, etc. Rossbach: At this time in your planning process, are you envisioning a similar type of situation – the city leasing the property and treating it like they have in the past? Moran: “To the extent we've gone through this, we've looked at leasing it to the city under some arrangement. We've laid it out so that it's big enough for a regulation soccer field and a softball field.” Also, they envision a “tot lot” on one end of it. Plus, the park is on the east side of the property, “so that it becomes a nice buffer between the existing homes on Bartleby and the buildings, makes it a nice feature.” So pretty much they're thinking about a similar park to what presently sits there, but 4 acres instead of 10.

Longrie asked: So you're thinking the church would still own the park, as it does now. Moran: Yes. Longrie asked about ownership of the land that the residential development would be on. Moran: The church is contributing it to the partnership that would own the facility (with Presbyterian Homes).

Another guy (I think it was Van Slyke, but I failed to identify him when I was typing during the meeting, so I can't be sure) came up to clarify. A new legal entity will be formed to own the facility. The church will sell the land to the new entity – the land won't be donated free. Longrie wonders if it's real money or just an accounting thing. Answer: It will be an arm's length transaction, so the new entity will own the facility.

Rossbach asked: Will the new entity owning the land be paying property taxes? Answer: This is part of the crux of the issue with TIF. In order to get the affordable units, they need pay-as-you-go TIF. So if they get a TIF district, then once the life of the district ends, the property will be on the tax rolls. In the meantime, what basically happens is that they do pay taxes, but the money is rebated back — in effect, what otherwise would be taxes becomes a subsidy to keep some housing units affordable.

So is the city losing revenue? “The fact of the matter, because this is currently green acres and open space, ... nobody is going to lose money because the property is not paying taxes now.”

Longrie asked about the life of the TIF district. How long do they see it being? Van Slyke said they would like 25 years, and think that would be best for the project, but they'd want to sit down for a discussion. Generally their projects have had 15-year TIF.

Hjelle asked who would be putting in the infrastructure for the four acre parkland. I believe the answer was that the city would.

Redirecting the conversation, the church/developer identified these questions they needed to ask the city about their plans:

1. Is it a viable project, good for the community?

2. Is the council willing to look at TIF?

3. What are the city's interests, in terms of the park?

So, in essence, the discussion of exactly what to do with the park is part of the negotiations that would be part of the whole planning.

Hjelle asked Mr. Copeland to ask Chief Lukin to provide some estimates and modeling of the costs to city services in terms of facilities like this, how much comes back through reimbursement from medicare, etc., for emergency response and so forth. He was wondering about the added costs to taxpayers for the city services that go along with this kind of home.

Longrie also asked if the architect has statistics from their experience, knowing what level of medical calls are typical for projects of this size, with memory care, assisted living, etc. “While we're looking at tax issues as well, we're also looking at the impact on public services too,” she said, and she observed that green space doesn't have as many paramedic calls as a housing unit like this would.

Van Slyke responded that part of their problem in answering a question like that is that they can't get information about calls that the city now gets from seniors who live in their own homes. If such seniors get sick, they or their families are going to call 911. One of the things Presbyterian Homes tries to do with their projects is to have 24-hour home health care staff in the building – problems can first be addressed or triaged by that staff, and if an issue is too serious for them, they can call 911. So they hope this facility will actually reduce the usage of the city emergency services.

Hjelle said that someone living in their own home would be paying property taxes, though.

Van Slyke mentioned that a city can charge an administrative fee on a TIF district, which could cover some of emergency services cost.

Juenemann asked about ownership of the entity that would own/operate the home. Van Slyke said that the two members would be equal 50/50 owners – the church and Presbyterian Homes.

Longrie suggested that the church will choose what to sell for, and that selling price will affect the cost per unit in the development's proforma, so she saw that as having an impact on the but-for test to determine the appropriateness of TIF. She seemed to suggest that the number for the value of the land will just be made up by the church. (This contradicted what the church said earlier.)

Longrie asked about how many affordable units there would be without TIF. Answer: Probably zero, because they'll have to charge enough rent to fully cover costs. Longrie: so, you're asking for the TIF to maintain profit while still having affordable units. Slight clarified that this is a non-profit corporation, so it needs to aim to have income higher than expenses (in order to have a cushion/reserves for the times when they don't). Lognrie asked, would the project have 22 fewer units then? Van Slyke answered: No, they'd still be built, but they would be market-rate. He said they have studied the housing market in Maplewood, and believe that it's important because of the demographics and income levels of Maplewood that there need to be some affordable units.

Rossbach: “You're exactly correct” about the market, and there is a “particularly acute shortage” of affordable housing for seniors in Maplewood and the metro in general. So he thus far applauded their efforts for what they're thinking about, because of the big need for this. He also said that for any project in the past, the city has in some way subsidized affordable housing – if not by means of TIF, then for example by allowing a developer to have higher density (bringing down unit costs). So he has no “huge problem” with the concept of doing that. There remain lots of ground and details to cover, but he'd like to go at it with a positive attitude.

Longrie, “to follow up on that,” said this “a private business decision,” and the city has a TIF process open and available for anyone who wants to apply. She said that applicants always have to think of contingencies when they apply. She said the council can't provide any decision at this point, as they have no numbers or any basis to look at TIF, but she wanted to say that the application process is available to folks, and if they feel they can substantiate the but-for test, that's why they can go through it.

The presenter returnd to the land issue, for clarification. He said there has to be an arm's length appraisal, so that's how the land value is going to be done. “I guess my question to you mayor and to the council tonight,” if they come back with formal application and data and it looks like it could qualify, could they get TIF. Mayor said “we can't tell you that” without the facts.

Van Slyke pressed for a more definite answer. He advised that council that they need to understand that the developer needs to make a decision at this point, in terms of a lot of costs, not knowing whether they even have a chance. He said that some cities do say “absolutely not,” when it comes to TIF, and so he appreciates that this council did not come out and clearly close the door on the possibility.