Bethesda proposes $16 million facility in New London

Bethesda proposes $16 million facility in New London

April 6, 2019

Bethesda proposes $16 million facility in New London

After meeting with representatives of nonprofit senior living organization Bethesda, of Willmar, the City of New London passed a resolution Wednesday evening calling for a public hearing to establish a TIF (tax increment financing) District.

This TIF District would allow Bethesda to construct a $16 million senior and assisted living facility in New London near Peterson Parkway.

Although the project is still in its preliminary design phase, Bethesda plans to create a 72-unit, 95,000 foot facility featuring 18 memory care units, 18 assisted living units and 36 senior apartments.

Also featured in the preliminary site design is a town centre with a chapel area, open community areas, dining spaces, recreational opportunities, a spa and the addition of a satellite Club Bethesda wellness center.

Bethesda also aims to build a daycare at the facility. However, because they have not found a partner to assist in creating the daycare, this amenity is not guaranteed.

In order for the project to be financially viable, the length of the proposed TIF District is 26 years, Bethesda has requested the 26-year term due to the 26-year loan the organization requires to finance construction costs.

“Based on our pro forms, the project won’t be financially viable without the full term” Bethesda CEO and President Michelle Haefner said.

While the 26-year TIF District is considered lengthy when compared to similar TIF-financed projects, Bethesda is currently in its 15th year on a 25-year TIF District used to fund its Olivia site. That site, Haefner said, is “going quite well,” with demand resulting in a waiting list for residents.

Because the project is funded through a TIF District, there is no risk to the tax-payer, according to the TIF Advisor Shannon Sweeney of David Drown Associates Inc.

“To be absolutely clear, there’s no financial risk to the City in regards to a TIF payment” he said. “They have to pay their taxes to the County and the County then distributes some of that back to the City as as Tax Increment. Then the City reimburses a portion of that to the developer. If the developer doesn’t pay their taxes, there’s no reimbursement made, so you’re not putting your taxpayers at risk,” he said to the Council Wednesday.

The TIF District would consist of an 80/20 split, with the City of New London retaining 20-percent of the District’s property taxes, which can then be used to fund housing and infrastructure-related projects within the city. According to New London City Administrator Trudie Guptill, the City would devote a portion of these funds toward housing projects as well as financing the re-routing of the water main on Peterson Parkway.

Should the TIF District be established for the project, construction may begin as early as this summer.

As demand for both daycare and assisted living continues to increase, both the City Council and local Economic Development Commission (EDC) believe the facility would be an asset to the community.

“The EDC fully supports this project,” Willmar and Kandiyohi County EDC Executive Director Aaron Backman said. “It’s probably one of the largest investments that’s ever been done in the City of New London. […] We think [Bethesda] would be responsible stewards and a responsible business in his community.”

A demand study by Bethesda, according to Haefner, indicated a need for senior living in the New London area.

In addition to serving the Willmar population, she said, the site also serves a number of people from surrounding areas that either live at the Willmar facility or receive services on behalf of it.

“Now we’re looking t how we can provide services to areas around Willmar as well, and we do see a need in New London.”

As reported by the Minnesota State Demographic Center, Kandiyohi County can expect to see an increase in its senior population of seven-percent over the next decade, rising from 27-percent of its population consisting of adults 65 and older in 2020 to 33-percent in 2030.

In addition to serving the community’s growing senior population, Haefner added that the proposed site also is an ideal location as the 11 acre parcel on Peterson Parkway is located near the medical clinic.

She also stated the site would generate approximately 60 full- and part-time jobs.

Overall, said New London Mayor Bill Gossman, “I see very little risk for the City.”

Council Member Christa Otteson voiced her support for the plan as well, adding that she would like to see an emphasis not only on amenities for seniors, but for all demographics of the community.

“I think the idea of having a nice new place would be pretty awesome for the community,” she said.

“[…] I also think as a council person [adding a multi-generational component] is something I feel very strongly about because we’re making a long-term commitment financially to this project, and our community is going to look really different in 20 years, and we’re going to have a lot of seniors in 20 years. But I also think a project of this size really has a potential to impact the way we gather as a community.

“Having a daycare is a really great start, but making a commitment to shared spaces is something I would really like to propose that we talk about.”

New London is scheduled to hold its public hearing on the TIF District 5:30 p.m., May 22 at New London City Hall.

Lakes Area Review by Brett Blocker, Editor