02-18-97 agedna~~
CITY OF RICHFIELD, MINNESOTA
TUESDAY, FEBRUARY 18, 1997
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
COUNCIL CHAMBERS
7:00 P.M.
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF (1) REGULAR HRA MEETING OF JANUARY 21, 1997
AND (2) SPECIAL HRA MEETING OF FEBRUARY 3, 1997
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON
THE AGENDA
2. ACCEPTANCE OF REPORT ON SENIOR HOUSING NEEDS ENTITLED
SENIOR HOUSING MARKET ANALYSIS AND DEMAND ESTIMATES FOR
RICHFIELD
HRA LETTER NO. 6
3. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 6320-
15TH AVENUE AND 6921-12TH AVENUE UNDER NEW HOME. PROGRAM
AND RICHFIELD REDISCOVERED, RESPECTIVELY
HRA LETTER NO. 7
4. CONSIDERATION OF RESOLUTION AUTHORIZING ISSUANCE OF
COMPLETION CERTIFICATES TO STEVEN MARLIN GRANT HOMES, INC.
FOR 6824 QUEEN AVENUE AND 6621 GIRARD AVENUE; TO VARIETY
HOMES, INC. FOR 2513 WEST 70TH STREET; TO TIMOTHY S. CROMBIE
CONSTRUCTION FOR 2916 WEST 71 1/2 STREET; AND TO SUSSELL
CORPORATION FOR 7344 BRYANT AVENUE
HRA LETTER NO. 8
5. CONSIDERATION OF RESOLUTION AUTHORIZING HENNEPIN COUNTY HRA
AS LENDER FOR MINNESOTA HOUSING FINANCE AGENCY PROGRAMS
HRA LETTER NO. 9
6. CONSIDERATION OF RIGHT OF ENTRY AGREEMENT BETWEEN TOLD
DEVELOPMENT AND HRA
HRA LETTER NO. 10
7. CONSIDERATION OF PROGRESS REPORT FOR JOINT USE OF VFW AND
AMERICAN LEGION FACILITY
HRA LETTER NO. 11
8. CONSIDERATION OF LIQUIDATION AND DISSOLUTION OF CORPORATIONS
C, F AND H
HRA LETTER NO. 12
9. EXECUTIVE DIRECTORREPORT
10. CLAIMS AND PAYROLL
ADJOURNMENT
Auxiliary aids for individuals with disabilities are available upon request.
Requests must be made at least 96 hours in advance to the Administrative
Services Director at 861-9702.
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 12
Agenda February 18, 1997
Issue Statement:
Consideration of liquidation and dissolution. of Corporations C, F and H.
Background:
In July 1995, three corporations were formed to facilitate the organization of three
separate nonprofit housing corporations. The action creating three holding corporations
was for the sole purpose of a proposed property transaction involving Sage
Corporation.
Since that time, Sage Corporation withdrew their proposal and requested the release of
the corporation names which used the names of their three apartment complexes. The
corporation names were changed to C, F and H and the apartment complex names
were returned to Sage Corporation.
The corporation names were changed rather than dissolved with the intent of future
use. Since that time it has become evident that these corporations will not be needed.
The corporations have February 18, 1997 to hold their annual meeting. At this meeting
the action to dissolve each corporation should be taken.
Recommended Motion:
Request that each of the three corporations, C, F and H, authorize execution of the
following documents:
1. Notice of Intent to Dissolve by the Executive Director;
2. Articles of Dissolution of each corporation by the Executive Director;
3. Corporation dissolution resolutions for each corporation by the Board of Directors.
and authorized HRA representative.
Basis of Recommendation:
1. The Corporations C, F and H were created as real estate holding corporations.
2. Corporations C, F and H are not needed.
3. A logical action would be to dissolve and liquidate the three corporations.
Alternative Recommenda#ion:
1. Do not take any action at this time and leave the three corporations intact.
DiscussionlDecision Mode:
The necessary resolutions are ready for execution by the Board of Directors for each
corporation and the HRA.
Respec f submitted,
Jam .Prosser
Executive Director
JDP:cak
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. ii
Agenda. February 18, 1997
Issue Statement:
Consideration of a progress report for the joint use VFW and American Legion facility.
Background:
In December 1996 staff presented a status report on the proposed joint use facility. At that
time the HRA authorized staff to continue planning for the facility. This letter and
attachments contain information on the current status of the project (the first attachment
identified as A delineates the objectives which staff has used to help define the concepts
identified in this letter). Staff has continued working with two facility consultants, architect
Gary Tushie and restaurant specialist Jim Domoracki, to define concept details. The facility
consultants have now established a general building layout and .have also identified the
building's major components; upper level banquet hall, a lower level bar/restaurant and
separate space for the VFW and the American Legion.
Financial consultant Sid Inman has refined the potential financing options. As requested by
the HRA, those options include a private financing approach and a public approach (see
attachment B). Mr. Inman will be at the HRA meeting to review these two approaches. A
short list of the pros and cons of the two options has been developed (see attachment C).
Staff is seeking additional comments from the HRA to be included on the list.
A communication and ublic information strategy is also being prepared so that information
p
can be conveyed to the membership of the two organizations and to the public in an timely
and accurate manner. The information to be communicated is contained in attachments D
through H and will be discussed at the February 18 meeting.
Financial Considerations
The VFW and American Legion would rely on equity from the sale of their present facilities
and cash reserves to finance their portion of the costs of a new facility. According to BCL
Appraisals, the market value of the present VFW and the American Legion facilities is $1.3
million and .$1.19 million respectively. The HRA would offer to purchase the facilities at these
values. The cost of the new facility, including land and site development, would be
approximately $5.3 million. The VFW and American Legion would be required to invest a
significant portion of their proceeds of sale in a new facility.
Property Disposition:
Regardless of the finance option chosen (public or private), the property site issues remain
the same. The HRA would acquire the current sites to facilitate the moving of the two
organizations into a new building on the Lampert Lumber site, thus freeing up the current
sites for new development opportunities. (Attached is an indication of interest from Housing
Services Inc. in constructing a senior co-op housing development on the American Legion
site identified as attachment I. A buyer would also be found for the VFW site.) Before
construction could begin on the Lampert site, an alternative temporary location would be
found for the City functions which are now on site. To that end discussions with Gleason
Mortuary continue. Discussions with Soo Line Railroad regarding the acquisition of the 66 ft.
wide strip of land adjacent to the Lampert site were discontinued due to the high cost of that
land. While it would be beneficial to have that land as part of the development site, it is not
• absolutely necessary. Continued leasing of the site would be explored.
Next Steps
1. Determine the financial structure and the role of public and private financing focusing on a
potential sale to a private investor and the risks and benefits of HRA ownership.
2. Assess the HRA interest in proceeding with either private or public financing option. The
HRA may also decide to terminate the joint planning effort if neither option appears
acceptable.
3. If the HRA elects to proceed, present a proposal to both the American Legion and VFW
leadership as soon as practicable (a general membership meeting is scheduled for each
organization in March with the VFW meeting on March 3).
4. Initiate discussions with Housing Services Inc. for the redevelopment of a senior co-op
housing development on the American Legion site.
5. Explore redevelopment options for the VFW site with a focus on residential and/or retail
uses.
Recommended Motion:
Discuss the status of the VFW/American Legion project and direct staff to continue the
planning process.
Basis of Recommendation:
1. Substantial progress has been made since early December:
2. Additional discussions will have taken place between the time this letter was written and
the HRA meeting.
3. Both the VFW and American Legion organizations are ready to receive a proposal.
Alternative Recommendation:
1. Defer action.
2. Modify the development concept.
Discussion/Decision Mode:
If the HRA is comfortable with the status to date, it is important to keep the process moving.
Respect y submitted,
• James .Prosser
Executive Director
JDP:ds
ATTACHMENT A
VFW & American Legion Building Project
Qbj ectives
VFTY & American Legion
VFW & American Legion Posts will survive as independent entities within
Richfield, continuing to contribute to and serve the community.
The VFW and American Legion's Clubs' futures are financially secure.
City of Richfield
The City is able.to provide more housing opportunities and choices for
Richfield residents on land that has been acquired from both the VFW and
American Legion.
As with any redevelopment project, the City of Richfield and the Richfield
Housing Redevelopment Authority will have their investment repaid.
The Project
• The pro}ect that is developed following months of review of building and
financing concepts and options is one that makes sound financial sense
and meets project objectives.
• The building is designed for the most efficient space.
• The building is designed so that there is joint funding of com:non space
and individual funding of individual space.
• The building options above the base package are funded up front.
• Public and private ownership options are considered.
• A timely decision on the potential for a joint facility is made in order to
reduce the. uncertainty to members of both organizations and to respond
to current housing demand. The HRA purchases both sites and
construction begins in 1997.
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ATTACHMENT B
P. 1
~, MElVI~RANDUM
TO: VFW/A.L. Working Group
FROM: Sid Inman - Ehlers/Publicorp Inc.
DATE: February 10. 1997
RE: YFW/AMERICAN LEGION FINANCING OPTIONS
You have asked me to put together some of passible financing options for the VFW/AMERICAN LEGION
project. I have listed. the 2 basic options we discussed. All of the options have the following bast
assumptions'
1. The H.R.A. would creatt a new redevelopment district on the lumber/railroad site. Fiscal Disparities
would be taken from inside the district, the city would use the local match option on the district to
avoid loss of state aids and the district is assumed to be 20 years.
_ 2. The H.R.A. would assume a purchase price of the lumber site to be $750,000.
3. A third party (could be the H.R.A.) provides a cash purchase of the V.F.W. and American Legion Site.
4. The building would be divided up in to four "Profit Center" areas
A. Upper Floor that would be a free standing banquet area.
$. Lower Floor-VFW space.
C. Lower Floor -American Legion space.
b. Lower Floor -Bar and Restaurant space
5. The entire shell of the building would be part of the overall financing.
6. The finish cost of spaces A and D would be included in the financing.
7. The finish cost of spaces B and C would be paid for up front by the users.
8. The equipment costs of space A would be part of the overall finatteing.
9. The equipment costs of spaces B C and D would be paid- for up front by the users.
10. The cost of land and site work would be allocated to each area based on Sq. Ft.
11. The total project cost is assumed to be around $5,300,000 (no private developer fee is included).
12 The total sq ft. of the building is assumed to be 25,000. _
13. All private financing is assumed to have a I S year team and a 10.596 rate.
14. Public financing is assumed at both 15 and 20 years at a 7.5% rate.
I S. The H.R.A. would be responsible for al! of the original construction.
OPTION I -.PRIVATE FINANCING -LAND PAID BACK UP FRONT.
The H.R.A. would require that the total cost of the project (minus the V.F.W. and American Legion equity)
would be financed privately. The private financing would provide an up front pay back to the H.R.A. for land
the purchase. The private developer would be given the tax incrcmerit for 20 years.
OPTION 2 -PUBLIC FINANCING -LAND PAID BACK UPFRONT
The H.R.A. would finance the project. The financing would provide an up front pay back to tht H.R.A. for
the land purchase. The H.R.A. would be given the tax increment for 20 years.
- ATTACHMENT B
P. 2
Attached are sample cash flows that show the results of the two options assuming the stated assumptions
You all need to review the assumptions and let me know if I need to make additional changes or assumptions.
If you would like further clarification or have questions, please do not hesitate to call me.
fram the desiE o~
Sid Ixxtax
Developmext Coxsxltaxt/Firutxcia!Aduisor
Eblers axd Associates, Ixc.
2950 Normest Cexter
90 Soxtb Sevexth Street
Mixruapolis, MN SS402
(612) 3398291
FAX: (612) 3390854
EM.41L: sid~ebkrs~ixc.com
N:IMINNSO7AIR ICM[I[1,Cr1f1V p W -pU4
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ATTACHMENT B
750.000 P. 3
~ Costs S1Z.00 25,000 2 000
Taal Ae0{:ataC Code t ~ 000
UPPER ROOK
Shoe • Sue 586.00 72.500 1.075.000
F>f>tsn 120.00 12.500 250.000
Sdt Can 12.007: 1,075.000 128,000
CO~tx'I~erKy 15:0076 1,073.000 161.250
Smpl Water 70.000
FFE 700,000
Sott Ct>s7a 12.007: 770.000 s2,a0p
COnlnyerwy 15.0076 770.000 f15.500
Opaition Caplw 150.000
Pra Mvketiflg 30.000
NloaaadCaete 50.00% 1,038.000 519.000
AaoeitedTaxlnaemtuK 50.00% 930.000 (465.000
TOTAL COSTS
2.827.150
Type a Tenn d Rated Bass Rent Cam TixeS Tout
Lam Lam __ Loan __ Per Sc. Ft._- Pa S0. Ft. Per 1a- Ft. Pgr Sq. R.
~
Private lwn t5
70.4096 .130.59 13.00 38.25 53e.84
7aWArtnWPayrtwnt Se97881
Loan 20 1.5076 s22.1e 10.00 18.25 ~ 531,41
T Waal Pa era
LOMfER FLOOR - YFM
S7feY • tiaSe 581.00 2.000 t82.000
~' ~ .181.00 1,500 121,500
Fioie7t Paid VD FtOra
- Sort Celt 72.00%. 283,500 34,02p
CanYtpsrsy 15.007'• 283,500 x2,525
Small Wtuas paid Up Front
FFE pea Vp Ftatt '
Soh COSH 12.0076 0 Pala Up Front
Camngsnly 15.0076 0 paid tJD Front
Operasan CapRal Paid lip Frpn1
Pro M~n9 Paid Up Florlt
Allonted Golds 14.00% 1.038,000 .745,320
AeoeatW Tax 1nt:r4rr»ra
14.00%
1:30,000 f730,20p I
TOTAL COSTS 375.145
Typed Tsrm a Rated t3iaY Rant Garn ~ -. Ta~wS Taal
Loan Loan ,_ Loin par S0, Ft. Per Sg. Ft. Per $q; FI. Par ga. Ft
prhrakloan t5 70.50% 525.87 S3.0o 5625 S3a.52
Taal Armwt Pay ment 549 240
ublie Loin 20 7.40!6 518.40 53.00 54.25 527.85
Amtmt P 3pl
LOYR•.R FLOOR - AL
StMe S4t.00 2.000 162
000
FkrWt .
Paid Up Frpm
gdt Coq 12.00'b 102,000 59.440
Cananpww.y 15.00% 182,000 2a,3pp
Staas Wise Pax Up From
FFE pax Up Front
~ Can 12.007'• 0 Palo VO F/aR
Cornsr0eney 15.0076 0 PsM VD halt
Opeeatien Cspf W Paid Up Front
Pall Vp Fran
Albat6o C0at3 a.oox t.o3a.aoo e3,o4o
AYtKiIaQ Tax Inaemanl
x.0076
1130.000 174,40D ~
TOTAL COSTS 214.380
Type d Tone d ~ Rats d Ease Rent Cam Taxes Total
Loan Loan Loan
~ Per g9, R Per SQ. Ft. PCr Sa. Ft. Per . Ft. '
Lain 15
tQ5076 114.10 53.00 58.25 _ 573.75
Total Ars1,7a1 Payment X47 494
~'
Lan 20 7.50!6 sta.51 53.00 Se.zS s/9.74
7ael Amall ray
LOMEA FLOOR • MAIN BAR AND AURANT
ShNI 581.00 7.000 547,000
FYU~ 525.00 7.000 775.DOD
Sdt Coe? 12.0076 567.000 68.040
COSY 15.00% 547.000 85,050
Small Warp Patd uP Frertt
FFE Pax Vp Fran I
Sdt Can 1200% 0 Paid Up Frprlt
Ca<'~Y tb.Op76 0 Paid Up Fran
op«atan CapIW pia up Frorttt
Pr°
~ Fax IJp hoot
Aeocatvd ze.o07: 1,004.000 260.1140
~~ Ti'r tnaemart 28.0076 938000 100
TOTAL COSTS y~,~
Typed Temr d Rated t3ess Rent Cem TitaeL ay
Latn LOan Loan _ ,_ Per ~. FL ver S0. Ft Per Sa. a. par 9q. ft.
~
PMaq LtAtn 1g 10.50% 317.88 13.00 36.25 521.13
- .. Tad Annwl payme
. N 5189 899
vnblic Loan 20 7.50'h 572.97 53.00 10.25 522.22 .
A Tagil t ant 1555tH
4 342 ~5
RIt 00+2e Preperoe W E1WyP~YCap x+e. YRMI~4i
ATTACHMENT C
VFW & American Legion Building Project
Worksheet
Public vs. Private Options -- Pros and Cons
Public Option
Pros Cons
1. Less Cost 1. Mon liability
2. More control with guarantees; 2•
first in line on debt.
3. Potential return on investment. 3.
4. 4•
5, S.
6. 6.
7. 7.
Private Option
Pros
1. Political & perception issue --
City is one step removed from
involvement. with facility.
2. Less legal liability.
3.
4.
5.
6.
7.
Cons
1. Second in line on lease
guarantees.
2. More cost.
3. Less return on investment.
4. Loss of control of future use of
facility.
5.
6.
7.
HRA
VFW & American Legion Building Project
Responsibilities: HRA
Leases upper
level space to and
enters contract for
banquet facility
management with
banq. facility oper.
Banquet
Facility
Operator
A. Purchases VFW & AL sites.
B. Acquires new site & builds bldg.
C. Finances acquist./construction with
sale of taxable G.O. bonds and
receives increment.
D. Provides furniture, fixtures &
equipment upper level.
L. Enters into .leases and agreements
as follows: I
Leases lower
level American
Lcgion space to
American Legion.
American
Legion
ATTACHMENT D
Leases lower
level restaurant/
bar facility to
rest.lbar manager.
Hestaurant~
Bar Manager
Lower Level
•
Leases lower
level VFW space
to VFW.
ATTACHMENT E
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VFW
mer~can
Legion
A. VFW sells r
current site
to HRA
at fair market
value.
•
VF111/ & American Legion building Project
Responsibili#ies: VFW
B. VFW leases '
its base and
shell space for
lower level
space from
the HR.A.
C. VFW pays up
front the cost of
furniture, fix-
tures & egttip-
tnent for private
space on tower
level.
D. VFW pays
share of furniture
Fixtures & equip-
meat for com-
mon areas, lower
level
~ H RA
F. VFW joins with '
A.L. in joint agree-
ment with a
professional
restaurant/bar
manager for
lower level
facility.
~estaurar
Bar
Manager
Lower
E. VFW makes lease pay-
ments that include
taxes, the incremen-
r tal value of which
is used to amortize
TlF bonds.
G. VFW and A.L.
guarantee lease
that the lower
level restaurant
bar manager
has with .the
HRA.
ATTACHMENT F
VFW & American Legion Building Project
Responsibilities: American- Legion
A. A.L. sells .-
current site
to HRA
at fair market
value.
•
B. A.1,. leases '
its base and
shell space far
lower level
space from.
the HRA.
C. A.L. pays up "
the cost of
furniture, fix-
tures & equip-
ment for private
space on lower
level.
D. A.1/. pays
share of furniture
fixtures & equip-
ment for com-
mon areas, lower
level.
~ HRA
mer~ca
Legion
F. A.L. joins. with
VFW in joint
agreement with a
professional
restaurantlbar
manager for
lower level
facility.
~estauran
Bar
Manager
Lower
E. A.L.makes lease pay-
ments that include
,,,taxes, the incrernental
value of which is
used to amortize TIF
bands.
G. A.L. and VFW
guarantee lease
that the lower
level restaurant
bar tnanagcr
has with the
HRA.
ATTACHMENT G
VFW & American Legion Building Project
Responsibilities: Banquet Facility operator
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A. Leases upper level
from the HRA.
B. Enters into contract
to operate the banquet
facility on the upper
C. Makes lease payments D. Is issued a
that include taxes, the liquor license by
incremental value of the City for the
" ~ " ~"" - 'el ban-
lity.
ATTACHMENT H
VFW & American Legion Building Project
Responsibilities: Restaurant/Bar Manager .Lower Level
C,
A. Enters joint agree-
ment with Vla W &
A.L. to operate(
manage the lower
level restaurant/bar.
i
B. Leases space from
HRA {with lease
guaranteed by
VFW & A.L.}
merican
legion
C.1Vlakes lease pay-
ments that include.
taxes, the incremen-
tal value. of which is
U. is Issued a
liquor license
by the City.
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- - ATTACHMENT -1
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- :.
" ~ HOUSINGSERVICES "
- Development ojSenior.Communities ..
. ~ ..James D. Prosser •.
City.. Manager -, _ . ~ - : -
-.City of Richfield ..
6700 Portland Avenue _ .
Richfield, MN 5542
RE: Senior Cooperative Proposal - - -
Dear Mr: Prosser:
Recently we met with Bruce Palmborg and John Melin to discuss the status of our ~ "
proposed project and the VFW /American Legion facility.
We presented a concept plan which consisted of a five story brick building containing T50 ~ _
apartments and 150 underground heated parking spaces. The site plan also shows - _
- additional' on-site .surface parking and a large landscaped. patio. and gardens area for the.
-residents.. The footprint of the structure allows us to provide the: necessary 1:1 covered _ -
parking ratio. that. our residents expect as well as the ability to market the same type and -
mix of units that have been very well received in.Rochester, Inver Grove Heights, and
Plymouth.: _ - .
This proposed building would be organized as a limited -equity senior cooperative (LEC) - -
under thr Minnesota Common Interest Community Act. LEC's are governed and owned ,
by the members. They differ from traditional common-interest communities in that the
purchase price of a membership share and the rate of equity appreciation is limited in _
order. to maintain affordability. The 7500 York .Cooperative in Edina is perhaps-the best ~: .
- known local- example: Professional property management will be provided by Housing _
• -Services, Inc.. (HSI). HSI is a member of the National Association of Housing --
- .
Cooperatives....,
:During our meeting we were also provided with an update on the substantial progress -
.being made on the VFW /American Legion veterans club facility.. The timetable was ;
discussed and.we spoke of how our project might fit within the critical -path of this -
- facility's "schedule. - - -
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7~JCX) tntern~tic~nal Dri~~e • Suite ? t0 • Blo~xrtic;~ton. ~t~ _~5-425 • 6t2-H,>~.-ct-+(i- • F.~X: 613-85-~-4-437
-~ ATTACHMENT L
. _ ~ - P. 2
Since that meeting we have given considerable thought to the City /Veterans
organizations process and. how we could best fit our plans, to build a senior cooperative
into it. - . .
Our first concern is if we negotiate directly with the American Legion it will disrupt the
. already established lines of communication. between the Legion, the City, its consultants,
and the VFW. We do not wish to hinder in any way, the ongoing negotiations to create a
new jointly owned veterans facility:
We are also concerned that our efforts to acquire the American Legion site will inevitably -
lead to prolonged discussions regarding scheduling : ie, it is impossible for us to set a date
certain for site acquisition. Our funds are not available until loan closing. This closing is -
- ' preceded by the local approval, lender. underwriting, and mazketing process. Typically -
we negotiate an option agreement with a series of extension clauses. This issue could -
`become very divisive given the probable need of the American Legion to dispose of their
building and transfer equity and working capital to a new facility.
Accordingly, we would ask that the city give consideration to the idea of directly
acquiring the American Legion site. We would then stand ready to enter into a ,,
Development Agreement with the city which would allow us to proceed with our planned
=_~ ~- - Cooperative. _
. We wish to underscore our long-standing commitment to develop this senior
project. We are prepared to allocate all of the. necessary resources as soon as this site is
.available and under contract. We have received numerous calls from Richfield seniors and
their family members inquiring about the status of the project. We are convinced- of the
need to create this type of affordable, cooperative lifestyle.
We greatly appreciate your ongoing interest in this housing opportunity and your
encouragement and assistance.
Please let us know of your thoughts on this recommendation.
Sincerely, .
c
'chael W. Conlan
President
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. io
Agenda February 18, 1997
Issue Statement:
Approval of Right of Entry Agreement between TOLD Development and the Richfield
Housing and Redevelopment Authority.
Background:
Ralph Robinson, President of TOLD, has indicated that he is ready to proceed with
Phase I of Meridian Crossings. Phase I would consist of an eight-story office building
and supporting parking ramp on the southern end of the site. Work has been initiated
so that a closing on the sale of the Phase I parcel can take place prior to March 15,
1997.
Several office tenants will occupy the building. Construction financing is available with
slightly more than one floor of the building having a firm lease. The tenant, however,
requires access to the building by January 1, 1998. Thus, Mr. Robinson is requesting
approval by the HRA. at their February 18, 1997 meeting of a Right of Entry Agreement
(TOLD has a buyer for the property upon completion. of construction and achievement
of approximately 85 percent occupancy).
The agreement would permit TOLD to enter the Cloverleaf site prior to closing while still
under HRA ownership. Early entry would permit the initiation of site grading.
There is a degree of risk with the agreement. TOLD could undertake site work and for
some unforeseen reason, the closing on the Phase I site could be delayed or simply not
take place. If that were to happen, TOLD may not pay the site work contractors. To
protect the HRA, .TOLD is required by the agreement to provide a Letter of Credit. The
Letter of Credit would cover those types of costs included on page 3 item 5(a)-5(e).
Attached to the letter is a draft copy of the proposed agreement. Mr. John Dean, legal
counsel, will be present at the HRA meeting to respond to questions.
Recommended Motion:
Authorize execution of the Right of Entry Agreement by the Chair and Executive
Director.
Basis of Recommendation:
1. TOLD has sufficient commitments from tenants and- an end buyer to cause a
lender to provide construction financing.
2. While a March closing is targeted (time being of the essence), TOLD would like to
begin site work immediately.
3. With the terms of the Letter of Credit, the HRA is adequately protected.
4. To satisfy the schedule of a tenant, the building must be ready for occupancy by
January 1, 1998.
Alternative Recommendation:
1. Reject the Right of Entry.
2. Modify the Right of Entry.
3. -Delay consideration of the Right of Entry.
Discussion/Decision Mode:
TOLD would like to initiate site preparation work in February 1997. An additional
comment is related to parking. During construction, it may become necessary to further
restrict parking on Girard Avenue. Staff will be working with Minnesota School of
Business representatives. An objective is to keep parking out of the residential areas.
Respectfully submitted,
Ja a .Prosser
Exec tive Director
JDP:cak
•
•
RIGH'X' OF ENTRY
AGREEMENT
THiS AGREEMENT, made and entered into as of the
L`~cAFT
day of February, 1997 by
and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR. THE
CITY OF RICHFIELD, MINNESOTA, a Minnesota pubic body corporate and politic ("HRA")
and MERIDIAN PROPERTIES REAL ESTATE DEVELOPMENT L.L.C., a Minnesota limited
liability company, dlbla TOLD DEVELOPMENT COMPANY. ("Redeveloper').
WHEREAS, the HRA and Redeveloper .have previously entered into an agreement
•
- entitled Contract for Private Development dated November 6, 1995 which a~eement has been
- subsequently amended by an +nc~ntment entitled First Amendment to Contract for Private
Development dated and, by an instrument entitled Second Amendment to
Contract for Private Development dated all of which arc collectively refereed to
herein as "Contract;" and
WHEREAS, the Contract remains in full force and effect and no events of default have
occurred; and
WHEREAS, the Redeveloper has informed the HRA that it expects to be in a position
to satisfy all of its pre-closing .obligations under the Contract and to close and take title to the
Phase I Property on or about March _, 199?; 2nd
WHEREAS, the Redeveloper has informed the HRA that in order for it to meet
commitments_to prospective tenants, the Phase I Minimum Improvements must be completed and
ready for occupancy by January 1, 1998;
'W>EIEREAS, in order to achieve that objective, the Redeveloper has requested that the
HRA permit the Redeveloper to enter upon the Phase I Property for the purpose of performing
3BD11~822
RCSYS-Gf l
•
certain activitics ("Site V~ork") as hereinafter described in advance of the Closing. on the Phase
I Property; and
WHEREAS, the HIt.A has reviewed the request and is willing to permit Redeveloper to
enter upon the Phase I Property to perform the Site Work prior to closing subject to and in
accordance with the provisions hereinafter contained.
NOW, TIiEREFORE, inconsideration of the mutual covenants and promises hereinafter
contained, the sufficiency and adequacy of which the parties hereby acknowledge, the parties
hereby stipulate and agree as follows:
l..: Definitions. Unless the context clearly indicates otherwise, the terms used herein _
shall have the meanings given them in the Contract.
2. Effect on Contlact. Tbas Agreement shall not be deemed or construed in any way
to i) alter or modify any of the requirements, conditions or circumstances which must be satisfied
or occur prior to closing; ii) suggest that such requirements have been satisfied or occurred; iii)
create any obligation on the HRA or right in Redeveloper to any extension of time to close or
waiver of any preconditions to closing under the Contract.
The parties agree and understand that in carrying out the activities permitted hereby, the _
Redeveloper proceeds at its own risk that it will not close on the purchase of the Phase I
Property; and as a result lose the benefit of such activities.
3. Right of Entrx. Subject to the limitations and preconditions hereinafter provided,
the HRA hereby grants to the Redeveloper the right to enter upan the Phase I Property to perform
the grading and utility work which is shown and described in the permit issued by the City arad
in the approved plans which were submitted together with the permit application ("Site Work")
senii~s~s
xnzs-6s 2
•
and to do all things reasonably necessary and convenient in connection v~zth carrying out such
work
4. Preconditions. The rights to be granted hereunder shall not be granted until all of
tine following preconditions have been naet:
(a) The parties agree to the tams of a tree .protection plan;
(b) Redeveloper provides the HRA with an irrevocable Letter of Credit in the
amount of $ ;
(c) Redeveloper furnishes -the HRA with evidence of insurance policies in
.- amounts. and containing coverages reasonably acceptable to the HRA.
5. Letter of Credit_ (A) The Letter of Credit described in paragraph 4(b) shall be
in a form acceptable to the LIRA and shall save as security for the following obligations:
(a) Redeveloper shall pay and satisfy any claims by contractors or materialmen
involved in the Site Work;
(b) Redeveloper shall reimburse the HRA for any site protection work which
is necessary as a result of the Site Work in the event that the property does not close;
(c) Redeveloper shall reimburse the HRA for the replacement cost of any trees
which ate`removed in connection with the Site Work in the event that the property does
not close;
(d) Redeveloper shall reimburse the HR.A, for staff and consultant expenses and
costs incurred in connection with allowing for the .early start;
(e) Redeveloper shall reimburse the HRA for the cost of the endorsement
described in 5(C)(b).
a
~~~~~~
RG125-66 3
•
(B) The HRA shall be entitled to draw upon the better of Credit is the cvcnt of the
Redeveloper's failure to perform any of the obligations described in paragraph SA but only
following 30 days prior written notice of such failure froAn the HRA to the Redeveloper.
(C) The Letter of Credit, or underdrawa portion shall be released upon the happening
of any of the following:
(a) closing on the Phase I Property between the I~tA and Redeveloper; or
(b} issuance by Old Republic Title Iasurance Company ("Title Company"} of
an endorsement to as owner's policy to the effect that it will insure title against any
claims occasioned by or arising out of the Site Work. Y
~~`' 6. Indemnity. Redeveloper hereby indemnifys, holds harmlcss, agrecs to dcfcnd the -
HRA, the City of Richfield and their respective officers, agents and employees from any clainn
of whatever nature occasioned by or arising out of the Site Work.
7. Term. The right of entry shall commence upon the date on which all of the
preconditions have been satisfied and the Redeveloper has obtained its permit and shall terminate
on March _, 1997 unless this agreement or the closing is extended by the mutual agreement
of the parties.
8. Limitations. The right of entry shall be .subject to .the. following limitations:
9. Value. In addition to the understandings contained in Paragraph 2, the
Redeveloper fiuther acknowledges that in the event closing of the Phase I Property does not take
place, it shall have no claim, whether by set off or otherwise, for any value which the Site Work
may add to the Phase I Property.
.78D117822
RG125-66 4
•
•
IN WITNESS W~IEREOF, the parties have set their hands as of the day and year first
above t~Titten.
THE DOUSING AIJD REDEVELOPwIENT
AUT~IORITY OF THE CITY O!~
RICHFIELD, MINNESOTA
By
Its
By
Its
MIrRIDIAN PROPERTIES REAL ES"I'ATE
DEVELOPMENT L.L.C.
STATE OF MINNESOTA )
B},
Its
SS
COUNTY OF ) _
The foregoing instrument was acknowledged before me this day of ~ ,
1997, by and ,the Chairperson and Exccutivc
Director of The Housing and Redevelopment Authority- in axzd for the City of Richfield,
Minnesota.
Notary Pubaic
•
JBD22782~
kC125-66
5
r~
STATE OF MINNIESOTA )
SS
COUNTY OF HENNEPIN }
The foregoing instrument was acknowledged before me this day of ,. ,
1997, by ,its of Meridian
Properties Real Estate Development L.1,.C. a Minnesota limited liability company, d/b/a TOLD
Development Company.
Notary Public
•
•
JBD117A22
RC125-66
6
n~
t'
•
•
MEMORANDUM
TO: HRA Commissioners
FROM: John Dean
DATE: February 18, 1997
RE: TOLD Letter of Credit -Amount
The following factors should be considered in' determining the face amount of the
proposed Letter of Credit:
1. Actual cost of Site work $300,000
2. Cost of legal and staff time 2,000
3. Cost of seeding and fill for Phase I 21,625
(assuming no project)
4. Loss of value of Phase I Property
because of tree removal
27 trees at $6,284 169,668
5. Building code structured cost review (assuming
no project) 2,000
495 293
JBD118009 KENNEDY & GRAVEN, CHARTERED
RC125-66
,,
u
RIGHT OF ENTRY
• AGREEMENT
THIS AGREEMENT, made and entered into as of the day of February, 1997 by
and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, MINNESOTA, a Minnesota pubic body corporate and politic ("HRA")
and MERIDIAN PROPERTIES REAL ESTATE DEVELOPMENT L.L.C., a Minnesota limited
liability company, d/b/a TOLD DEVELOPMENT COMPANY ("Redeveloper")
WHEREAS, the HRA and Redeveloper have previously entered into an agreement
entitled Contract for Private Development dated November 6, 1995 which agreement has been
subsequently amended by an instrument entitled First Amendment to Contract for Private
Development dated and by an instrument entitled Second Amendment to
Contract for Private Development dated all of which are collectively referred to
herein as "Contract;" and
WHEREAS, the Contract remains in full force and effect and no events of default have
occurred; and
WHEREAS, the Redeveloper has informed the HRA that it expects to be in a position
to satisfy all of its pre-closing obligations under the Contract and to close and take title to the
Phase I Property on or about March _, 1997; and
WHEREAS, the Redeveloper has informed the HRA .that in order for it to meet
commitments to prospective tenants, the Phase I Minimum Improvements must be completed and
ready. for occupancy by January 1, 1998;
WHEREAS, in order to achieve that objective, the Redeveloper has requested that the
• HRA permit the Redeveloper to enter upon both the Phase I Property and the Phase II Property
JBD117822 1
RC125-66
~.
r
(collectively the "Property") for the .purpose of performing certain activities ("Site Work") as
hereinafter described in advance of the Closing on the Phase I Property; and
WHEREAS, the HRA has reviewed the request and is willing to permit Redeveloper to
enter upon the Property to perform the Site Work prior to closing subject to and in accordance
with the provisions hereinafter contained.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter
contained, the .sufficiency and adequacy of which the parties hereby acknowledge, the parties
hereby stipulate and agree as follows:
1. Definitions. Unless the context clearly indicates otherwise, the terms used herein
shall have the meanings given them in the Contract.
2. Effect on Contract. This Agreement shall not be deemed or construed in any way
to i) alter or.modify any of the requirements, conditions or circumstances which must be satisfied
or occur prior to closing; ii) suggest that such requirements have been satisfied or occurred; iii)
create any obligation on the HRA or right in Redeveloper to any extension of time to close or
waiver of any preconditions to closing under the Contract.
The parties agree and understand that in carrying out the activities permitted hereby, the
Redeveloper proceeds at its own risk that it will not close on the purchase of the Phase I
Property; and as a result lose the benefit of such activities.
3. Right of Entrv. Subject to the limitations and preconditions hereinafter provided,
the HRA hereby grants to the Redeveloper the right to enter upon the Property to perform the
grading and utility and related work which is shown and described in the permit issued by the
City and in the approved plans which were submitted together with the permit application ("Site
JBD117822 2
RC125-66
r,
t
i
Work") and to do all things reasonably necessary and convenient in connection with carrying out
such work.
4. Preconditions. The rights to be granted hereunder shall not be granted until all of
the following preconditions have been met:
(a) The parties agree to the terms of a tree protection plan;
(b) Redeveloper provides the HRA with an irrevocable Letter of Credit in the
amount of $
(c) Redeveloper furnishes the HRA with evidence of insurance policies in
amounts and containing coverages reasonably acceptable to the HRA.
5. Letter of Credit. (A) The Letter of Credit described in paragraph 4(b) shall be
in a form acceptable to the HRA and shall serve as security for the following obligations:
(a) Redeveloper shall pay and satisfy any claims by contractors or materialmen
• involved in the Site Work;
(b) Redeveloper shall reimburse the HRA for any site protection work which
is necessary as a result of the Site Work in the event that the Property does. not close;
(c) Redeveloper shall reimburse the HRA for the replacement cost of any trees
which are removed in connection with the Site Work in the event that the Property does
not close;
(d) Redeveloper shall reimburse the HRA for staff and consultant expenses and
costs incurred in connection with allowing for the early start;
(e) Redeveloper shall reimburse the HRA for the cost of the endorsement
described in 5(C)(b) and 5(C)(c).
(f) Redeveloper shall reimburse the City for costs incurred in connection with
the review of building permit submittals..
JBD117822 3
RC125-66
..
(B) The HRA or the City shall be entitled to draw upon the Letter of Credit in the
event of the Redeveloper's failure to perform any of the obligations described m paragraph SA
but only following 30 days prior written notice of such failure from the HRA or the City to the
Redeveloper.
(C) The Letter of Credit, or underdrawn portion shall be released upon the happening
of any of the following:
(a) closing on the Phase I Property between the. HRA and Redeveloper;. and
(b) issuance by Old Republic Title Insurance Company ("Title Company") of
an endorsement to an owner's policy to the effect that it will insure title to the Phase II
Property against any claims occasioned by or arising out of the Site Work, or
(c) issuance of such an endorsement by the Title Company applicable to the
• Property in the event the closing contemplated in (d) above does not occur.
6. Indemnity. Redeveloper hereby mdemnifys, holds harmless, agrees to defend the
HRA, the City of Richfield and their respective officers, agents and employees from any claim
of whatever nature occasioned by or arising out of the Site Work.
7. Term. The right of entry shall commence upon the date on which all of the
preconditions have been satisfied and the Redeveloper has obtained its permit and shall terminate
on March _, 1997 unless this agreement or the closing is extended by the mutual agreement
of the parties.
8. Limitations. The right of entry shall be subject to the following limitations:
9. Value. In addition to the understandings contained in Paragraph 2, the
Redeveloper further acknowledges that in the event closing of the Phase I Property does not take
,ieDii~a22 4
RC125-66
~~
e
place, it shall have no claim, whether by set off or otherwise, for any value which the Site Work
may add to the Property.
IN WITNESS WHEREOF, the parties have set their hands as of the day and year first
above written.
' THE HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF
RICHFIELD, MINNESOTA
By
Its
By
Its
MERIDIAN PROPERTIES REAL ESTATE
DEVELOPMENT L.L.C.
ay
STATE OF MINNESOTA )
SS
COUNTY OF )
Its
The foregoing instrument was acknowledged before me this day of ,
1997, by and ,the Chairperson and Executive
Director of The Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota.
Notary Public
JSD117822
RC125-66
5
~,
STATE OF MINNESOTA )
SS
COUNTY OF HENNEP]N )
The foregoing instrument was acknowledged before me this day of ,
1997, by ,its of Meridian
Properties Real Estate Development L.L.C. a Minnesota limited liability company, d/b/a TOLD
Development Company.
Notary Public
r~
JBD117622
RC125-66
6
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 9
Agenda February 18, 1997
Issue Statement:
Authorization of a resolution approving the Hennepin County HRA as a lender for Minnesota
Housing Finance Agency programs.
Background:
The Hennepin County Housing and Redevelopment Authority (HCHRA) has been designated
by the Minnesota Housing Finance Agency (MHFA) as an approved lender for its home
improvement loan programs. Programs included are the Fix-Up Fund and Home Energy
Loans.. The Fix-Up Fund is a loan of up to $15,000 for income eligible homeowners. The
interest rate ranges from two to eight percent, depending on income, The Home Energy
Loan is a loan up to $5,000, specifically for energy related improvements. The interest rate
is eight percent. Currently, Fix Up Fund and Home Energy loans are available at
participating banks. The HCHRA would be another available lender for residents to choose.
All communities with an active HRA who would like to allow HCHRA to provide loans in their
community must pass a resolution requesting those services. HCHRA's initiatives in
Richfield would be limited to providing home improvement loans. This allows residents as
many opportunities and lenders as possible to obtain loan funds.
Recommended Motion:
Authorize resolution requesting the Hennepin County HRA to administer MHFA home
improvement loan programs in the City of Richfield.
Basis of Recommendation:
1. Informing residents of available MHFA loan products and participating lenders is
complementary to the community's remodeling programs.
2. Authorizing HCHRA will provide residents with another lender option.
3. The City of Richfield has an active HRA and therefore, any activity by the HCHRA in
Richfield must be authorized:
Alternative Recommendation:
Do not authorize HCHRA to provide MHFA loans to residents.
Discussion/Decision Mode:
Funds are available to HCHRA now. Loan originations for residents could begin immediately
after authorization.
Res tfully submitted,
Jam D. Prosser
Executive Director
JDP:ds
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE, HENNEPIN COUNTY HOUSING AND
REDEVELOPMENT AUTHORITY TO ADMINISTER MHFA HOME IMPROVEMENT LOAN
PROGRAMS IN THE CITY OF RICHFIELD
WHEREAS, the Hennepin County Housing and Redevelopment Authority (HCHRA) is
an approved lender for Minnesota Housing Finance Agency (MHFA) Home Improvement
Loan Programs; and
WHEREAS, eligible homeowners may apply and receive home improvement loans
under MHFA Home Improvement Loan Programs through the HCHRA; and
WHEREAS, the Housing Authority in and for the City of Richfield would like to access
these housing resources to meet the needs of its. residents.
NOW, .THEREFORE, BE IT RESOLVED that in accordance with MSA 3836.77,
Subdivision 2, the Housing Authority in and for the City of Richfield requests the Hennepin
County Housing and Redevelopment Authority administer MHFA Home Improvement Loan
Programs in the City of Richfield.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of February, 1997.
•
Thomas E. Harms, Chair.
ATTEST:
Michael Sandahl, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
" HRA Letter No. 8
Agenda February 18, 1997
Issue Statement:
Resolution authorizing issuance of completion certificates to Steven Marlin Grant Homes,
Inc. for 6824 Queen Avenue and 6621 Girard Avenue; to Variety Homes, Inc. for 2513 West
70th Street; to Timothy S. Crombie Construction for 2916 West 71-1 /2 Street; and to Sussell
Corporation for 7344 Bryant Avenue.
Background:
The HRA authorized development of the above referenced properties. The development
agreements provide for the issuance of a certificate of completion when construction is
completed. (A sample certificate is attached.)
All homes have been completed except for concrete steps.and walks, driveways and
landscaping. Escrows-have been retained to cover these items. The builders have
requested the release of the letters of credit and the completion certificates upon completion
and closing. Staff is anticipating this request and wants to respond in a timely manner upon
verification of completion.
Recommended Motion:
Authorize the Chair and Executive Director to execute completion certificates in accordance
to the attached resolution.
Basis of Recommendation:
1. Construction has been completed and certificates of occupancy have been issued by
the City's Inspection Division.
2. The builders -have performed in accordance with construction agreements and will seek
the issuance ~of completion certificates and the release of performance security in the
following amounts:
Builder
Steven Marlin Grant Homes
Steven Marlin Grant Homes
Variety Homes
Timothy S. Crombie
Sussell Corporation
Property
6824 Queen Avenue
6621 Girard Avenue
2513 W. 70th Street
2916 W. 71 1 /2 Street
7344 Bryant Avenue
Performance Securi~[
$30,000
$26,000
$32,000
$32,000
$30,000
Alternative Recommendation:
Do not issue certificates of completion at this time.
DiscussionlDecision Mode:
This matter will be presented at the February 18 HRA meeting.
Respe tfull submitted,
James' .Prosser
Executive Director
JDP:ds
HRA RESOLUTION NO.
•
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
RESOLUTION AUTHORIZING THE ISSUANCE OF COMPLETION CERTIFICATES FOR
RICHFIELD REDISCOVERED PROPERTIES AT 6824 QUEEN AVENUE, 6621 GIRARD
AVENUE, 2513 W. 70TH STREET, 2916 W. 71 1/2 STREET AND 7344 BRYANT AVENUE
WHEREAS, the Richfield Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) entered into contracts with Steven Marlin Grant Homes, Inc.,
Variety Homes Inc., Timothy S. Crombie Construction and Sussell Corporation for the
construction of single family homes; and
WHEREAS, the new home locations are as follows: 6824 Queen Avenue, 6621 Girard
•
Avenue, 2513 West 70th Street, 2916 West 71-1/2 Street and 7344 Bryant Avenue; and
WHEREAS, performance security in the following amounts can be released to the
respective builders:
6824 Queen Avenue - $30,000
6621 Girard Avenue - $26,000
2513 West 70th Street - $32,000
2916 West 71-1/2 Street - $32,000
7344 Bryant Avenue - $30,000
Steven Marlin Grant Homes
Steven Marlin Grant Homes
Variety Homes
Timothy S. Crombie Construction
Sussell Corporation
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield,
Completion certificates can be issued for 6824 Queen Avenue, 6621 Girard Avenue,
2513 West 70th Street, 2916 West 71-1/2 Street and 7344 Bryant Avenue.
2. The performance security can be released for all properties when the completion
certificates are issued.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of February, 1996.
Thomas E. Harms, Chair
ATTEST:
• Michael Sandahl, Secretary
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that has fully and completely complied with
its obligations under Article IV of .that document entitled "Contract for Private .Development",
between the Housing and Redevelopment Authority. in and .for the City of Richfield, Minnesota
and dated ,filed
as Document No. with respect to construction of the Improvements at
legally described as in accordance with the
approved construction plans and is released and forever discharged from its obligations to
construct under such above-referenced Article.
Dated:
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
By
Its Chairperson
By
STATE OF MINNESOTA )
SS
COUNTY OF HENNEPIN )
Its Executive Director
The foregoing instrument was acknowledged before me this
~ 9 . by
day of
and the Chairperson and Executive Director of .the
Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate
and politic under the. laws of the State of Minnesota on behalf of the public body corporate and
politic.
Notary Public
This instrument was drafted by:
The Housing and Redevelopment Authority
in and for the City of Richfield
67090 Portland Avenue South
Richfeld, MN 55423
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. ~
Agenda February 18, 1997
Issue Statement:
Consideration of resolution authorizing purchase of 6320-15th Avenue and 6921-12th
Avenue under the New Home Program and Richfield Rediscovered, respectively.
Background:
The following properties are owned by the Department of Housing .and Urban
Development (HUD). The properties have been offered to the HRA for purchase at a
ten percent discount. Contracted HUD appraisers provide an appraised value for each
property. HUD staff then apply a ten percent discount for the HRA. The discounted
purchase prices are as follows:
Address Purchase Price
6320-15th Avenue $50,400
6921-12th Avenue $61,200
The properties have been determined to meet program requirements for acquisition.
The property at 6320-15th Avenue is a good candidate for the New Home Program and
could. be purchased with CDBG funds pending an environmental assessment. The
property at 6921-12th Avenue would- be marketed under the Richfield Rediscovered
Program. A description of existing conditions at each property is attached.
Recommended Motion:
Adopt the resolution authorizing:
1. The purchase of the properties at 6320-15th Avenue for $50,400 and 6921-12th
Avenue for $61,200.
2. The Executive Director and HRA Chairperson to execute purchase agreements
and other documents to effectuate the purchase.
Basis of Recommendation:
1. The properties meet program requirements for acquisition.
2. Funding for Richfield Rediscovered acquisition is available.
3. CDBG funds are available fora 1997 New Home Program acquisition.
4. HUD is offering the properties to the HRA at amounts discounted from their
appraised values.
Alternative Recommendation:
Do not authorize acquisition.
Discussion/Decision Mode:
Agreements to purchase the properties are ready to be prepared in final form.
Respectfully submitted,
Jam D. Prosser
Executive Director
JDP:ds
•
•
SUMMARY OF PROPOSED PROPERTY ACQUISITIONS
6320 15th Avenue. The house is a single level home with a tuckunder single car
garage. The tuckunder garage is highly prone to storm. water access and needs repair
to its floor, exterior wall and new doors. An addition was added on the back of the
house over the tuckunder which was poorly done. A large, overbuilt deck which needs
repair surrounds the south and west sides of the house. All interior surfaces are in poor
condition and extensive repairs are needed to bring it up to marketable condition, such
as replacing the windows, replacing the heating system, alleviating a wet basement,
and updating all floor coverings and painting.
6921 12th Avenue. This 858 square foot house has many internal problems. The
electric system needs repair to meet code and the heating system consists of an oil
boiler and a wood burner, both of which need certifying or preferably removal. The
interior finishes need updating and the windows have varying degrees of rot. An
overbuilt garage to the rear of the property also has electrical problems, rotted windows
and exposed and rotted sheathing.
C~'
•
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTIES LOCATED AT
,6320-15th AVENUE-AND 6921-12th AVENUEFOR THE NEW HOME PROGRAM AND THE
RICHFIELD REDISCOVERED PROGRAM RESPECTIVELY
WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of
the Richfield Rediscovered Redevelopment Project (Project) heretofore adopted by the City
of Richfield (City) and the HRA, said real properties being described as follows:
Property Address Legal Description
6320-15th Avenue Lot 6, Block 2, Nokomis Gardens Rearrangement of Block
1, 2, 3, 4, and 5, Girard Parkview Addn
6921-12th Avenue Lot 6, Block 4, Richlands Addn.
WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire
real property within its area of operation; and
WHEREAS, the properties meet all program requirements for acquisition; and
WHEREAS, the purchase price offered by HUD (the seller) is discounted. by ten
percent of the HUD appraisal; and
WHEREAS, funds have been provided by the HRA and are available for acquisition.
NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and '
Redevelopment Authority:
The purchase prices are approved as follows:
Address
6320-15th Ave.
6921-12th Ave.
Purchase Price
$50,400
$61,200
2. The Chairperson and Executive Director are authorized to execute a Purchase
Agreement and other documents to effectuate purchase for the amounts set
forth in this resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of February, 1997.
ATTEST:
Thomas E. Harms, Chair
Michael Sandahl, Secretary.
HOUSING AND REDEVELOPMENT AUTHORITY
• HRA Letter No. 6
Agenda February 18, 1997
Issue Statement:
Acceptance of a report on senior housing needs entitled "Senior Housing Market Analysis
and Demand Estimates for Richfield, Minnesota."
Background:
Maxfield Research Group was retained by the HRA to examine the demographic and
competitive factors that influence the potential for the development of senior housing in
Richfield. Senior housing is a type of housing for persons age 65 and over.
An August 1996 review by the HRA of the initial draft report identified items requiring further
analysis. The major questions were:
What are the benefits to the City in providing additional senior housing?
2. What are. the cost impacts to serve the senior population following development?
3. How can the HRA ensure that Richfield seniors are served by new Richfield
developments?
• 4. How can the HRA ensure that families benefit from senior owned single family homes
as moves are made?
The summary of findings was expanded and an additional section of the report was added.
concerning the above topics.
Some key findings of the additional analysis follow:
Seniors contribute much in intangible benefits: property tax revenue to schools, purchase
of goods and services, a high rate of volunteerism.
• The primary city costs of serving the five existing senior populations in identified buildings
is no greater than services provided in general to the community.
Specifically, an evaluation of public safety emergency responses and recreational
services show no major impacts. The five senior communities at Lake Shore Drive,
Village Shores, Woodlake Point, Richfield Towers, and Richfield Health Center represent
five percent of the housing stock, but only three percent of the total emergency response
calls.
• The Community Center serves three functions: senior recreation, special needs adaptive
recreation and as a building resource for other community uses. Aside from program
staffing costs, senior programs are provided on a fee basis which recovers costs.
• Seniors responding to new development opportunities in Richfield and selling single
family homes can be linked closely to the HRA's remodeling advisor, transformation and
purchase/remodel resources that appeal to families.
• A preference .system marketing strategy for residency in new developments has been
used elsewhere and successfully reached community senior populations before senior
populations in general were served.
Looking forward, the additional study did point out:
• It is more efficient to serve seniors in senior buildings than in scattered neighborhood
block locations. New senior housing could be served with existing public safety
resources.
• More could be done to encourage new senior housing developments to rely on City
recreational services rather than providing those in-house. Senior developments which
otherwise become isolated over time are better integrated into the community.
If there is continuing concern about costs related to a given new development, a
development agreement could require a municipal services cost sharing component. This
does not appear to be necessary.
Recommended Motion:
Accept the report to be utilized as a guideline for considering future senior housing needs
and opportunities in the City of Richfield.
Basis of Recommendation:
1. Gathering accurate information regarding senior housing options helps the City attract
appropriately sized and designed senior housing.
2. The HRA and City Council are anticipating senior housing development proposals in the
near future.
3. The report responds to an HRA request for information regarding this topic.
Alternative Recommendation:
1. 'Request additional study and analysis.
Discussion/Decision Mode:
Tom Melchoir, Maxfield. Research Group's Executive Director, will be at the HRA meeting to
present the study and respond to any questions.
Respectf y submitted,
Jame .Prosser
Executive Director
JDP:ds
Senior Housing Market Analysis and
Demand Estimates for
:__ -.-
Richf eld,~ Minnesota
Prepared for:
Richfield HRA
Richfield, Minnesota
August 1996
FIELD
RESEARCH
GROUP
rtl'.=,RTiiE\T _,:=:~I:C}\, iN<...
•
August 7, 1996
Mr. Bruce Nordquist
City of Richfield
Housing and Redevelopment Authority
6700. Portland Avenue South
Richfield, Minnesota 55423
Dear Mr. Nordquist:
Attached is our market study examining demand for senior housing in Richfield, Minnesota. The
study examined growth trends and demographic characteristics of the senior (age 65 and over)
population, housing alternatives for seniors in the area (including data'on nursing-homes), and our
estimate of demand for senior housing in Richfield. -Also included are detailed site criteria for future
-_ site analyses.
Our research indicated that demand exists for 120 to _130 units of either subsidized senior or afford-
- able senior housing in Richfield... We also found that no demand currently exists formarket rate
senior rental housing, however, demand for this type of housing. will exist after 1998.: Finally, de-
mand was found for 98 units of assisted living housing with moderate fees.
We have recommended the development of 70 to 80 units of assisted living housing with moderate
monthly fees and an 80- to 100-unit project of either subsidized or affordable'senior housing units.
This demand may be met in part, by 25 to 30 units of moderate-rent cottage-style townhomes.
Detailed findings and recommendations are included at the end of the report. We have enjoyed com-
pleting this study for the Richfield Housing and Redevelopment Authority .and are available to an-
swer any questions you may have regarding our research or findings.
Sincerely,
MAXFIELD RESEARCH GROUP
A Division of Apartment Search, Inc.
~ Thomas R. Melchior
Executive Director
TRM/ha
612-338-0012
612-338-0659 FAX
~:
~.. -
Heidi A.H. Albers `~
Research Analyst
..~-
j i ! i
_.._ ..
E
f
.....
620 KICKERNICK,430 FIRST AVENUE NORTH
MINNEAPOLIS, MINNESOTA 55401
TABLE OF CONTENTS
Page
SUMMARY OF FINDINGS .............................................................................................. 1
PURPOSE AND SCOPE ..................................................................................................... 8
METROPOLITAN SETTING ............................................................................................. 9
Histo ................
ry ............................................................................................................. 9
Quality of Life ................................................................................................................. 9
Economic and Business Climate ..................................................................................... 9
Transportation ................................................................................................................. 11
Employment .................................................................................................................... 11
Education ......................................................................................................................... 13
Sports/Recreation ............................................................................................................ 13
-_ Cultural ............................................................................................................:..............: 14
Population, Household, and Employment Growth Trends ............................................. 14
SITE CRITERIA.:: ...........................................................................................:................... 17
Introduction ...............................................:..:.................................................:............... 17
Interviews ..................................................................................................:..................... 17
Important Site Characteristics -Independent Living Housing ....................................... 18
Important Site Characteristics -Assisted Living Housing .................:.:......................... 19
DEMOGRAPHIC ANALYSIS ........................................................................................... 21
Study Area Definition ..................................................................................................... 21
Population, Household, and Employment Trends ........................................................... 21 _
Senior (Age 65 -and Over) Population Growth Trends .................................................... 27
Senior (Age 65 and Over) Household Growth Trends ................................................... 27
Adult (Age 45 and Over) Age Distribution ..................................................................... 30
Senior (Age 65 and Over) Population and Household Projections ................................. 30
Senior (Age 65 and Over) Household Income ..............................................:................. 35
Senior (Age 65 and Over) Household Tenure .............:................................................... 37
Single-Family Home Sales .....................................................................................:........ 37
SENIOR HOUSING MARKET REVIEW ......................................................................:.:. 43
Overview of Senior Housing Trends in the Twin Cities Metropolitan Area .................. 43
Major Senior Housing Market Classifications ................................................................ 45
First Quarter Senior Housing- Update -Twin Cities Metropolitan Area ......................... 46
Recent Development Trends in the Twin Cities Metropolitan Area ............................... 48
Subsidized Senior Rental Projects in the Study Area ..................................................... 52
Market Rate Senior Housing ........................................................................................... 55
Non Age-Restricted Rental and For-Sale Multifamily Housing ..................................... 74
C7
TABLE OF CONTENTS (Continued)
Page
Pending Projects ..........................................:.:..........:...........:..........:...............:........,...... 74
Community Interviews .................................................:.:....:.......:....:..............,............... 75
•
LONG-TERM CARE REVIEW ...................................................................:...................... 78
Nursing Homes .....................................::..................................:.........................:............ 78
Board and Care.Facilities .................:.......:......:........:.............:..............:......................... 81
COh~IlvILINITY ISSUES RELATED TO SENIOR HOUSING ......:.........:...: ....:................ 83
. ............................... ...:............. ..................:..... .... ..........
:
Introduction 83
... .
.
Benefits of Senior Housing ........::......:.................... ..............:...............:.::..........:.. 83
Creating Family Housing Opportunities ............: .....:.............................. ....:.:............ 83
Seniors Residing in NORCs (Naturally Occurring Retirement Communities) .......::...: 84
~- Strategies to Ensure Richfield Seniors Benefit From New Senior Housmg
.Development ..............:...:....:.....:.....................:..::......................::.............:..,:....:...: 85
g P Y P g .......:........
-= Conversion of Existin General Occu anc A artments to Senior Housin
86
CONCLUSIONS AND RECOMMENDATIONS .....................:.............:.....:................ 88
Introduction ...:..: .............:.............:........:.:..:.......:.. .......: .....:..............................:.... 88
...........................................................
Independent Living Senior Housing Demand.
89
::.,:: ................:... ...
Assisted Living Demand....:.....:. 96
1
Demand for Long-Term Care Facil ty ..................::................:.....:.......:...............:.... 101
SUGGESTED HOUSING DEVELOPMENT PLAN ...........:................:.:....................... 102
Introduction .................:............. ...:..... ...:............. ::............:.........:.::...................... 102
Senior Rental Development ....... ...:: .........:...............................:......:.:....:..........::...... 102
Location of Multifamily Development ...........................:....::.....:................................... 103
Implementation of Recommendations ....:..:.....:...::........: ............................................ 103
APPENDIX ................................:..:.......:...........:.....:..........................................................:. 105
A List of Interviewees .........................:....................................,..................................... 106
B Survey of Woodlake Point Residents .:..........:........: .................................................... 107
C Senior Housing Cost/Revenue Analysis.......:......: ..................................:.::...............:. 113
•
LIST OF TABLES
Table Number and Title Paee
1 Seven-County Twin Cities Metro Area, Covered Employment (000's), 1980
to 1994 ............................................................................................................. 12
2 Seven-County Twin Cities Metro Area, Population, Households, and
Employment, 1970 to 2020 .............................................................................. 15
3 Population Trends, Richfield Study Area, 1980-2010 ..................................... 23
4 Household Trends, Richfield Study Area, 1980-2010 ......................................... 24
5 Employment Trends, Richfield Study Area, 1980-2010 ..................................... 25
6 Senior (Age 65 and Over) Population Growth, Richfield Study Area, 1980
and 1990 ......................................................................................................,.... 28
7 Senior (Age 65 and Over) Household Growth, Richfield Study Area, 1980
and 1990 ............................................................................................:.:............ 29
8 Older Adult- (Age 45 and Over) Age Distribution, Richfield Study Area, 1990. 31
- 9 Senior (Age 65 and Over) Population Projections, Richfield Study Area,
1980 to 2010 .................................................................................................... 32
10 Senior (Age 65 and Over) Household Projections, Richfield Study Area,
1980 to 2010 .................................................................................................... 33
11 Household Income, Richfield Study-Area, (Number and Percent of Households),
1995 .................................................................................................................. 36
12 Senior (Age 65 and Over) Household Tenure, Richfield Study Area, 1990........ 38
13 Resale Housing Market Data, Richfield Study Area, 1993 -May 1996 .............. 39
14 Senior Housing By Quadrant By Service Level, Twin Cities Metro Area, First
Quarter 1996 .................................................................................................... 46
15 Vacant Senior Housing Units, By Service Level By Quadrant, Twin Cities
Metro Area, First Quarter 1996 ........................................................................ 47
16 Number of Units By Year Built, Senior Housing Projects, Twin Cities Metro
Area, First Quarter 1996 ...................................................:.............................. 49
17 .Subsidized Senior Rental Housing Projects, Study Area, June 1996 .................. 53
18 Market Rate Senior Housing Projects, Unit Comparison, Study Area,
June 1996 ......................................................................................................... 56
19 Market Rate Senior Housing Projects, Services/Amenities Comparison, Study
Area, June 1996 .............................................................................................. 64
20 Nursing Homes, Richfield Study Area, June 1996 .............................................. 79
21 .Subsidized Senior Rental Housing Demand, Richfield Study Area, July 1996 .. 90
22 Market Rate Rental Housing Demand, Richfield Study Area, July 1996............ 91
23 Suggested Development Concept, Cottage-Style Townhomes, Richfield, July
1996 .................................................................................................................. 94
24 Assisted Living Housing Demand, Richfield Study Area, July 1996 .................. 97
25 Suggested Development Concept, Assisted Living Facility, Richfield, July 1996 99
A-A Previous Place of Residence, Woodlake Point Resident Survey, July 1996 ....... 107
A-B Most Attractive City Chazacteristic, Woodlake Point Resident Survey, July 1996 108
LIST OF TABLES (Continued)
Table Number and Title Page
A-C -Area Dislikes/Concerns, Woodlake Point Resident Survey, July 1996 ............... 110
A-D Preferred Future Senior Housing bevelopment Types,. Woodlake Point Survey,
July 1996 .......................................................................................................... 1.10
•
SUMMARY OF FINDINGS
• Maxfield Reseazch Group was retained by the Richfield Housing and Redevelopment
Authority to examine the demographic and competitive factors that influence the potential for
the development of senior housing in Richfield, Minnesota. Senior housing is for persons
age 65 and over.
Community Issues Related to Senior Housing
• A number of benefits result from the development of senior housing in a community. These
include: 1) increase in the property tax base; 2) providing senior residents with housing op-
tions not currently available in the community; 3) seniors who remain in the community will
purchase goads and services in the community; 4) seniors who move from their single-family
homes provide a housing option for younger persons seeking to live in the community and; 5)
seniors aze a community asset; they have the highest rate of volunteerism of any age group.
q_ • As with all t}~pes of real estate development, there are costs associated with development of
senior housing. However, the costs to government of senior housing aze not significantly
higher than the costs other types of development. A review of costs associated with senior
housing is presented in the appendix to this report.
• The City of Richfield can participate in the process of linking the sale of seniors' homes
(when they move to alternative housing) to the purchase of these homes by younger families.
The City can work with the developers of senior housing and local real estate agents, making
them aware of city-sponsored financing programs for remodeling. Richfield's seniors, or the
younger buyers purchasing their homes, can utilize Richfield's remodeling and transforma-
tion programs to upgrade their housing.
• Many market rate general occupancy buildings have aging residents, many of whom have
lived in the building for many years and aze now retired. These buildings aze referred to as
Naturally Occurring Retirement Communities or NORCs. As long as these residents remain
totally independent, these buildings will serve their housing needs. To ensure that aging, frail
seniors can remain in these buildings, some renovation will need to be completed as well as
the addition of support services. Utilizing the services available from local community or-
ganizations could fulfill the demand for services from aging seniors. The ability to provide
services given the physical structure of older buildings as well as other changes required to
become "senior-friendly" may be cost-prohibitive or less desirable than anew-construction
senior project.
• In order to help ensure that a senior building assisted financially by Richfield serves Rich-
field seniors, the City could establish a preference system for residency. The City of Ply-
mouth used such a system for Plymouth Towne Squaze when it was mazketed in 1994. Sev-
eral chazacteristics were used in formulating the preference system, namely,. that preference
be given to low- or very low-income .seniors who were current residents of the city, followed
by family members of Plymouth residents. The systeiril proved. successful with 70 percent of
the residents moving from within Plymouth and 27 percent being relatives of current Ply-
mouth residents.
• Conversion of existing buildings is one way to satisfy demand for senior housing in Rich-
field. Besides providing needed housing for seniors, this serves to respond to shifting demo-
graphics being experienced by the entire metropolitan area; that is, the aging of the popula-
tion base and a corresponding decline in demand for rental housing-from younger persons.
• There are a number of challenges to converting an existing building. 1) The building must
have a location desirable to seniors. 2) The cost of conversion is often a barrier for the. pri-
vate sector to complete such a project. 3) Rents after conversion must be appropriate for the
mazket. The-`cost of conversion on a per unit basis could exceed $20,000. Combined with
the cost of acquisition, significant rent increases may be required to make the conversion
work financially. High rents may limit the market for the project.
,- • The HRA also requested information on 1) the impact of Section 8 vouchers for seniors on
the demand for senior housing and 2) what proportion of residents of existing senior
buildings were from Richfield. These issues aze addressed in the body of the report. "
Demographic Review
• In order to determine the level of,demand for senior housing, growth trends and other demo-
graphic factors. were examined for a study area determined to be the primary draw area for
senior housing in Richfield. The study area was broken down to include a primary market
area (PMA) and a secondary market area (SMA). The PMA includes the City of Richfield.
The SMA consists of the southern portion of Minneapolis, the southeastern portion of the
City of Edina, and the central and eastern portions of the City of Bloomington.
• Since Richfield is a fully developed,. first-ring suburb, growth has been and will likely con-
tinue to be, relatively modest. During the 1980s, Richfield's population declined by 5.7 per-
. cent. However, its household base grew by 1.9 percent during the decade. Forecasts reveal
that the area should remain stable or experience slight growth. in population, households, and
employment through the 1990s and into the 2000s, as redevelopment occurs.
• Seniors comprised a significantly higher proportion of Richfield's population (16.9 percent)
and household base-(26.0 percent) and the study area's population (15.6 percent) and house-
hold base :(24.0 percent) than the metro area as a whole (9.8 and-16.5. percent, respectively) in
1990. In Richfield, the number of seniors increased by 52.6 percent and the number of senior
households grew by 56.4 percent during the 1980s. These rates of increase were greater than
the SMA, however, they were smaller numerically, because of the greater size of the SMA.
•
2
• Richfield and the study azea's increase in seniors has been attributed, in part, to the lazge
number of senior units at Village Shores, Lake Shore Drive, and Woodlake Point in Richfield
which have attracted- seniors from outside the study area. Independent senior projects typi-
cally attract 25 percent or more of their residents from outside the community and assisted
living projects typically attract as many as 50 percent of their residents from outside the
community. In order to better serve the residents of their community, some cities have be-
come partners in the development of senior housing and established a priority entrance sys-
tem. These systems give priority entrance to their residents, present and former, as well as
senior parents of community residents. A moderate-rent senior building in Plymouth, Ply-
mouth Towne Squaze, successfully uses this priority system.
• Senior population and household forecasts, based on the aging of the current senior base, re-
veal that the study azea will likely see no net change in senior population between 1990 and
2010. An increase will occur in the senior population and household base through the re-
mainder of the decade, an increase of 12.6 percent in senior population and. an increase of
17.3 percent in senior households. However, during the 2000s, the study azea's senior
population base should decline by 9.5 percent and the senior household base should decline
by 8.3 percent. The SMA will account for the majority of the study area increase during the
1990s and experience the majority of the decline during the 2000s. It should be noted that
these forecasts.do not take into .account any migration that might occur and thus, in the ab-
sence of any new senior housing developments, these increases may not be realized.
• A review of household incomes showed that 21.8 percent of the study area's senior house-
holds in 1995 earned less than $15,000 per year. This is the primary mazket for subsidized
housing. In Richfield, this figure was 21.9 percent of the total senior households. In con-
trast, 58.5 percent of the study area's senior households in 1995 would be able to afford maz-
ket rate senior housing without financial assistance. These households had annual incomes of
$25,000 or more. In Richfield, 54.7 percent of seniors had incomes over $25,000 per-year.
Households earning between $15,000 and $24,999 may be able to afford market rate housing,
particulazly if they could use the proceeds from the sale of their home.
• The Census showed that 77.8 percent of study area seniors and 80.7 percent of Richfield's
seniors owned their housing in 1990. Subtracting the senior households at Lake Shore Drive
and Woodlake Point (335 total households) results in a 78.9 percent ownership rate in Rich-
field. This is still a very high ownership rate. These seniors could supplement their income
by investing the proceeds from the sale of their homes and using the interest from this in-
vestment to help support alternative housing.
• A review of re-sale data from the Regional Multiple Listing Service (MLS) showed that the
median selling price of a home in Richfield was $97,000 for the first five months of 1996.
The MLS data indicated that home values in the study azea have steadily increased and maz-
ket times have declined over the last three years. As a result, seniors should be able to sell
their homes in a reasonable amount of time should they desire to move to alternative housing.
If the proceeds from the sale of a senior's home at the median price ($97,000) are invested at
6.0 percent for example, a senior would have $450 extra per month to allocate towazd
3
housing costs. This interest rate is a typical yield for government-issued bonds and could be
higher or lower, depending on-the investment and the tem:
Senior Housing Market Review
• A survey of the study area's subsidized senior rental projectsindicated that the seven. projects
have a total of 851 units and a vacancy rate of less than 1.0 percent. Richfield Towers with
150 units, is the only subsidized project in. Richfield.. There are also an estimated 90 seniors
receiving Section 8 vouchers in other Richfield rental units.
• A total of 25 market rate senior projects in and near the study area were surveyed. These
projects included 16 market rate senior rental buildings and nine ownership projects. To-
gether, they had a combined total of 3-,841 units, of which 114 were vacant. This equals a
vacancy rate of 3:0 percent. These vacancies include Rosewood Estates.- Highland Pazk,
- which is located just outside of the: study azea. The project is .still in its initial lease-up period
and accounted for 56 of the 114 vacancies. Excluding. this project, the remaining .projects ,
-.-~ had a vacancy rate of only 1.6 percent. A vacancy rate of 5.0 percent is' considered. ideal for
market rate rental projects in a healthy market and allows for consumer choice and unit. turn-
.- -~ over. A vacancy rate below this figure typically indicates.pent-up°demand. -
• The only market rate rental building in Richfield is the lb7-unite Village Shores project, a -
congregate/optional services building. Overall, the study azea had just one"adult"/few serv-
icesproject, one congregate/optional-services project, two congregate/service-intensive proj-
ects and four assisted living projects. In addition, five ownership projects are located within
the study area, two of which are located in Richfield.
• .Two ownership projects in Richfield were built during the 1980s, Woodlake Point (157 units)
and Lake Shore Drive:(178 units). At thetime of the survey, one unit at each building was _
on the market. The resident profile includes many seniors from south Minneapolis who
moved to the building because of the lack of senior housing in their community: -.The two
projects are located on either side of 66th. Street, near Village Shores.
• The concentration of seniors at the intersection of 66th and Lyndale was noted as a cause for
concern for some senior residents and other interviewees because of safety and security is-
sues. However, there are many positives in having asenior-Type campus. For example, the
efficiency of service delivery is greater and the projects can act as feeders for the other prof-
ects in the. immediate area.
• According to interviews with city staff members, there are no planned or proposed senior
housing projects in Richfield, south Minneapolis, or Edina at this time. Two proposals for
senior housing in Bloomington are before the city, however, neither has yet applied for or re=
ceived the necessary approvals from the city.
4
• Maxfield Research Group surveyed 14 nursing homes in the study area and found that repre-
sentatives reported that occupancy rates had been stable lately and averaged 95 percent.
Richfield Care Center was the exception however, and has been averaging approximately 80
percent occupancy due in part to the increased use of home health care. Monthly fees of
between $1,770 and $2,220 were found at the projects, and 126 residents were reported to be
case mix "A" or "B," those needing low levels of care. Representatives agreed that approxi-
mately one-half of these residents would be better served at an assisted living project.
• Interviews with. community leaders indicated a need for more senior housing in the study
area. Real estate agents noted that approximately one-half of the seniors currently selling
their homes are selling by choice to move into apartments or out of the area. The other half
are being forced to move due to health reasons and are moving directly into long-term care
facilities. In addition, more seniors would be selling earlier if they had alternative housing
options. within their neighborhood.
• Interviews and the previous experience of Maxfield Research Group show that. seniors who
move out of their single-family home into an apartment most often do so because of security
.- and maintenance issues, rather than service needs.
• Subsidized senior housing has rents that are tied to residents' incomes and requires funding
assistance from government programs. Seniors with incomes below $15,000 per year would
qualify for subsidized housing. Affordable senior housing has below market rents that are af-
fordable to seniors with an annual household income between $15,000 and $24,999. If sen-
iors in either of these two income groups sold their home to move into senior housing, the
proceeds may be used from the sale to supplement their monthly income and they would be
able to afford more expensive housing.
Site Considerations
A good location is critical to the success of senior housing. Key factors to consider when ex-
amining asite for its potential. attractiveness for senior housing include such items as:
proximity to health care and support services, good access to public transportation,. proximity
to shopping, proximity to .services, good access, good visibility,: neighborhood atmosphere,
surrounding land uses/neighborhood appearance, and site amenities. It is important to exam-
ine site criteria for independent living and assisted living housing separately since they attract
different segments of the. senior market who will view site characteristics differently, based
on their lifestyle needs.
Demand Estimates/Development Recommendations
• Demand calculations identified a need for 130 to 210 subsidized senior units in Richfield in
the short-term (within three years). Based on these demand calculations and our community
interviews, we suggest the development of an additional 120 to 130 units of either subsidized
5
or affordable senior housing in Richfield.. The need for subsidized housing can be met in a
,,
number of ways. For example, if subsidies and government program funding are available, a
120- to 130-unit high rise project similar to Richfield Towers may be built.. Secondly, the
need for subsidized housing maybe met by the conversion of an existing apartment complex
to senior housing, iffinancially feasible, If the city assists in such a conversion, project-
based assistance could be provided. Finally, if site assembly is possible, the need for subsi-
dized housing may be met by the construction of affordable cottage-style rental townhomes.
• Because a portion of the demand for subsidized housing maybe served by the development
of affordable cottage-style townhomes, we have recommended the development of 25 to 30
modest-rent cottage-style townhomes. We recommend the project have one-third one-
bedroom units, one-third one-bedroom plus den units, and one-third two-bedroom units. The
units should have rents of between $525 and $700 per month ($.72 to $.77 per squaze foot).
• We believe that. an existing building could be converted to senior housing. Such a building
should have an appropriate unit mix, generally one-third to one-half one-bedroom units and
one-half to two-thirds two bedroom units. Because most existing buildings lack the typical
__ amenities found in senior projects, we recommend that the following be added: ample com- -
mon area lighting, refurbishment of units, addition of an elevator, provision of a lounge azea
__ near the entrance to the building and mailboxes; provision of a community room with an ad-
joining kitchen, ample storage elsewhere in the building, and garage parking.
• Based on demand calculations, we do not believe that demand exists at this time for mazket
rate independent senior housing. Short-term demand for market rate senior rental housing
has been met by Village Shores in Richfield.
• As current Richfield residents age in place and seniors with adult children living in Richfield
desire to move to Richfield, demand for market rate senior rental housing will continue to in-
crease :and a market rate senior building would be supportable in Richfield by 1999. We rec-
ommend that the city consider proposals with longer lead times for planning that would result
in a mazket rate project coming on-line in 1999. Based on demand calculations, we believe
demand will exist for approximately 120 units of mazket rate independent senior housing by
1999, or one-third of the remaining long-term demand. We recommend the development of a
110- to 120-unit project, either rental or ownership, in Richfield in 1999 or after to satisfy
this demand. If affordable housing is built in Richfield before 1999, this development will
take away a portion of the demand for both subsidized housing and mazket. rate housing.
• Non age-restricted, single-level townhomes built in Richfield may attract some seniors and
would provide another appropriate housing alternative for seniors looking to rid themselves
of home maintenance. This type of project, along with non age-restricted condominiums and
apartments, may also satisfy a portion of the demand for market rate independent senior
housing.
• Demand calculations of the age/income-qualified base for assisted living identified a need for
98 units of assisted living housing in Richfield in he short-term. However, we do not rec-
6
ommend the .development of 100 percent of this demand, but. rather, recommend the devel-
opment of an assisted living project of between 70 and 80 units.
• The recommended assisted living project is suggested to have a unit mix of approximately 30
to 40 percent studio units, 50 to 60 percent one-bedroom units, and 10 percent two-bedroom
units. The units should have monthly fees of between $1,400 and $2,000 and should include
60 meals per month, all utilities, weekly laundry and linen service, weekly housekeeping, 24-
hour emergency response, and organized activities. Optional services should also be made
available for an extra cost. The recommended monthly fees are at the lower end of the spec-
.from of monthly fees for assisted living projects in the southwest quadrant of the Twin Cities
area but reflect the more modest incomes and home values of seniors in Richfield compared
to other parts of the southwest area.
• The 66th and Lyndale intersection would be an appropriate location for a new assisted living
project in Richfield because of the concentration of services and other senior housing facili-
ties located. in the neighborhood. However, an assisted living project could be built on any
other serviceable and appropriate site in the city. If an assisted living project were developed
near the 66th and Lyndale intersection, it would make the area into a type of senior housing -~
campus which could serve to encourage seniors who need additional services and who cur-
rently live in Woodlake Point, Lake Shore Drive, and Village Shores to move nearby and re-
main in the community. Conversely, additional market rate independent senior housing
should be built elsewhere in any serviceable area in Richfield, preferably away from the 66th
and Lyndale intersection to provide potential residents with additional choice in site and
location amenities.
7
PURPOSE AND SCOPE
~~
Maxfield Reseazch Group was retained by the City of Richfield to examine the demographic and
competitive factors that influence the potential for development of senior (age 65 and over)
housing in Richfield, Minnesota.
The scope of this study includes: development of guidelines for choosing a good senior housing
site; an overview of growth trends; an analysis of the .demographic composition of the older adult
population and senior household projections for the next fifteen years; a comprehensive analysis
of the housing mazket including single-family home sales, senior housing mazket conditions and
pending rental developments in the study azea; and interviews with members of the community
familiaz with the needs of seniors such as church pastors, social service workers and others famil-
iaz with senior housing and support service needs. The conclusions and recommendations sec-
tion focuses on estimating the demand for mazket rate senior rental housing in the study area,
suggesting development concepts most appropriate for the market and evaluating the potential
for conversion of existing general occupancy rental units to senior housing.
This report contains primazy and secondary reseazch. Primary research includes interviews with
-.. persons who aze involved in the housing mazket, as well as data on senior rental projects. Sec-
ondary reseazch is credited to the source when used, and is usually data from the U.S. Census or
the Metropolitan Council. Secondazy research is used as a basis for analysis, and is reviewed in
light of other factors which could affect projections such as migration trends. The data on com-
parable rental projects and pending developments was collected by Maxfield Reseazch Group
and is accurate to the best of our knowledge.
•
8
METROPOLITAN SETTING
History
The development of the Twin Cities Metropolitan Area began during the 1820's with the estab-
lishment of Fort Snelling. The region was inhabited prior to this time for thousands of years by
Native Americans, primarily the Mdewakanton Dakota. Minneapolis-St. Paul thrived during the
1850s and 1860s. St. Paul developed as a river. port for goods being transported from the south
because of its location on the Mississippi River. Minneapolis grew industrially by harnessing the
power of St. Anthony Falls just a few miles upriver from St. Paul.
Minnesota was developed because of its natural resources. Forests supplied much of the lumber
that helped build. distant cities like Omaha and St. Louis. Agribusiness later assumed a greater
importance economically, as virgin forests grew scarce after 1910. Aided by railroad develop-
went during the late 1800's, a grain and flour milling empire was .established in the Twin Cities.
Minneapolis became a destination point for grain distribution throughout the Upper Midwest and
was the largest flour milling city in the world from the 1880s to the 1920's.
The presence of two transcontinental railroads and access to river commerce helped the Twin
Cities become a major wholesale distribution center serving as far away as the Pacific Northwest
by the early 1900's. A substantial industrial base emerged as well, which helped fuel growth in
the Twin Cities.
Quality of Life
Scandinavian and German immigrants, who replaced the French fur traders, settled in Minnesota
and are frequently credited with fostering the conservative and hard-working atmosphere of the
Twin Cities. These traditions have resulted in a quality of life not found in many other large
metropolitan areas across the country.
Minnesota and the Twin Cities consistently rank near the top in national quality of life surveys.
In both 1992 and 1993, studies conducted by Northwestern National Life Insurance Company in
each year, 1993 through 1995, ranked Minnesota as the healthiest state in America. In 1990,
Working Mother magazine cited quality child care, good public schools, and abundant job pros-
pects three characteristics that make the Twin Cities "best for families" among major metropoli-
tan areas in the United States.
Economic and Business Climate
Minneapolis-St. Paul began as an agribusiness center serving the Upper Midwest and the Pacific
Northwest. The key industries economically were grain and flour milling, and many firms head-
quartered in the region -- such as Cargill, Farmer's Union Central Exchange, General Mills,
9
International Multifoods, Land, O' Lakes; Peavey, and Pillsbury --,serve national and interna-
tional markets. National League of Cities and World :Trade magazine have consistently ranked
the Twin Cities among the top twenty metropolitan areas in-the United States for international
companies to do business and/or expand in North America in 1993.
Minneapolis-St. Paul ranked seventh nationally among major metropolitan areas in the number
of Fortune 500 industrial firms in 1993. Deluxe Check, General Mills, 3M, Honeywell, Interna-
tionalMultifoods are a few selected firms headquartered in the region. Fortune Service S00
listed 171oca1 fums -- including Dayton-Hudson, Northern States Power, Norwest Bank, and
First Bank System -- in 1992. Forbes 400 listed 10 local firms -- including Cargill (the nation's
largest private company), Northwest Airlines (the nation's fourth largest airline), Carlson Com-
panies, Holiday Companies, and National Car Rental..-- in 1992. Many of the jobs at these firms
are non-manufacturing jobs, and particularly-administrative services jobs.
Minneapolis-St. Paul has grown and will continue to grow because of its role as a major financial
center of the Upper Midwest. A number of nationally recognized financial services companies.
.are headquartered in the region including American Express Financial Advisors, Minnesota Mu-
foal Life, NorthwesternNationalLife, and`The St. Paul Companies. Minneapolis is also home to
the Ninth Federal Reserve District. The growing regional and national importance of the local
financial sector has. kept the local economy expanding at or above the national rate, while insulat-
ing it from major economic slowdowns
Cray Research, Ceridian (previously part of the former Control Data Corporation),, and Unisys
are among the largest manufacturers in the Twin Cities They comprise a portion of the substan-
tial base of regional high-tech companies. Although total employment in the industry has de-
clined slightly over the past several:years, employment in research andproduction facilities has
stemmed industry losses.
St. Jude Medical, Medtronic Incorporated, and the University of Minnesota Hospital are develop-
ing numerous medical technologies and providing quality health care in the Twin Cities that is
recognized throughout the United States. Other medical start-up companies are also being cre-
ated, and medical technology entrepreneurs. are often featured in local and national news publi-
cations. In addition, the world-renowned Mayo Clinic is located in nearby Rochester.
Health Maintenance. Organizations (HMOs) were pioneered in Minnesota. Today, they cover
roughly one-fourth of the state's population, ranking second in the nation to California. Only
seven percent of the state's population lacks health insurance. A national survey of health insur-
ance costs in 151arge cities in the United States, conducted by the Bureau of Labor Statistics,
found that only Seattle, Washington had lower per employee health costs than Minneapolis-St.
Paul.
The metropolitan area has a strong retail environment. Mall of America (which is located in
Bloomington), the nation's largest retaiUentertainment complex, will be four years old in August
1996. The "mega mall" has over four million square feet of space and is anchored by Blooming-
. dales, Macy's, Nordstrom, and Sears. It also features an amusement park with- 20 rides, a
10
multi-plex theatre with. l4 screens, 22 restaurants, and nearly 400 stores. An estimated 35 to 40
million people visited the mall in its first yeaz of operation (August 1992 to August 1993). ~S
Minneapolis-St. Paul and their surrounding suburbs will remain the economic heart of Minnesota
in the near future, growing faster than the state average through the rest of the 1990s and into the
21st Century. In addition, local economic growth is expected to outpace national economic
growth (at least in the short-term). The metropolitan azea should continue driving economic
growth in the Upper Midwest.
Transportation
Minneapolis-St. Paul is a regional transportation center for the Upper Midwest. As noted previ-
ously, railroads and river commerce greatly influenced early development in the Twin Cities.
Today, the metropolitan area is served by air, barge, rail, and ground transportation.
Minneapolis-St. Paul International Airport is a modern facility located within about twenty min-
utes of Downtown Minneapolis and Downtown St. Paul. On weekdays, 650 to 700 scheduled
domestic and international flights are available out of the airport. Another terminal building re-
cently opened which serves a considerable number of chartered domestic and international
flights. The airport served 26.8 million passengers and accommodated over 358,700 metric tons
of cargo in 1995. Northwest Airlines (based locally), twelve other airlines (including KLM), and
seven regional/commuter airlines provide passenger service from the Twin Cities.
The Mississippi River runs through the metropolitan area. The central continental river system
provides access to Pennsylvania to the east, Nebraska to the west, and Louisiana and the Gulf of
Mexico to the south. At last count, ten barge lines had offices in the Twin Cities.
Soo Line Railroad maintains headquarters in Minneapolis, and Burlington Northern was founded
in and still maintains major facilities in St. Paul. Burlington Northern, in tenors of mazket value
and profitability, ranks among the. top three railroads in the United States. A total of fourteen
railroads have offices in the Twin Cities.
Minneapolis-St. Paul is located at the junction of two rrtajor interstate highways. Interstate 35
runs north-south from Duluth, Minnesota to Laredo, Texas. Interstate 94 connects with Interstate
90, which runs east-west from Seattle, Washington to Boston, Massachusetts. Several trucking
firms serve the region, providing service throughout the United States.
Employment
Table 1 shows the number of jobs in the seven-county Twin Cities Metropolitan Area in nine
sectors from 1980 to 1994 (the most current year available). Total covered employment in-
creased by about 242,600 jobs during the 1980s, to roughly 1,282,400 jobs in 1990. The largest
numerical increases occurred in Services and Trade (116,000 and 56,000 jobs, respectively),
while the rate of increase was greatest in Services (52.7 percent) and Agriculture (50.0 percent).
11
FIRE (Finance, Insurance, and Real .Estate) also experienced rapid growth. Services passed both
Manufacturing and Trade during. the decade --...primarily due to strong growth in health care,
business services, and personal services -- and is the largest sector in the region. Total covered
employment fell slightly during 1991 but rebounded during 1992, and increased again in 1993
and 1994, particularly in Services.
TABLE 1
SEVEN-COUNTY TWIN CITIES METRO AREA
COVERED EMPLOYMENT (000's)
1980 to T994
Change
- 1980 - 1994
Sector 1980 1985 1990 1991 1992 1993 1994 No. Pct.
Agriculture 4.6 5.6 6.9 6.9 7.0 7.2 8.6 4.0 87.0
-~- Mining 0.7 0.8 0.5 0.4 0.4 0.4 0.5 -0.2 -28.6
Construction 44.3 .44.4 47.6 45.0 44.7 45.6 46.7 2.4 5.4
__, .. Manufacturing 244.4 250.1 250.9 249.3 247.0. 251.2 253.2 8.8 3.6 _
TCU' 54.8 60.0 69.5 70.1 70.2. 69.4 72.5 17.7 32.3
Trade 264.1 287.6 320.1 313.5 316.5 324.1. 334.4 70.3 .26.6
FIRE 2 68.5 81.8 94.3 97.2 99.8 104.6 108.9 40.4 59.0
Services 220.2 266.8 336.2 334.2 354.0 368.2 383.1 162.9 74.0
Government 138.2 136.1 156.4 . 159.5 161.7 165.3 173'.9 35.7 25.8
Total 1,039.8 .1,133.2 1,282.4 1,276.1 1,301.3 1,336.0 1,381.8 342.0 32.9.
Unemployment Rate. 4.3 4.4 4.2 4.5 4.4 4.3 3.3 --- --
' Transportation, Communications, and Utilities
z Finance, Insurance, and Real Estate
Sources: Minnesota Department of Economic Security
.Maxfield Research Group
Table 1 shows the annual average_unemployment rate in the seven-county Twin Cities Metro-
. politan Area from 1980 to 1994. The local average has consistently been below the. national av-
erage, generally fluctuating around four percent. After reaching a high of 6.4 percent in 1983
due to lingering effects of the national. recession in 1981-1982, the:unemployment-.rate dropped
to 4.2 percent in 1990. The unemployment rate was 3.3 percent in 1994.
Minnesota ranks sixth nationally ingrowth of high-tech jobs since 1980, and over one-third of
the total work force is currently employed in "white collar" management or service jobs. The
12
state's labor force is one of the most highly educated in the country, with over four-fifths of all
workers having completed high school.
Education
Minnesota prides itself on having a strong education system, one of the finest in the nation. The
state has one of the highest high school graduation rates in the country (88.4 percent in 1993),
and its students consistently outperform their U.S. counterparts on the Scholastic Aptitude Test
and the American College Test. Minnesota is nationally known for its open-enrollment program
which permits students to attend school in a participating district outside the one in which they
live. There are about two dozen colleges and universities within aone-hour radius of the Twin
Cities. The University of Minnesota has one of the largest college campuses in the country, and
its professional programs (including. the law and medical schools) are considered among the best
in America.
:- Sports/Recreation
= Minnesota is known for its support of college and professional sports. The three professional
teams are the Minnesota Vikings (football), the Minnesota Twins (baseball), and the Minnesota
Timberwolves (basketball). The Hubert H. Humphrey Metrodome (located in Downtown Min-
neapolis) guarantees warm football and cool baseball weather inside its climate-controlled dome.
Target Center (also located in Downtown Minneapolis) is the home of the Timberwolves. In
addition, several semi-pro teams are based in the Twin Cities, including baseball's St. Paul Saints
and hockey's Minnesota Moose.
In addition to spectator sports, the metropolitan area boasts a wide variety of sports activities for
people of all ages. There are more golfers per capita in Minnesota than any other state, and the
Twin Cities reflects this with over 100 golf courses. Both residents and visitors enjoy water
sports, hiking, biking, jogging and picnicking at the 1,2471akes and nearly 150,000 acres of
public land set aside for parks, trails and wildlife management in the Twin Cities. In the winter,
there are hundreds of outdoor rinks for ice skating and other ice sports, and -there are over twenty
downhill ski areas and miles of groomed cross-country ski and snowmobile trails within aone-
hour radius of the Twin Cities.
Special recreation facilities in the metropolitan area include Valleyfair Amusement Park (located
in Shakopee), the Minnesota Zoo (located in Apple Valley), ICnott's Camp Snoopy (located at
Mall of America), and Como Park Zoo (located in St. Paul). Seasonal festivals in the metropoli-
tan area include the St. Paul Winter Carnival, the Minneapolis Aquatennial, and the Renaissance
Festival.
13
•
•
Cultural
Minneapolis-St. Paul boasts. hundreds of cultural attractions including repertory and dinner thea-
ters, art galleries, dance and music companies, and museums. Some of the larger metropolitan-
wide organizations include the Minnesota Orchestra, the Walker Art Center, and the Minneapolis
Institute of Arts in Minneapolis; and the St. Paul Chamber Orchestra, the Minnesota Opera
Company, and the Schubert Society in St. Paul. Theaters that delight residents year-round in-
clude the Guthrie, the Orpheum, the Cricket, the State, and the Ordway. While the Minneapolis
Planetarium and the Bell Museum atthe University of Minnesota arelocated in Minneapolis, the
Science Museum of Minnesota (including one of the largest Omnitheaters in the world) and the
Children's Museum -are located in St. Paul. The New York Times has noted that outside of New
York, the Twin. Cities has the finest cultural scene in America.
• During 1995, the Orpheum Theatre hosted the world premier of the. Broadway show Victor Vic-
. toria and the national touring show Beauty and the Beast. The State and:Orpheum Theatres .
hosted approximately 500 show in 1995 compared with 308 shows during 1994 and 216 shows
in 1993. Major Broadway shows presented during 1995 included Phantom of the Opera, Joseph
,- and the Amazing Technicolor Dreamcoat, Victor Victoria, `Kiss of the Spider Woman, Ain't Mis-
behavin ; and Beauty and the Beast.
Population, Household, and Employment Growth Trends g
As designated by the Bureau of the Census, the Twin Cities Metropolitan Statistical Area (MSA)
is aneleven-county area with a population of about 2.5 million persons in 1990. For land use
and development control, the Metropolitan Council oversees aseven-county area which accounts
for over ninety percent of the population in the MSA: Anoka, Carver, Dakota, Hennepin, Ram-
sey, Scott and Washington Counties. Table 2 shows population,: household, and employment
figures for the seven-county Twin Cities Metropolitan Area from 1970. to 2020. _
The seven-county metropolitan area accounts for over. half of the state's population and is the
center of the state's wealth and industry. The region had a population of roughly 2,288,730 per-
sons (up 15.3 percent from 1980) and a base of roughly 875,500 households (up 21.4 percent
from 1980) in 1990. Employment in the region was estimated at more roughly 1,294,700 per-
sons in 1990 (up 21.1 percent from 1980). Hennepin and Ramsey Counties, the two most popu-
lous counties in the state, are the core counties of the region. Minneapolis (the state's largest
city) is located in Hennepin County. St. Paul. (the state's capital and second largest city) is lo-
cated in Ramsey County. Altogether,. they comprised about 66 percent of the population,
70 percent of the households, and 80 percent of all employment in the seven-county Twin Cities
Metropolitan.Area in 1990.
About 220,000 jobs were created in the seven-county metropolitan area during both the 1970s
and 1980s. Another 207,000 jobs should be created during the 1990s, but a nationwide slow-
down in job growth should result in only 148,000 jobs being created between 2000 and 2020.
14
For the past two decades, household growth has reflected employment growth: 150,000 house-
holds were formed in the seven-county metropolitan azea during both the 1970s and 1980s.
Another 128,000 households should be formed during the 1990s, and another 216,000 house-
holds should be formed between 2000 and 2020.
TABLE 2
SEVEN-COUNTY TWIN CITIES METRO AREA
POPULATION, HOUSEHOLDS, AND EMPLOYMENT
1970 to 2020
County 1970 1980 1990 2000 2010 2020
Population
Anoka 154,694 195,998 243,688 287,190 318,350 344,820
Carver 28,331 37,046 47,915 63,220 74,550 85,810
Dakota 139,808 194,279 275,186 346,130 397,030. 450,490
__ Hennepin 960,131 941,411 1,032,431 1,109,820 1,166,120 1,202,970
Ramsey 476,152 459,784 485,783 504,560 516,]50 525,460
Scott 32,423 43,784 57,846 77,410 96,550 115,380
Washington 82,964 113,571 145,880 190,580 220,550 252,490
Total 1,874,503 1,985,873 2,288,729 2,578,910 2,789,300 2,977,420
Households
Anoka 36,639 60,716 82,437 101,460 118,150 113,960
Carver 8,050 12,011 16,601 22,840 28,410 34,290
Dakota 37,511 64,087 98,293 128,330 154,720 182,150
Hennepin 309,610 365,536 419,060 454,560 485,540 510,460
Ramsey 148,878 170,505 190,$00 200,950 209,360 216,630.
Scott 8,876 .13,501. 19,367 27,150 ..36,020. 45,540
Washington 21,347 35,088 49,246 67,750 81,900 96,380
Total 570,911 72 ] ,444 .875,504. 1,003,040 1,114,100 1,199,410
Employment
Anoka 31,787 60,040 82,956 102,260 111,740 114,770
Carver 4,563 9,220 18,230 25,480 30,070 31,680
Dakota 33,914- 61,530 ]07,257 143,880 161,940 169,370
Hennepin 505;424 617,840 725,836 815,370 861,030 883,410
Ramsey 254,183 278,660 294,884 328,690 343,340 348,940
Scott 7,395 12,890 20,035 26,330 30,160 31,280
Washington. 16,027 28,850. 43,923 57,940 65,790 68,450
Total 853,293 1,069,030 1,293,121 1,499,950. 1,604,070 1,647,900
Sources: U.S. Census of Population and Housing (1970, 1980, & 1990)
Metropolitan Council: Population, Employment, and Household Forecasts (September 1994)
Maxfield Research Group
15
With a high quality of life and a diverse, growing economic and business climate, the Twin Cit-
ies Metropolitan Area continues to be the major regional commercial, financial, health services,
educational, and cultural center of the Upper Midwest.
s
•
16
SITE SELECTION CRITERIA
Introduction
As with any real estate development, a good location is critical to the success of senior housing.
There are many key factors to consider when examining a site for its potential attractiveness for
senior housing. This section reviews some of these factors based on the previous experience of
Maxfield Research Group and the experiences of others in the senior housing industry.
It is important to examine site criteria for independent living and assisted living facilities sepa-
rately since they attract different segments of the senior market who will view site characteristics
differently based on their lifestyle needs.
Interviews
Maxfield Research Group interviewed senior housing developers, project managers, and others
familiar with senior housing in order to assess the most important site considerations for senior
- -- ~°' rental housing. Key site characteristics -for independent senior housing include:
• proximity to health care/support services (clinic, nursing home, hospital, home care);
• good access to public transportation;
• proximity to shopping;
• residential atmosphere of neighborhood;
• proximity to services (bank, pharmacy, clinic, etc.);
• good views from units;
• ability to draw from and be close to a senior center or church; and
• good access for friends and family members (also important for marketing) - on or near a -
maj or thoroughfare.
The following site characteristics were noted as being the most important for assisted living
housing. Key characteristics include:
• good transportation access to the project;
• proximity to health care/services (clinic, nursing home, hospital, home care);
• good transportation program;
• proximity to shopping;
• residential atmosphere of the neighborhood;
• view from units; and
• high visibility in a highly trafficked area.
17
Maxfield Research Group feels these are indeed some of the most important features to look for
in a potential site for senior housing and they have been elaborated on further in the following
sections.
Important Site Characteristics -Independent Living Housing
Based on interviews conducted for this study as well as :Maxfield Research Group's previous re-
search on senior housing, the following are recommended as key factors to examine when de-
termining the appropriateness of a site for senior housing. Based on our previous studies, we be-
lieve the following site characteristics are the most important to consider when evaluating a site
for senior housing.
Access
• How easy would it be to get to the building?
• Is traffic an issue for access to the site itself?...
;- • How close are major streets and freeways to provide access to major shopping, hospitals,
clinics, and other parts of the metropolitan area?
Visibili
• How. easy will it be to see the building from the street?
• Is the site on a major thoroughfare? How much traffic passes by the site?
• Will sitelines of the building possibly allow for views from further away (i.e., a multi-story
building visible from several blocks away)?
Surrounding Land Uses/Nei~hborhood Appearance
• Are adjacent land uses compatible with residential-development? Compatible adjacent land
uses are other types of residential development, both single- and multifamily; parkland or
other recreational .use (depending on specific users and traffic generated); institutional uses
such as churches, schools, libraries; government buildings; neighborhood retail, including
professional services (banks,. doctors, accountants).
• Are there any significant problems v~~ith adjacent land uses? Inappropriate surrounding land
uses include-most industrial buildings (some may be acceptable depending on design and
landscaping), retail uses such as gas stations and other auto service (if concentrated); deterio-
rating buildings of any kind; adult uses such as pornographic video stores and strip. clubs; fu-
neral homes in close proximity to the -site; neighboring train tracks with significant traffic
levels.
• Crime and Safety - is the neighborhood one that is perceived to be safe? A site that has ex-
cellent access and visibility will not be attractive to .potential residents if it is located in a
neighborhood that is perceived to be dangerous.
18
• In general, is the neighborhood an attractive azea? Are there trees and other landscaping?
Are streets and sidewalks clean and in good repair? Are buildings in the area attractive and
well-maintained?
Site Amenities
• What would views be from individual units? Most types of activity aze an asset for senior
housing, but views of natural amenities such as open space aze also a plus. Views from. all
sides of the building must be considered. Views of the backs of retail malls and commercial
rooftops may not be particulazly attractive, for example.
• Is the topography of the site or general azea interesting? Would the site retain any trees or
could landscaping create an attractive setting for the building?
Proximity Within Neighborhood
• Is the site located near a grocery store and drug store. (within walking distance or a short
drive)? This component was viewed as one of the most important site characteristics of a site
for independent senior rental housing. In addition, aze other types of retail facilities and
services located nearby, including a hazdwaze store, cazd/gift shop, liquor store, film process-
ing, dry cleaners, banks, post office, and restaurants?
• Are churches located within walking distance or a short drive? Seniors prefer to be near their
church if at all possible; a location neaz churches will draw some senior members of that
church.
• How convenient is public transportation? Because many seniors no longer drive, it is impor-
tant to be located neaz a-bus line, or have access to taxi service or other community based
senior transportation.
• Is there a fire station/police station or other emergency response close by? Proximity to these
services is important so that response time may be reduced for any type of emergency seniors
may have.
• How close aze medical facilities, notably community clinics and hospitals?
Important Site Characteristics -Assisted Living Housing
In general, the market for assisted living buildings is less sensitive to proximity to retail goods
and services since seniors who are a market for assisted living will not do their own shopping.
Instead, the acceptance of the location is influenced more by high visibility and good access, for
two reasons. First, turnover in assisted living projects is quite high, generally between 40 and 60
percent per yeaz. As such, good visibility will keep the project in the minds of referral sources
and family members who need to find housing for frail relatives. Second, good visibility and ac-
cess makes delivery of services easier, especially .emergency medical services.
Seniors in need of assisted living housing are typically more frail, and will not leave the project
as often as independent seniors who may still drive. While the above site characteristics are
19
important and should be considered when evaluating a site for senior housing, more emphasis
should be given to the visibility and access of the site as vv~ell as its proximity to health care.
•
20
DEMOGRAPHIC ANALYSIS
Study Area Definition
This section of the report reviews factors related to demand for senior housing in the City of
Richfield. Growth trends and the demographic composition of the senior population and house-
hold base were examined for a study area defined as the primary draw area for senior rental
housing in Richfield. The study area was divided into two market areas, the Primary Market
Area (PMA) and the Secondary Market Area (SMA). The PMA consists of the City of Richfield
and will account for the majority of the demand for senior housing at the subject sites. The SMA
consists of the southern portion of the City of Minneapolis (the neighborhoods south of 42nd
Street), the southeastern portion of the. City of Edina (south of 54th Street and east of Highway
100), and the central and eastern portions of the City of Bloomington (east of Normandale
Boulevard). The study area was defined based on community orientation, travel patterns, natural
and man-made geographic boundaries, existing senior housing facilities, and knowledge of the
draw areas of senior housing. A map of the study area, showing both the PMA and SMA, is in-
cluded on the following page. For comparison purposes, most of the demographic tables in this
section also include data for the Twin Cities Metropolitan Area.
Population, Household, and Employment Trends
Tables 3, 4, and 5 show data on the study area's population, household, and employment base for
1980 and 1990. Forecasts of population, households, and employment for 2000 and 2010 are
shown on the tables as well. It should be noted that employment data for the study area is shown
for 1990, but was not available for the SMA for 1980. The following paragraphs summarize the
key points from these tables.
Population
• The study area population declined by 9,204 persons or 4.7 percent during the 1980s to
187,788 persons in 1990. The majority of this decrease occurred in the SMA, which de-
creased by 7,063 persons (4.4 percent) to 152,078 persons in 1990. The population in the
PMA decreased by 2,141 persons (5.7 percent) during the 1980s, to 35,710 persons in 1990.
• Population forecasts for 2000 and 2010 show growth in Richfield and the SMA. The popu-
lation of the study area as a whole is expected to increase by 3.0 percent during the 1990s,
with the SMA accounting for nearly all of the growth while Richfield is expected to see only
slight increases. Between 2000 and 2010, the population of the study area is expected to in-
crease by 3.3 percent. The population of both the SMA and Richfield are expected to have
increases during the 2000s, by 3.7 percent and 1.4 percent, respectively.
21
Study Area
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Households
' dicators of housin demand than o ulation rowth
Household growth trends are more relevant m 8 P P g
trends. because households represent actual occupied housing units.
• During the 1980s; the household base in the study area increased from 76,369 households to
79,290 households, an increase of 3.8 percent.: Both Richfield and the SMA experienced in-
creases in number of households during the 19$Os; 1.9 percent and 4.3 percent, respectively.
In 1990, 15,551 households were in Richfield-and 65,704 households werelocated in the
SMA.
• An increase of 2,214 households (2.8 percent) is forecast in the study area between 1990 and
2000, and 2,262 households (2.8 percent) from 2000 to 2010. As with population, the major-
_ ity of these increases will occur in the SMA, with increases of 3.1 and 3.3 percent, respec-
tively, while Richfield is expected to see an increases of 1.6 during the 1990s; and 0.6 percent
from 2000 to 2010.
Comparing household growth with population growth reveals that the rate of household growth
~~ has been and will continue to be greater than population growth. This is due to social and demo-
graphic factors that began in the 1960s and continue today. Large numbers of households were
formed by the "baby boom" generation (persons born between 1946 and 1964) starting in the late
1960s and continuing through the 1980s. The increases in the number of households did not
have a corresponding increase in population as household size declined. Couples' decisions to
have fewer or no children, increased divorce rates, and a shift from traditional to non-traditional
households were the major factors contributing to smaller household size. The 1990s will see a
lessening of the disparity between household and population growth rates as the "baby bust"
generation (persons born between 1965 and 1976) becomes the driving force of household for-
mation. However, baby boomers that have typically held off having children longer then their
.parents, are. now having children of their own, resulting in a "baby boomlet," which has produced
birth rates. similar to the latter years of the baby boom. These persons will begin entering the
housing market in the late-1990s, but will not have quite as strong an impact on the housing
market as did the baby boom generation.
Employment ;
• Employment data was unavailable for the SMA for 1980, but the Richfield had 14,1.00 jobs
in 1980 and 10,844 jobs in 1990, a decline of 3,256 jobs or 23.1 percent. The study area. as a
whole had .1.15,748 jobs in 1990. These jobs are located in the study area, but may be filled
by employees who live outside the study area.
•
• Forecasts for employment show a projected increase of 9,073 jobs (7.8 percent) in the study
-area during the 1990s. Richfield is forecast to gain 556 jobs (5.1 percent) during the 1990s,
while the SMA is forecast to gain 8,517 jobs (8.1 percent). Between 2000 and 2010, em-
ployment is forecast to remain relatively stable, with an increase of 1,368 jobs (1.1 percent)
in the study area. During the 2000s, a greater rate of employment growth is forecast in
26
Richfield (1.8 percent) than in the SMA (1.0 percent), although the numerical increase will
be much greater in the SMA.
The study azea, being located in a fully developed area neaz the core of the Metropolitan Area,
will not see the substantial increases in population, households and employment that many of the
developing suburban azeas will experience. These suburban communities, particulazly the sec-
ond- and third-ring suburbs, have large tracts of undeveloped land remaining to support growth,
while most ofthe growth in the study area will result in changes in land use through redevelop-
ment.
Senior (Age 65 and Over) Population Growth Trends
_ Table 6 presents data on senior (age 65 and over) population growth trends in the study area.
The table shows the number of "younger seniors"(persons age 65 to 74) and "older seniors"
..(persons age 75 and over) in 1980 and 1990, the change during the 1980s,: and the seniors' pro-
portion of the total population in 1980 and 1990. The following summarizes key trends shown in
the table.
• During the 1980s, the study area's senior population increased by 6,018 persons (25.8 per-
' cent) to 29,382 persons in 1990. Richfield experienced an increase of 2,086 seniors (52.6
percent) during the 1980s, while the SMA experienced-an increase of 3,932 seniors (20.3 per-
cent).. The metro azea overall experienced increases in both senior age categories during the
decade.
• Increases in the number of younger seniors and older seniors occurred in both Richfield and
the SMA. The Minneapolis portion of the SMA was the only azea to post a decline in senior
population during the 1980s.
The senior percentage of the study azea's population increased from 11.9 percent in 1980 to
15.6 percent in 1990. Richfield's proportion of seniors increased from 10.5 percent in 1980
to 16.9 percent in 1990, while the SMA's seniors increased from 12.2 percent to 15.3 percent.
• Overall, the study azea's senior proportion (15.6 percent) in 1990 was substantially higher
than the metro area as a whole (9.8 percent).
Senior (Age 65 and Over) Household Growth Trends
Table 7 presents data on the number of senior households in the study azea in 1980 and 1990 by
age of householder. Households aze shown for both younger and older seniors, as well as the
percentage of the total households that aze senior households. The following paragraphs sum-
marize the key trends shown in the table.
The number of senior households in the study area increased substantially between 1980 and
1990. The study area had a total of 19,010 senior households in 1990, an increase of 4,320
27
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households (29.4 percent) from 1980. Increases occurred in both Richfield, which gained
1,461 households (26.0 percent of its household base),. and in the SMA, which posted a gain
of 23.6 percent.
• The overall increase of the study area's senior household base can be attributed to significant
gains of both younger senior. households and older senior households, which increased by
27.9 percent and 31.5 respectively during the 1980s. Richfield and the SMA posted similar
proportional increases among younger seniors and older seniors.
• In the study area overall, the percentage of all householders age 65 or older increased from
19.2 percent in 1980 to 24.0 percent in 1990. The proportion of seniors in Richfield and the
SMA increased as well during the 1980s. This is due, in part, to the large number of senior
units at Village Shores, Lake. Shore Drive, and Woodlake Point that have attracted seniors
_ from outside.the study area. Typically, market rate independent senior housing projects at-
tract 25 percent or more of their residents from outside the community, whereas assisted liv-
ing projects typically attract as many as 50 percent: of their residents from outside the com-
munity. The metro area experienced only a slight increase in the proportion of senior house-
holds, from 16.4 percent in 19.80 to 16.5 percent in 1990.
" ` Adult (Age 45 and Over) Age Distribution
The distribution of the adult (age 45 and older) population isimportant because age affects the
type of housing demanded and also reveals the growth that is likely to occur in the senior popu-
lation and household base in the near future. While most empty-nesters and younger seniors still
prefer to remain in their own home, a growing number of older adults are choosing housing al-
ternatives that require less maintenance than their single-family homes.. Furthermore, as older
seniors become more frail, they will seek out housing with support services. Table 8 shows the.
distribution of the study area's 45 and over population. The table is distributed into seven age
categories with each category's 1990 percentage of the tota145 and over population also shown. -
The following summarizes the key trends in this table.
• The number of seniors in the 55 to 59 and 60 to 64' age groups was larger than the preceding
age groups. This data .indicates that the number of young seniors (age 65 to 74) will likely
increase slightly during the 1990s.
• In the study area overall, there were 61,377 older adults in 1990,57.2 percent of whom were
females. Females out-number males in each of the age categories shown on the table for
Richfield, the SMA, and the study area overall, and the difference increases with each suc-
cessive age category.
Senior (Age 65 and Over) Population and Household Projections
Tables 9 and 10 present forecasts of the senior population and household base for Richfield, the
SMA, and the study .area as a whole, for 1995, 2000,. 2005, .and 2010. The calculations were
30
TABLE 8
OLDER ADULT (AGE 4 5 AND OV ER) AGE DISTRIBUTION
RICHFIELD STUDY AREA
1990
Stu dy
PMA (Ri chfield) SMA Area Total
Age Sex No. Pct.* No. Pct.*
~~ No.
~~ Pct.* '
~~
45-49 Male 851 2,884 3,735
Female 995 3, 184 4,179
Total 1,846 14.2 6,068 12.5 7,914 12.9
50-54 Male 780 2,157 2,937
Female. 871 2,476 3.,347
_ Total 1,651 12.7 4,633 9.6 6,284 10.2
' 55-59 Male 702 3,305 4,007
Female 846 3,747 4,593
Total 1,548 11.9 7,052 14.6 8,600 14.0
60-64 Male 849 3,485 4,334
Female 1,063 4,072 5,135
Total 1,912 14.7 7,557 15.6 9,469 15.4
65-69 Male 943 3,200 4,143
Female 1,216 3,928 5,144
Total 2,159 l 6.6 7,128 14.7 9,287 15.1
70-74 Male 682 2,315 2,997
Female 1,008 3,330 4,338
Total 1,690 13.0 5,645 -11.7 7,335 12.0
75-79 Male 469 1,592 .2,061
Female 638 2,641 3,279
Total 1,107 8:5 4,233 8.8 5,340 8.7 _
80-84 Male 195 1,003 1,198
Female 474. 2,035 2,509
Total 669 5.1 3,038 6.3 3,707 6.0
85+ Male 104 756 860
Female 323 2,258 2,581
Total .427 3.3 3,014 6.2 3,441 5.6
Tota145+ Male 5,575 . 20,697. 26,272
.Female 7,434 27,671 35,105
Total 13,009 100.0 48,368 100.0 61,377 100.0
* percent of Tota145+
Note: Some percent totals may be inconsistent due to rounding.
Sources: Bureau of the Census: U.S. Census of Population and Housing, 1990
Maxfield Research Group
31
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made based on age/sex cohort survival rates. for the State of Minnesota from 1990 and from 1990
Census data. The forecasts are an aging of the 1990 senior base and assume no net change due to
migration, however, senior in-migration.. (i.e., moving to be close to adultchildren) will likely be
greatly less than out-migration (i.e., moving out to surrounding suburban communities to be near
adult children or to Sunbelt states during retirement) in this: azea unless. adequate alternative
housing options for seniors aze developed. Thus, the projections could besomewhat overstated.
The following key trends aze identified in the table.
Senior Population
• As shown in Table 6, the number of seniors in the study azea increased between 1980 and
1990. Between 1990 and 2000,- further increases aze projected for Richfield, the SMA, and
the study area overall. In the tudy azea, 32,790- seniors .are forecast for 2000, an increase of.
3,680 persons (12.6 percent) from 1990. However, between 2000 and 2010, the number of
.seniors is expected to decline by 3,110 persons (9.5 percent) to 29,680 seniors in 2010. As a
result, there will not be a significant increase in the study area's senior population base be-
tween 1990 and 201.0.
• .The number of younger seniors in both Richfield and the SMA is expected to decline while
_, . the number of older seniors is expected to increase. Overall, the study area's younger seniors
-are projected to decline by 4.0 percent during the 1990s and 24.5 percent during the 20006
while the number of older seniors is projected to increase by only 34.8 percent during the
1990s and 4.7 percent during the 20006.
Senior Households
• As shown in Table 7, the number of senior households in the study azea increased between
1980 and .1990. This trend is forecast to continue during the 19906, with the number of
senior households projected to increase by 3,290 households .(17.3 percent) in the study azea.
However, by the 20006 the trend is forecast to be a decline, with Richfield projected to de-
crease by 120 households (2.S percent) and the SMA projected to decrease by 1,720 house-
holds (9.8 percent).
• During the 19906, the number of older senior households in the study azea is forecast to in-
crease by 3,419 households (4.1.1 percent) to 11,740 households in 2000. In contrast, the
number of younger senior households in the study area is forecast to decline during the 1990s
to 10;560 households in 2000, a modest loss of 129 younger senior households (1.2 percent).
• During the 2000s, the number of older senior households is expected to continue to grow, but
at a slower rate than during the 1990s. Older senior households are projected to increase by
710 households`(6.0 percent) to 12,450 households in 2010. Conversely, the number of
younger senior households is expected to continue to decline, but at a faster rate than during
-the 1990•. Younger senior households are projected to decline by 2,550 households (24.1
percent} to 8,010. households in 2010.
34
The lack of an adequate supply and variety of alternative senior housing options causes many
seniors to move out of the area.
Senior (Age 65 and Over) Household Income
Table 11 shows the number and percent of senior households between age 65 and 74, age 75 and
84, and age 85 and over in six different income brackets in 1995. This data was calculated. by
Claritas, Inc., a national demographic services firm.. This data is important in determining the
size of the potential market that can afford specific rent ranges, based on the fact that senior
households will typically spend at least 40.0 percent of their income on independent housing and
75.0 percent or more on assisted living housing. The following points summarize the key trends
shown on Table 11.
• Senior households with annual incomes below $15,000 are the .primary market for subsidized
housing, although some households with substantial home equity could afford modest-rent,
market rate senior housing. This group totaled 4,331 households in the study area in 1995,
~- the largest income group in the study area (21.8 percent of all senior households). A similar
percentage of Richfield's senior households (21.9 percent) had annual incomes of less than
$15,000, compared to the SMA's senior households (21.8 percent). In addition, over two-
thirds of these lower=income households are headed by older seniors (age 75 and over), be-
cause older seniors typically do not work and are much more likely to consist of single-
person households.
Seniors who could afford modest to middle market rent senior housing are in the $15,000 to
$24,999 income range. Based on a 40.0 percent allocation for housing, this translates to rents
of $500 to $833 per month. This group totaled 3,899 households and accounted for 19.7 per-
cent of all the senior households in the study area. Just over one-half (53.1 percent) of these
households are older senior households (age 75 and over).
• A congregate housing project with some services included in the rent or a deluxe project with
high quality finishing and many amenities will cost more and require higher annual incomes
from seniors. Seniors with annual incomes over $25,000 for example, could afford rents of at
.least $833 per month based on an income allocation~of 40.0 percent. An estimated 11,599
senior households in the study area have incomes of $25,000 or more per year (58.5 percent
of all senior households). Roughly two-thirds of the younger senior households have in-
comes over $25,000 per year, compared to just less than one-half of the older senior house-
holds (age 75 and over).
Based on the standard that a senior household will spend 60.0 to 75.0 percent of their income
on assisted living housing, a household income of $25,000 per year would translate to afford-
able monthly fees of up to $1,563 per month, not including additional potential income from
the sale ofa primary residence which could add another $500 to 600 to this monthly income.
Also, the average and median income of households age 75 and over in the $25,000 and-over
35
•
TABLE' 11 -
HOUSEHOLD IN COME
RICHFIELD STUDY AREA
(Number and Percent of Househol ds)
1995
Total Age 65-74 Age 75 -84 Age 85+
No. Pct. No,
~~ Pct. No.
~~ Pct.
~~ No. Pct.
PMA (Richfield)
Under $15,000 935 21.9 351 15.7 453 27.9 131 31.7
$15,000 -24,999 1,001 23.4 478 21.3 417 25.7 106 25.7
$25,000 - 34,999 924 21.6 505 22.5 336 20.7 83 .20.1
$35,000.- 49,999 634 14.8 427 19.1 169 .10.4 38 9.2
$50;000 - 74,999 590 13.8 353 15..8. 194. 12.0 43 10.4
$75,000 or More 191 4.5 126 5.6 53 3.3 12 2.9
Total- 4,275. 100.0 2,240 100.0 1,622 100.0 413 100.0
--~ Median Income ~ $27,206 $30,768 $23;582 $22,123
,< " SMA
Under $15,000 3,396 21.8 943 12.2 1,816 30.8 637.. 32.8
$15,000 - 24,999 2,898 18.6 1,349 17.5 1,166 19.8 383 19.7
$25,000- 34,999. 2;698 17.3 1,487 19.3. 911. 15.4 300 15.4
$35,000 - 49,999 2,559 16.5 1,529 19.8 ' 789 13.4 241 12.4
$50,000 - 74,999 2,284 14.7 1,386 18.0 683 1 l.6 215 11.1
$75,000 or More 1,719 1 ].1 1,020 13.2 - 533 9.0 1'66 8.5
Total 15,554 100.0 7,714 100.0 5,898 100.0 1,942 100.0
Median Income $30,090. $35,763 $24,768 $23,721
Study Area Total
Under $15,000 4,331 21.8 . 1;294 13.0 2,269 30.2. 768 32.6
$15,000 - 24,999 3,899 19.7 - 1,827 18.4 1,583 21.1 489 20.8
$25,000 - 34,999 3,622 18.3 . 1,992 20.0 1,247 16.6 383 16.3
$35,000-49,999 3,193 16.1 1,956 19.7 958 ]2.7 279 11.8
$50;000 - 74,999 2,874 145 1,739 17.5 877 11::7 258 11.0
.$75,000 or More 1,910 9.6 1,146 11.5 586 7.8 178 7.6
Total 19,829 100.0 9,954 100.0 7,520 ] 00.0 2,355 100.0
Median Income $29,468 $34,639 $24,512 $23,441.
Sources: Claritas, Inc.
Ivlaxtield Research Group
•
36
income category will actually be much higher than this minimum. This $25,000 figure repre-
sents the minimum used for qualifying. Thus, a114,766 households in the study area with
incomes above $25,000 per year and a portion of the"households with incomes below
$25,000 would be able to afford typical assisted living rents. However, it should be noted
that these figures include a number of households that would qualify based on income only,
and do not take into account proceeds from the sale of assets.
Senior (Age 65 and Over) Household Tenure.
Table 12 presents data on household tenure by age of householder in 1990 for study area seniors.
Data is broken down into tenure for seniors age 65 to 74 and age 75 and over. This data is im-
portant in that it shows the size of the market of senior homeowners who may desire to sell their
homes and move to alternative housing. Also, seniors who own their homes have untapped eq-
uity which, upon the sale of their home, could be invested with the income generated used to
support alternative housing. The following are the key points from the table.
°- • In 1990, 14,794 senior households (77.8 percent) in the study area owned their housing and.
4,216 households (22.2 percent) rented their housing. Slightly more of the senior households
in Richfield (80.7 percent) owned their housing than senior households in the SMA (77.1
percent). However, Lakeshore Drive and Woodlake Point condominiums tend to skew Rich-
field's-ownership rates upward. Subtracting the senior households at Lake Shore Drive and
Woodlake Point (335 total households) from the number of homeowners in Richfield results
in a 78.9 percent senior homeownership rate in Richfield. Home ownership rates in the study
area (77.8 percent) are higher than home ownership rates in the metro area overall. (70.2 per-
. cent):
Younger seniors are more likely to own their housing than older seniors. Older seniors are
more likely to want to shed themselves of the home maintenance responsibility or may need
to move to housing that provides additional support services. Overall in the study area in
1990, 84.5 percent of younger senior householders owned their housing, compared to 69.2
percent of older senior householders.
Single-Family Home Sales
Multiple Listing Service Resale Housing Data
Table 13 shows single-family home sales in the study area from 1993 through May 1996, from
the Regional Multiple Listing Service (MLS). Typically, MLS sales account for over 90.0 per-
cent of all resale transactions in a given area. In fully developed communities such as the study
area, the values of seniors' homes will be similar to the values of homes in general Only the
Edina and Bloomington West districts have most of their area outside of the study area. The
table includes data on the number of resales, the median sale price, the average sale price, and
average market time. This data is an indication of the strength of the housing resale market and
37
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TABLE 13
RESALE HOUSING MARKET DATA
RICHFIELD STUDY AREA
1993 -May 1996
Median Average Mkt.
No. of Selling Selling Time
District Year Sales Price Price (Days)
Richfield 1993 400 $85,000 $87,191 43
(378) 1994 417 $91,000 $92,873 38
1995 383 $93,000 $96,411 40
1996 * 133 $97,000 $99,627 38
Southwest 1993 863 $105,000 $119,516 46
(309) 1994 854 $112,247 $129,389. 42
1995. .833 $121,000 $138,0]0 45
1996 * 273 $124,900 $143,285 36
Nokomis 1993 781 $79,400 $83,228 51
(304) 1994 867 $79,900 $85,269 52
1995 84] $83,500 $88,022 45
] 996 * 268 $87,375 $92,730 42
Edina 1993 570 $169,950 $2]7,605 55
(385) 1994 565 $]84,150 $228,078 56
1995 541 $196,500 $244,533 67
1996 * 207 $185,000 $244,350 76
Bloomington East 1993 276 $88,000 $89,866 46
(379) ]994 279 $92,500 $96,029 41
1995 246 $95,000 $98,753 45
1996 * 81 $97,750 $99,326 38
Bloomington West 1993 556 $128,000 $157,860 41
(380) 1994 543 $134,900 $158,726 44
1995 501 $133,000 $161,476 51
1996 * 178 $136,700 $157,271 52
All Districts 1993 13,557 $100,000 $124,824 62
(Division III+) 1994. ]4,327 $102,900 $130,413 58
1995 13,782 $109,000 $135,261 60
1996 * 4,687 $142,534 59
Note: Median selling price for Division III is unavailable through May 1996
* Data is only available through May ] 996.
Division III consists primarily of Hennepin and Carver Counties.
Sources: Regional Multiple Listing Service of Minnesota (MLS)
Maxfield Research Group
~~
4 IVIL~ VI~IIl~+lS
the amount of proceeds that. senior homeowners could invest upon the sale of their homes to
produce supplemental income to support alternative housing.
• The number of home resales in Richfield has been relatively consistent over the last three and
one-half years, ranging from 383- sales (1995) to 417 sales (1994), with an average of 400.
- sales per year. Home resales in the. MLS districts that cover the SMA have also remained
relatively consistent and have averaged a total of just over 3,000 sales -per year between -1993
and 1995.
• The median sale price and average sale price of homes in the study area have increased each
year between 1993 and 1995, with the exception of median sale price in Bloomington West
in 1995 which-.had a slight decline. The median sale price in Richfield has increased by
$8,000 from 1993 to 1995, an increase of 9.5 percent..
• If the proceeds from the sale of a senior's home in Richfield at the median price in 1996
($97,000) less the estimated marketing costs (7.0 percent), are invested at 6.0 percent, a sen-
for would have. an extra $450 per month in income that could be allocated to housing or sup-
_° portive services. ($97,000 x .93 = $90,210 x .06 =.$5,412.60 / 12 =$451.05)
- • The average market time of homes for each of the. MLS districts has remained relatively sta-
ble between 1993 and 1995. Only the Edina District has seen a sharp increase in the average
market time of homes with number of days increasing from 56 in 1994 to 67 in 1995. In the
Richfield district, the average market time. of homes has remained near 40 days for each year
between 1993 and 1995.
It should be noted that the. median selling prices shown on the table are a better indicator of value
than average sale price, since average sale prices can be skewed upward by a few very high
priced homes.
The resale data clearly shows a healthy housing market, with consistent sales figures, increasing
sale prices and declining market times.. Seniors who desire to move into alternative housing
should be able to sell their homes in a reasonable amount of time.
Real Estate Agent Interviews
Several real estate agents,: each with their expertise concentrated in the Richfield area, were in-
terviewed to elicit their perceptions of the for-sale market in that portion of the study area. The
following text summarizes their perceptions of market conditions in the study area.
• The real estate market in the Richfield area has been very strong in the past couple years, es-
pecially for first-time home buyers, .with declining market times and. more :homes on the mar-
ket.
41
• Half of the seniors are currently selling by choice to rnave into apartments or out of the. azea.
The others aze being forced to sell for health reasons and aze moving directly into long-term
care facilities.
• Many more seniors would be selling earlier if they had alternative housing options within
their neighborhood, where they have deep roots and would prefer to stay. One couple, it was
stated, put off selling their home and moving up north for a couple of yeazs because they
really liked living in the community.
• The seniors who aze selling their homes are getting reasonable prices for the azea, from mid-
. $80,000's for two-bedroom-homes to $110,000's forthree-bedroom homes.
• There is a need for more senior housing in the area. Many seniors have strong connections to
Richfield and would like to stay, but there aren't enough options for senior housing.
• Seniors in Richfield tend to stay in their homes a lot longer than seniors in other suburban
communities. The houses in Richfield tend to be modest in size which allows seniors to
,` maintain their homes longer than would normally be the case.
42
SENIOR HOUSING MARKET REVIEW
Overview of Senior Housing Trends in the Twin Cities Metropolitan Area
Since the early-1980s, specialized housing for seniors has become an increasingly important
housing product. More seniors are considering moving to specialized housing because they pre-
fer not to, or can no longer, maintain their single-family home.. In addition, seniors who move
out of their single-family home into an apartment often do so for security reasons. As a result of
the. baby boom, the number of seniors considering moving to specialized housing will peak in the
first half of the 21st-Century. However, it is important to note that demand already exists for
specialized housing with features, amenities, and support services needed by seniors. In particu-
lar, the state moratorium. on the number of nursing home beds, changes in the payment systems
for nursing home care, and the changes in the demographic and economic :composition of the
caregivers of seniors have resulted in increased senior housing demand. Because the state cur-
rently does not .allow .nursing homes to add beds to their facilities, many facilities are seeking
ways to house seniors who still need health care and supportive services.- Because senior housing
with optional services is less expensive than a nursing home, seniors who need assistance but not
the intensive skilled care available at nursing homes need these less expensive senior housing
alternatives. Finally, where female family members used to shoulder the burden of the respon-
sibility of care for elderly relatives, more families now live hundreds or thousands of miles apart
and more females are now in the workplace; therefore, they are no longer able to provide care for
their relatives. As a result, many of those seniors need specialized senior housing.
The earliest market rate senior housing units developed in the Twin Cities Metropolitan Area
were geared toward the frail elderly. These projects were often associated. with nursing homes
and were primarily targeted to seniors who needed support services but did not require the medi-
cal services or daily monitoring of nursing homes. Many of these .seniors were still somewhat
independent but required assistance such as light housekeeping, daily checks, and transportation
to shopping and personal business or medical appointments. Monthly fees usually included ac-
tivities, meals, health checks, and other support services. This type of senior rental housing was,
and still is, considerably less expensive than nursing home care and is more fulfilling to seniors
who still desire some independence.
The oldest market rate senior project in the Twin Cites opened in 1965 under the sponsorship of
Heritage of Edina Health Care Center. Today, three buildings with a total of 214 units comprise
Heritage Manor. Sutton Place, which is affiliated with Presbyterian Homes and located in Arden
Hills, was the first congregate project built in the St. Paul area with occupancy in 1980. Several
similar facilities had already opened in the Minneapolis area by 1980 including 7500 York in
Edina (a cooperative completed in 1978), Friendship Village in Bloomington (a cooperative
completed in 1979), and St. Therese in New Hope (a rental building completed in 1979).
The development of senior housing continued during the 1980s with far greater product choice
and geographical distribution throughout the Twin Cities Metropolitan Area. The addition of
senior condominiums and smaller complexes with lower rents and fewer mandatory support
43
services vastly broadened the potential mazket for senior housing... Today, there are neazly 13,300
units of market rate senior housing (including moderate-rent units) in the Twin Cities Metropoli-
tan Area.
Over three-quarters of the units aze for-rent rather than for-sale.. Condominiums tend to attract
younger seniors who see value in ownership housing. Cooperatives often have a limit on appre-
ciation and are frequently misunderstood in the market. However, cooperatives aze beginning to
experience a re-emergence in the Twin Cities. market. Projects such as Realife Cooperative of
Burnsville have modest entry fees, moderate monthly fees, and have proven exceptionally attrac-
tive to seniors who wish to maintain a limited investment in their housing. '
However, rentals aze the most accepted by the mazket because of the lack of a long-term com-
mitment. Some facilities like Boulevazd Apartments in Columbia Heights require entrance fees
which aze used to offset the monthly rents. Typically, facilities requiring endowments have a
..strong service component and are geared to the frail elderly; they also often have a religious
sponsor, like Mazanatha Place in Brooklyn Center. The use of endowments or entrance fees is
declining because of resistance by prospects. St: Therese Southwest, for example, dropped en-
trance fees after experiencing very poorleasingand Boulevard Apartments has instituted an op- ~'
tion without entrance fees that requires higher monthly rents.
` Much of the senior housing product on the mazket currently includes housing alternatives which
have differing forms ofproject ownership. Examples include city-sponsored projects such as
. Plymouth Towne Square where priority.entrance isgiven to city residents and senior parents of
city residents. A brief,summary of Plymouth Towne Square and their entry priority system is
included below.
Plymouth Towne Squaze in Plymouth opened in October 1994 and has 99 units. and 60 under-
ground heated pazking stalls.: The project offers no services,-except apart-time .activities direc-
tor. The project includes one-bedroom. and two-bedroom. units, some with two bathrooms. Maz-
ket (maximum) rents are between $585 and $740 per month, while the minimum rent for the
very-low income residents ranges from $150 0 $305 per month and the minimum rent for the
low-income residents rangesfrom $420 to $575 per month. The application preferences ,are as
follows:
1. Past/present resident of Plymouth, low- or very-low income, age 62 and over.
2. Family resides in Plymouth, low- or very-low income, age 62 and over.
3. Past/present resident of Plymouth, low- or very-low income, age 55 to 61.
4. Family resides in Plymouth, low- or very-low income, age 55 to 61.
5. Others.
The project reached over 92 percent occupancy within five months and as of August 1996, was
completely full with a waiting list of over 300 names.
County-sponsored and managed projects: have also made senior housing alternatives more of
fordable than mazket rate projects. Washington and Dakota Counties have been particularly
44
proactive in the senior housing mazket and both sponsor a number of projects in a number of dif-
ferent cities in the counties.
Major Senior Housing Market Classifications
Maxfield-Reseazch Group classifies market rate senior projects into four categories:
• "adult"/few services, where few if any support services aze provided and rents tend to be
modest as a result;
• congregate/optional services, where support services such as meals and housekeeping are
available for an additional fee;
• congregate/service-intensive, where support services such as meals and housekeeping aze in-
cluded in the fees; and
. assisted living, where personal. caze such as bathing and dressing is available and at least
~~ three meals aze available daily (one or two aze often included in the fees).
These four senior housing products tend to share several chazacteristics. First, they all contain
independent apartments with living azeas, bathrooms, and kitchens or at least kitchenettes. Sec-
ond, they generally have an emergency response system with pull-cords or pendants to promote.
security. Third, they often have common space like a community room to encourage socializa-
tion. Finally, they are typically age-restricted and offer conveniences desired by seniors although
assisted living projects sometimes serve the under age 65 population with special health consid-
erations. These four senior housing products represent a continuum of options which occasion-
ally overlap, thus making the differences somewhat ambiguous. However, they are best distin-
guished by the level of support services offered, as described above. Due to differences in the
level of support services offered, "adult"/few services projects tend to attract younger, more. in-
dependent seniors while assisted living projects tend to attract older, more frail seniors.
While these four project types may be rental or for-sale, the majority of the for-sale projects aze
"adult"/few services with few supportive services.
Examples of all of these types of senior housing can be found in the Richfield study azea, al-
though only two for-sale projects that lack services (Woodlake Point Condominiums and Lake
Shore Drive Condominiums) and acongregate/optional services project (Village Shores) are lo-
cated within Richfield itself (the Primary Market Area).
In 1995, the Minnesota State Legislature passed the Elderly Housing with Services Registration
Act which was to be implemented on August 1, 1996. The act requires that a contract exist be-
tween the provider and the consumer and that all health-related services be delivered by a state`
licensed home care provider. In addition, the boazd and lodging with special services designation
for facilities that primarily serve seniors will be discontinued. The clear impact of this bill is not
45
known at this time, however, it is believed that the bill will primarily protect consumers and en-
sure quality health-related care.
First Quarter Senior Housing Update -Twin Cities Metropolitan Area
Maxfield Research Group inventoried all of he seniormarket rate housing projects in the Twin
Cities during the. first. quarter of 1996. The following. tables,. summarize results from this: survey.
Senior Housing Units by Service Level by Quadrant
A breakdown of these units by service level by quadrant are shown in -Table 14.
• The units surveyed were further. broken into the service level type:. "adult"/few services,
congregate/optional services, congregate/service intensive; and assisted living. A separate
ownership category is also shown in Table 14. As noted above, owner-occupied senior hous-
ing does not denote a servicelevel, but rather, indicates tenure. Ownership>projects could be
-,-- further classified by service level, however, the. majority are "adult"/few services and thus,
appeal to younger seniors who still see' a benefit in owning their housing.
\ • A total of 13;277 units were surveyed, X0.9 percent ofwhch are located in the southwest
quadrant. This area includes Richfield as well as'other major cities such as Burnsville,
Lakeville, Bloomington, Edina, St. Louis Park, Hopkins, Minnetonka, Eden Prairie,
TABLE 14
SENIOR HOUSING BY QUADRANT BY SERVICE LEVEL
TWIN CITIES METRO AREA
First Quarter, 1996
(Percent Of Units)
Adult Congregate Congregate
Few Optional Service Assisted Owner-
Quadrant Services Services Intensive Living Occupied Total
Mpls. 27.5 15.6 8,4 7.5 41.0 100.0
St. Paul 38.5 10.6 15.8 28.1 7.0 100.0
NW 27.0 33.1 15.5 15.9 8.5 .100.0
NE 49.4 8.7 7.6 22.0 12.3 100.0 .
SE 43.7 21.9 24.7 2.6 7.1 100.0
SW 15.5. 19.6 20.6 15.5 28.7 100.0
Total 3 0.1 19.2 15.2 16.1 19.4 100.0
Source: Maxfield Research Group
46
Chanhassen, Chaska, Jordan, Prior Lake, and Shakopee. The study area is included in this ~
quadrant, although data is presented separately for the City of Minneapolis. This percentage
is the lazgest of any of the quadrants, the cities of St. Paul, or Minneapolis. In contrast, the
southeast quadrant has the fewest number of senior housing units, equaling just 6.4 percent of
the metro area's total.
• The southwest quadrant has the highest proportion of congregate/service intensive, assisted
living, and owner-occupied projects. The high proportion of assisted living units is due to the
large number of units at Rembrandt in Edina, the Presbyterian Homes' campuses in Bloom-
ington and Spring Pazk, and Meadow Woods in Bloomington.
• Due to the high number of cottages projects in the northeast quadrant, the largest portion of
senior units in the northeast quadrant are "adult"/few services.
Vacancy Rates by Quadrant and Product Type
Table 15 presents vacancy rates by quadrant. and product type from the first quarter of 1996. A
_ vacancy rate of 5.0 percent is considered normal in a healthy rental market to allow for turnover
and consumer choice.
• Overall, the lowest vacancy rate in the first quarter of 1996 was in Minneapolis (2.1 percent),
while the highest vacancy rate was in St. Paul (8.6 percent). Only one other area, the north-
east quadrant, had a vacancy rate higher than, 5.0 percent.
TABLE 15
VACANT SENIOR HOUSING UNITS
BY SERVICE LEVEL BY QUADRANT
TWIN CITIES METRO AREA
First Quarter, 1996 _
Adult Congregate Congregate
Few Optional Service Assisted Owner-
Quadrant Services Services Intensive Living Occupied Total
Mpls. 1.7 ].5 5.7 1.6 1.9 2.1
St. Paul 1.8 0.9 6.3 25.0 1.4 8.6
NW 2.S 0.8 0.9 6.5 4.9 2.7
NE 7.6 0.4 1.9 8.4 l.5 6.0
SE 0.0 2.7 2.9 0.0 16.7 2.5
SW 3.1 0.9 3.0 9.1 1.0 2.9
Total 4.0 1.0 2.8 9.9 2.1 3.8
Source: Maxfield Research Group
47
• Two areas had exceptionally high vacancy rates within a service type during the first quarter:
St. Paul and the southeast quadrant. St.1~au1 had a 25.0`percent vacancy rate in its assisted
living projects, due primarily to the recent opening of Rosewood Estate in Highland Park.
Rosewood Estate -Highland Pazk opened in November 1995 with 106 units, 66 of which
were vacant at the time of the survey. In the southeast quadrant, there was a T6.7 percent va-
cancy rate in ownership projects. This was due to the 10 vacant units at Inverness Village,
which opened in February 1996 and was still in its initial absorption period.
Senior Housins By Year Built
Table 16 presents the number of senior housing units in the Twin Cities Metro Area by the yeaz
built.
- • Of the 13,277 senior housing. units in the Twin. Cities Metro Area, 10.4 percent were built be-
fore 1980, 58.4 percent were built during the 1980s, and 31.2 percent were built in the first
part of the 1990s.
_ • The lazgest number of senior housing units were built from 1985 to 1988, 5,503 units or 41.4.
- percent. During the 1990s, 30.8 percent of the units built were built in 1995.
Recent Development Trends in the Twin Cities Metropolitan Area
Current trends in senior housing involve the proliferation of two types of housing at opposite
ends of the service-provision spectrum. The first type is "adult"/few. services housing, which is
geared to younger, independent seniors and has very few,. if any, services. offered for an addi-
tional fee.. A good example of this type of housing includes the cottage-style developments that
have proliferated in the northeast Twin Cities metro area, while an example of a more traditional
"adult"lfew services apartment building in the study. azea is Masonic Square.
The econd type is assisted living housing, which is geared to older,. frail seniors and includes
personal care, medication reminders, and the availability of three meals per day. An example of
assisted-living housing in the study azea is the new Rosewood Estates in Highland Park, and
Meadow Woods and Heritage Hall in Bloomington.
Interviews with Senior Housing Professionals
Interviews were conducted with select senior housing developers and others knowledgeable of
the senior housing market in the Twin Cities and outside of Minnesota.. These interviews fo-
cused on trends that are occurring in the Twin Cities and nationwide, and demand for different
types of senior housing within the Twin Cities. The following .points summarize their comments.
• According to those interviewed, the greatest senior housing need currently in the Twin Cities
mazket is believed to be affordable housing for frail seniors, or affordable assisted living
48
TABLE 16
.NUMBER OF UNITS BY YEAR BUILT
SENIOR HOUSING PROJECTS
TWIN CITIES METRO AREA
First Quarter, 1996
Yeaz No. of Units Pct.
Pre-1980 10.4
-1980 523
1981 282
1982 178
1983 325
1984 565
1985 1,037
1986 .1,653
1987 1,222.
1988 1,591
1989 376
Subtotal 1980-1989 7,752 58.4
1990 414
1991 317
1992 674
1993 433
1994 735
1995 1,274
] st Qtr. 1996 296
Subtotal 1990-1996 (1st Qtr.) 4,143 31.2
Total 13,277
Source: Maxfield Research Group
housing, for low- to moderate-income rental with minimal services, and for affordable hous-
ing with assisted or support services for residents with dementia in a residential setting.
• The single greatest type of senior service currently in demand in the Twin Cities is afford-
able, .accessible health care. Also, responding to persons with early- to moderate-stage de-
mentia (in an affordable sense) is becoming a greater need. One interviewee stated that ap-
proximately 47 percent of the population age 85 and over has some level of memory loss.
• The impact of home health care on the Twin Cities senior housing market has been to keep
seniors in their homes longer, which has both negative and positive aspects. A negative as-
pect of home health care is that some seniors are likely not getting adequate care, nor are they
49
receiving any socialization. Additionally, home health caze has increased the vacancy rates at
many nursing homes. A positive aspect of home'healtl care is that. it allows senior couples to
be together longer in their home when the well spouse cannot handle all of the cazegiving.
Another positive of home health caze has been to inform seniors of a variety of resources
available for them.
• Clearly, the number one preference of seniors is to stay in their home, and that means that
frail seniors typically need to have home health Gaze delivered to the home.
• The future impact of home health caze depends on the direction of Medicaze/Medicaid. 1f
major changes aze made to either of these programs, they will have a direct affect on how
services are administered to seniors and where seniors live.
• Other financial programs will have a great impact on seniors and their ability to afford senior
housing and services. For example, reverse mortgages are becoming more popular -and it is
estimated that they will allow seniors to remain in their homes for a much longer period of
time. A reverse mortgage allows a senior to obtain credit from a lender based on the equity
in their home.
• New programs and ways of delivering services to seniors in the Twin Cities should include a
- broader range of clients and case management with the perspective that. residents are staying
in one place.
• New concepts seen in the Twin Cities senior housing market include hospitals becoming
more involved in the development of assisted living housing and in case management. In
addition, partnering of, or alliances between, organizations in order to pool their `resources
have enabled new ventures to be successful.. This is especially, true for organizations that aze
proficient in different skills.
• In St. Louis Pazk, a community similar to Richfield in age of population and housing stock, it _
was suggested that the city block off a four to six block area as a senior housing complex.
The area's streets would be blocked off,.-and some additional buildings would be constructed
for service providers. This concept has not been realized in St. Louis Pazk due to the land
costs involved, nor will it likely in the immediate future, however, the suggestion may pro-
vide abasis for some additional discussion.
• While the cottages-concept seems to be one of the most populaz senior housing concepts in
the Twin Cities, one interviewee believed that the mazket was tapped out. Several interview-
ees stated that they believed the units would be attractive to .single-pazents and young starter
families after vacancy rates rose and there was little senior demand for such projects. With
little or no common space,. the cottages projects are not expected to continue to be in strong
demand.
•
50
There appeazs to be more emphasis on exercise, wellness, and health programs. It is believed
that in the future, fewer projects will lock residents into a specified number of meals that are
included in the monthly fees.
• In addition to home health caze, community services for seniors are increasing. Adult day
Gaze was cited as an example of a service that is in demand.
New concepts seen outside the Twin Cities senior housing mazket include organizations in
Washington and New Jersey that have begun delivering services to households in retirement
communities. The programs generate revenue as well as big waiting lists for the communi-
ties. However, the organizations are typically non-profit organizations with a lazge support
base. It is not believed that this type of senior service administration will come to the Twin
Cities market.
• Another trend occurring outside the Twin Cities market is the development of housing com-
plexes open to a range of ages, not just persons age 55 and over. Planned-communities are
encompassing older adults and families as well as seniors. It is likely that if this approach to
w developing senior housing comes to Minnesota, it will be brought in by outside developers.
• Support services for seniors are integrating more volunteers than paid staff, particulazly in
Oregon.
Housing trends that are occurring outside of Minnesota that may eventually catch on here in-
clude freestanding memory loss communities. An example of this is in Ann Arbor, Michi-
gan, where the main project sponsor is a hospital, along with anon-profit organization.
When planning their mazketing, they have used absorption rates similar to assisted living
housing and have discovered that absorption has only taken about one-tenth of their initial
goals. Such projects are expensive and range from $130 to $150 per day. It is believed that
the key to their success will be in their programming and the ability to obtain and retain the
right staff:
• Factors that will influence senior housing in the next ten yeazs likely include the prediction
that the senior population will be healthier, thus causing a diminished emphasis on health
caze. In addition, senior housing will need more common spaces for active seniors. The
economy will also have a major impact on senior housing in-the ~ ~~+ ten yeazs. More spe-
cifically, the return on personal investment will impact what pea-:::: will choose to afford and
-where they can afford it.
The impact of new technology on senior housing and services for seniors during the next five
to ten yeazs will likely have the biggest impact in the azea of security. It will also ease the
coordination of services and will allow providers to diversify and expand services. In addi-
tion, there has been a definite trend towazd providing computer, modem, and extra phone
jacks in seniors' apartments.
51
• Cities. should be partnering with` non-profits who are familiar and successful at providing
senior housing with services. Additionally, they should be partnering with architects and de-
velopers who understand senior housing design needs.
C~
•
Subsidized Senior Rental Projects in the Study Area
Table 17 shows information on the subsidized senior rental housing projects located in the study
area. The data on the table was collected through a survey of each of these projects conducted by
Maxfield Research Group in June 1996. The table includes information on location, age of the
building, number of units, unit mix, number of vacant units, and any additional comments col-
lected during the survey.
Subsidized senior housing requires rents that are tied to the residents' incomes. A total of seven
senior subsidized projects with a total of 851 units were identified in the study area. There were
no units vacant at the time of the survey. Subsidized projects, because they are need driven,
typically have very low vacancy rates and a vacancy rate of less than 1.0 percent is common.
r Ridgeview Terrace is a 51-unit subsidized building that was built in Bloomington in 1991, fi-
., .. nanced through HUD's Section 8/202 program. All of the units have one bedroom and rents are
based on 30.0 percent of the tenants' adjusted gross income up to a market rent of $565 per
.month. The project has income restrictions of $19,100 for asingle-person household and
$21,850 for atwo-person household. The rents include heat, but the residents are required to pay
for electricity. The average age of residents is 79. The building includes a community room,
lounge, and library. It is managed by Presbyterian.Homes and home health care is available
through Presbyterian Homes' Gideon Pond senior housing campus.
Newton Manor also in Bloomington, is a 545-unit subsidized building that was built in 1986 and
financed through HUD's Section 8/202 program.. All of the units have one bedroom and rents
are based on 30.0 percent of the tenants' adjusted gross income up to a market rent of $548 per
month. The project has income restrictions of $19,1 OO for".asingle-person household and
$21,850 for atwo-person household. The rents include heat, but the residents are required to pay
for electricity.. The average age of residents is 81. The building includes a community room and
residents can access activities at the adjacent Gideon Pond senior housing campus:
South Haven and Summit Point are subsidized buildings that were built in 1983 in Edina. Both
are managed by CommonBond Communities. South Haven has 100 units financed through
HUD's Section 8/202 program.. Summit Point has 29 units financed through HUD's Section 8
program. All of the units in both buildings have one bedroom and rents are based on 30.0 per-
cent of the tenants' adjusted gross income up to a market rent of $555 per month. Each project
has income restrictions of $19,100 for asingle-person household and $21,850 for atwo-person
household. The rents include heat, but the residents are required to pay for electricity. The aver-
age age of residents is 76. Each building has a community room and transportation is provided
once a week for trips to the grocery store. Covered parking. is also available for $25 per month
per space.
52
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The Gardens at Gideon Pond opened in June 1993 with 86 units. Located adjacent to Gideon
Pond cooperative in Bloomington, the building is owned and managed by Presbyterian Homes of
Minnesota. The building has 40 studios with monthly fees of $1,870 to $2,020, 41 one-bedroom
units with monthly fees of $2,070 to $2,680, and five two-bedroom units with monthly fees of
$2,380 to $2,680. Fees include all utilities (except telephone), weekly housekeeping, twice
weekly trash removal, and 60 meals per month. There is an extra chazge of $300 per month for a
second occupant. Additional meals and home health care are available. for an additional fee. The
project currently has two studio units and one one-bedroom unit vacant.
There is a generous amount of common space in the building including a spacious, airy dining
room. There is also a private dining room, exercise room, craft room, solarium and community
room.
Heritage~ll opened in July of 1994 in Bloomington on the same campus as Masonic Squaze
and Minnesota Masonic Home. It is a 46-unit renovated boazd and care facility. A1146 units aze
studios with monthly rents ranging from $1,390 to $2,010.. The monthly fees include 60 meals
per month, scheduled transportation, activities, weekly housekeeping, and linen service. Addi-
_a tional personal care is available at an extra charge on an a la carte basis. Since the project is ad-
jacent to the Minnesota Masonic Home, residents aze welcome to use building amenities such as
the community room, craft room, and mini-store. At the time of the survey, the project was fully
leased and occupied with a waiting list of approximately 130 names.
Meadow Woods opened in Bloomington in June of 1989. It is a three-story, 108-unit building on
the campus of Martin Luther Manor. There. are 28 studio units with monthly fees ranging from
$1,560 to $1,985 and 80 one-bedroom units with monthly fees ranging from $1,990 to $2,070.
There is an extra charge of $395 per month for a second occupant in each unit. The monthly fees
include three meals (served restaurant style) and two snacks per day, scheduled transportation,
weekly housekeeping and linen service. Additional personal care is available at an extra charge
based on the service rendered. At the time of the survey, only one bed in one of the four semi-
private units was vacant.
Walker Elder Suites opened in July 1992. Developed by a partnership that includes Walker
Management and Development, the building is situated across the street from 7500 York Coop-
erative, a 338-unit congregate building. Currently seven of its 72 units are vacant. Most of the
units are efficiencies with less than 400 square feet, however, there are a few larger efficiencies
with a sepazate sleeping alcove as well as four one-bedroom units. The larger units have been
most popular with all of the one-bedroom units leasing immediately.
Monthly rents for one person range from $1,744 to $2,099 for the efficiencies, and $2,250 to
$2,341 for the one-bedroom units. Rents include all utilities except telephone, morning and
evening meals (lunch is optional for $4.25 per day), and weekly housekeeping/linen service.
There is a charge of $360 per month for the second occupant of the unit.
The building is very attractive inside and out, with ample common space including several
lounges. Units do not have full kitchens, just a hot plate and refrigerator.
72
Knox Landine in Bloomington was built in .1979 and has a total of 212 units; 158 units have one
bedroom and 54 have two bedrooms. The project is subsidized through HUD's Section 8 pro-
gram and residents pay 30.0 percent of their adjusted gross income. The project has income re-
strictions of $29;100 for asingle-person household and $33,300 fora two-person household.
The rents include heat, but the residents are required to pay for electricity. The project maintains
a-four year waiting list. The fifteen-story elevator building has a community room, pool, and
tennis courts.
Richfield Towers was built in 1978 and has a total of 150 units; 144 units have one bedroom and
six have two bedrooms. The project is subsidized through HUD's Section 8 program and resi-
dents pay 30.0 percent of their adjusted gross income up to the market rents of $559 per month
for the one-bedroom units and $622 per month for the two-bedroom units. Currently, there are
no tenants paying the market rent. The average rent paid by the tenants is $140 per month. The
average age of the residents is 78. The project maintains a waitingGist with 65 names. The
seven-story elevator building has a community room, craft room, and a common kitchen.
Yorktown Continental in Edina was built in 1974 and has a total of 264 units; 262 units have one
bedroom and two units (caretaker units) have two bedrooms. The project is subsidized through
HUD's Section 8/202program and residents pay 30.0_ percent of their adjusted gross income up
:~ - ' to the market rate rent. There aze, however, 26 mazket rate units.. At the time of this survey, the
market rate rent. was in the. process ofbeing readjusted for the first ime in five yeazs. Average
age of the residents is 79. The project maintains a waiting list with 50 names. `'The twelve-story
elevator building (main floor is offices) has a communityroom, dining room, hobby room, li-
brary, and a garden.
Market Rate Senior Housing
Tables 18 and 19 compaze 25 market rate senior projects (sixteen market rate senior rental and
nine ownership projects) identified in or near the. study area. There are currently eight senior
rental projects and three senior ownership projects located in the study area. Because some types
of senior rental housing aze limited in the study area, we have also-surveyed fourteen senior prot-
ects that aze located just .outside but near the study area. Of the sixteen rental projects surveyed,
two are an "adult"/few services project, six. are congregate/optional services projects, three are
congregate/service intensive projects, and five aze assisted living projects. A total of 2,069 units
in the rental projects were surveyed, of which 86 were. vacant (4.2 percent). However, one of the
projects, Rosewood Estates -Highland Pazk, was still in its initial lease-up period at the time o£
survey and accounted for 56 of these vacancies. Excluding this project, the projects surveyed
had a vacancy rate of only 1.5 percent.
Table 18 includes information on location, occupancy date, total number of units, unit mix sizes/
rents, and unit features, while Table 19 compazes the services and amenities offered at these
complexes. The information was collected by Maxfield Research Group in June of 1996.
55
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"Adult"/Few-Services
While this type of project has been very successful throughout the eastern metropolitan azea,
there aze currently only two "adult"/few-services projects in or neaz the study azea. The two
"adult"/few-services projects surveyed had a total of 190 units. There were six units vacant
among these projects, for a vacancy rate of 3.2 percent. The following is a brief description of
the only "adult"/few-services project in the study area.
Masonic Squaze, located in Bloomington, is unique in the Twin Cities in that it is an upscale
senior rental townhouse development. A first phase of 28 units opened in July of 1991 and a
second phase of an additional 28 units was recently completed in the Spring of 1996. It is on the
same property as the Minnesota Masonic Home (which also has an assisted living component)
and residents can therefore take advantage of a variety of services provided elsewhere on the
campus.. Rents vary from $1,002 to $1,785 per month for one-bedroom, two-bedroom and two-
bedroom plus den units. The finishing quality is very high in these units so that they have an
ownership, rather than rental, feel about them. Average age of residents is 77, with over half of
the units occupied by couples.
Con re ag to/Optional Services Projects
Six congregate/optional-services projects were surveyed for this study. The six projects have a
total of 834 units, and all but four were occupied at the time of the survey, for a vacancy rate of
0.5 percent. The following is a brief description of the only congregate/optional-services project
located in the study azea, Village Shores, which is located at the northwest corner of 66th Street
and Lyndale Avenue in Richfield.
Village Shores, with a 166 units, was converted from a general occupancy rental project to senior
rental project in Mazch 1995. The project is 10 stories and has 71 one-bedroom units with rents
of $720 to $840 per month, 39 one-bedroom/den units with rents of $880 to-$980 per month, and
56 two-bedroom units with rents of $1,080 to $1,120 per month. However, some residents are
still paying lower rents that were offered to seniors who wished to remain at the project when it
was converted to senior housing. These rents aze in the process of being brought up to the level
that new residents are required to pay; the rents that are shown on the table. The units feature
central air conditioning, dishwashers, garbage disposals, and balconies or patios. Building
amenities include a community room, hobby room, common coin-operated laundry on each
floor, exercise room, sundeck, woodworking shop, hair salon, and direct access to adjacent retail
shops at Mazket Plaza Shopping Center. Activities (coordinated by the manager), weekly trans-
portation for shopping, and an exercise program (three times per week) are also offered at no ex-
tra chazge. Optional meal services, served buffet style, include an evening meal Monday through
Thursday for $6.00, and a noon meal on Tuesday and Sunday for $4.00. At the time of the sur-
vey, the building was fully occupied and had a waiting list with 60 names. Average age of resi-
dents is 83 and the management stated they aze seeing more male residents than they have in the
past.
70
Congregate/Service-Intensive
to/o tional-services ro'ects were serve ed for this study. The three projects
Three congrega p P J Y
have:a total'of 627 units of which 17 units were vacant at the time of the survey for a vacancy
rate of 2.7 percent. The following is a brief description of two projects. found in the study area.
Edina Pazk Plaza is a 203-unitcongregate/service-.intensive project located in southeastern Edina.
The project was built in 1987 and consists of 126 one-bedroom units with rents of between
$1,190 and $1,955 per month, 28 one-bedroom/den units with rents of between $1,670 and
$.1,695, and 49 two-bedroom units with rents of between $1,685 and $2,420. The rents include
all utilities (except phone), housekeeping and.linen service two times per week, activities, and
weekly transportation.. The units feature central air conditioning, dishwasher, garbage disposal,
and emergency calls in the bathroom and bedroom. The building's common areas include a
- community room, dining room, library, hobby room, card room, whirlpool/sauna, exercise room,
and guest. suites.. At the time of the survey, there were 12 one-bedroom units vacant. Manage-
ment stated that there has been a big demand for larger units resulting in vacancies for their
smaller, one-bedroom units. The proj ect offers three optional meal packages; breakfast and din-
_ ner for $252 per month, lunch and dinner_for $278 per month, and three meals per day for $370
per month.
' Rembrandt is amulti-building congregate project in Edina which. has a total of 199 units. Af:
filiated with Heritage of Edina.nursing home, the first congregate apartment component opened
in 1964 making .this the oldest independent senior project in the Twin Cities. The project con-
sists of 141 studio units with rents of between $629 and $829 per month, 51 one-bedroom units
with rents of between $990 and $1,370-per month, and seven two-bedroom units with rents of
between $1,354 and $1.,500.. An optional lunch and dinner package is available for $250 per
month and breakfast is available for $3.SO;per meal "Assisted Living Plus" is a program which
consists of three meals per day, unlimited personal caze, one load of laundry-per week, and medi-
cation reminders. The program is not available to residents in the two-bedroom units.. The range
in total. monthly fees -for these units is between $1,825 and $2,500, depending on size of unit. At
the time of the survey, neazly 140 units were along advantage_of the "Assisted Living Plus" pro-
. gram.:
Rembrandt has always been positioned as aproject for frail seniors, but due to its age and design
(many small units), it has seen its turnover and vacancies increase. It turned to assisted living to
help maintain occupancy,. although five "Assisted Living Plus"units were vacant at the time of
our survey.
Assisted Living Proiects
There aze five assisted living projects in or neaz the study azea, with a total of 418 units. At the
time of the survey there were 66 assisted living units vacant, however, Rosewood Estates is still
in its initial .lease-up period and .accounted for 56 of the 66 vacant units. Excluding this project,
the projects surveyed had. a vacancy rate of 3.2 percent. The following is a brief description of
.the four assisted living projects located within the study azea.
71
Ownership Proi ects
Nine ownership projects were surveyed for this study, four of which. were in the study. area.
Ownership projects can vary greatly in the services they offer and the form of ownership. Of the
projects surveyed, two were condominiums that offer very few,. if any, services (Woodlake Point
and Lake Shore Drive), one was a cooperative that offers few services (Real Life), four were co-
operatives that offer some services{Becketwood, Gideon Pond, Nokomis Square, and 7500
York), and two were life caze projects that aim to provide a continuum of caze as residents age in
place (Walker Place and Friendship Village).. The nine projects have a total of 1,772. units and
21 of those units were vacant or for sale at the time of the survey for a vacancy rate of 1.2 ;per-
cent. The following is a brief description of the four ownership projects located in the study
area.
Woodlake Point is a 157-unit condominium project that was completed in February of 1986. It is
located on the northwest corner of 66th'Street and Lyndale Avenue in Richfield. The project has
66 one-bedroom units, 55 one-bedroom/den units, 32 wo-bedroom units, and four two-
bedroom/den units. Average sale prices in 1994 and'1995 was $66,850 for one-bedroom units,
.,. $75,150 for one-bedroom/den units, and $97,600'for two-bedroom units. There were no two- -~
bedroom/den units sold in 1994 or 1995. There is one, one-bedroom unit for sale. Currently,
_ association fees range from $129 to $250 per month, depending on the size of the unit. Included _
in the association fee are all utilities (except electric and phone), activities, and van transportation
(shazed with Lake Shore Drive). Building amenities include a gazden, community room, hobby
room, library, sundeck, whirlpool, exercise room, and guest suites. At the time of the survey, the
average age of residents was 74. The largest single group of residents came from the City of
Minneapolis (37 percent), followed by the City of Richfield (25 percent).
Lake Shore Drive is a 178-unit condominium project that was completed in September of 1982:
It is located on the southwest corner of 66th Street and Lyndale Avenue in Richfield. The project
has 84 one-bedroom units, 30 one-bedroom/den units, and 64 two-bedroom units. Average sale
prices in 1994 and 1995 were $48,292 for one-bedroom units and $80,850 for one-bedroom den
and two-bedroom units (one-bedroom/den units at Lake -Shore Drive aze mazketed as two-
bedroom units). There were two one-bedroom units for sale. Currently, association fees range
from $185 to $300 per month, depending on the size of the unit. Included in the association fee
aze all utilities (except electric and phone), activities, and van transportation (shazed with
Woodlake Point). Building amenities include a garden, community room, hobby room, library,
hair salon, cazd room, exercise room, car wash, and guest suites. At the time of the survey, the
average age of residents was 79. No specific information was available on where residents lived
prior to moving to Lake Shore Drive; the manager stated that nearly everyone was from
Richfield, Bloomington or southwest Minneapolis.
7500 York Cooperative is a 338-unit cooperative project located in the southeastern corner of
Edina that opened in October of 1980. It was sponsored by the Ebenezer Society. The project
has 185 one-bedroom units, 200 two-bedroom units, and 18three-bedroom units. The one-
bedroom units have an entrance fee (share value) that ranges from $18,515 to $23,357 with
monthly fees that range from $620 to $742. The two-bedroom units have a shaze value that
73
ranges from $27,597 to $31,556 with monthly fees that range from $847 to $1,056. The three-
bedroom units have a share value of $40276 with a monthly fee of $1,288. The monthly .fee
includes van transportation, activities, and all utilities, except phone. The units include central
air,.. dishwasher, garbage disposal, and emergency call systems in the bedroom, bathroom and
kitchen.... There is an optional evening meal, served restaurant style, for $4.40 per meal. Building
amenities include a community room,library, hair salon, garden, exercise room, and whirlpool.
At the time of the survey, the project was completely full with awaiting list of nearly 800 names.
7500 York has historically been in great demand and, therefore, maintained long waiting lists.
However, active names, more likely, constitute between 15 and 20 percent of the .list.
Gideon Pond Cooperative is a 101-unit .cooperative project located in Bloomington that was
completed in June of 1985. Presbyterian Homes sponsored the project and also maintains own-
ership of 39 units that they rent out at market rate. The project has. a total of 62 one-bedroom
- units, 15 one-bedroom/den units, and 24 two-bedroom units. The one-bedroom units have a
monthly fee that ranges from $296 to $317 or a monthly rentthat ranges from $730 to $830. The
one-bedroom/den units have a monthly. fee that ranges from $335 to $350 or a monthly rent of
$1,030. The two-bedroom units have a monthly fee that ranges from $346.to $415 or monthly
~. rent of $1,095. The monthly fee or rent includes van transportation, activities, and all utilities _
(except electric and phone). The units include central air, dishwasher, garbage disposal,
.__ washer/dryer hook-ups, and emergency call systems,in the bedroom and bathroom. There is an _
optional .evening meal, served restaurant style, for- $5.75 per meal.. Building amenities include a
community room, hobby room, library, walking trails, whirlpool, and guest suites. At the time of
the survey, only one one-bedroom and two one-bedroom/den units were available hrough the
cooperative and there were no vacancies for the rental units. The entrance fee (sales price) for
the units available through the cooperative ranged from $77,000 to $94,500.
Non Age-Restricted Rental and For-Sale. Multifamily Housing
Another housing alternative for independent seniors is non age-restricted market rate multifamily
housing, including condominiums, apartments, and townhomes. A thorough examination of the
market for these non age-restricted housing types was beyond the scope of this study, however,
all three types of multifamily housing will be attractive to seniors who seek to rid themselves of
home maintenance and who desire additional security.
In particular, single-level townhomes in the Twin Cities are attracting many empty-nester house-
holds. These households no longer have children living in them and often, the householders are
in their late SOs and 60s. It is possible that such projects exist in the study area and have at-
tracted independent seniors from Richfield.
Pending Projects
There are currently no senior developments pending in the study area communities of Edina and
south Minneapolis.
74
The following are new projects pending or proposed and are all located in Bloomington:
The Bloomington HRA stated that there is a proposal for an 80-unit independent senior project
located at the southwest corner of 98th Street and Lyndale Avenue. Presbyterian Homes is
working with an unnamed developer on the project. No other information was available.
The Bloomington HRA also stated that there has been discussion of possible senior housing at
the intersection of 86th Street and Nicollet Avenue. This site was regarded as the "old" Group
Health site. No other information was available.
Dick Hanson of Real Life, Inc. stated in an interview that they have procured land in the vicinity
of Lyndale and 106th Street. The proposed project for such a site would be similaz to their re-
cently completed project in Burnsville called Real Life Cooperative Burnsville. This proposal
has yet to reach either the Bloomington HRA or the Bloomington planning department because
neither organization was awaze of it.
Community Interviews
__ . Several Richfield .community leaders and residents were interviewed for this study. All of those
interviewed have some unique connection to the senior population in the area. The capacity in
which they aze associated with. seniors varies from social service providers to church pastors. A
list of persons interviewed is included in the appendix. Below is a summary of key points from
interviews.
• The number of public health visits from RN's and home health aides to senior households in
Richfield was 3,577 in 1995. This number has remained stable the past few years, however,
the Hennepin County public health department anticipates increasing numbers of visits in the
neaz future.
• Seniors that are requesting home health services aze getting much older and frailer.
• Maintenance type services, such as medication set-up or reminders, and personal care, consti-
tute the bulk of services being provided to seniors in Richfield.
• Seniors are staying in their homes longer.
• Many seniors aze staying in their homes longer because the existing choices for alternative
..housing aze too expensive.
• There is no affordable assisted living available for seniors in Richfield.
• Richfield has an .excellent community center, which is a big plus for seniors living in the
community.
75
• .The vulnerable elderly, the ones mho are weaker, who don't leave home, and more often than
not feel alienated, are the ones the community center can't seem to reach.
• The concentration of senior housing at the intersection of 66th and Lyndale is not a bad
situation, however, if additional housing were to be developed in Richfield, it would be better
to develop it somewhere other than this general location in order to diversify the senior
population slightly.
• The community center offers a variety of programs that range from fitness classes to educa-
tional programs. The center had over 55,000 visits in 1995. The greatest increase in num-
bers is coming from younger seniors, those between the ages of 58 and 65.
- Affordable housing for seniors is the biggest need, however, there are some who use the
.community center who could afford market rate housing.
• Any new development should be neaz public transportation,: and. there should be some flexi-
bility with the housing itself in order to meet changing .needs such as an aging in place situa- -~
tion or the increase in seniors expected from the baby boom generation.
• Seniors are not going to be moving out of their homes and replaced by younger families un-
less there aze viable options/alternatives for seniors in Richfield.
• The HOME program (Household and Outside Maintenance for the Elderly) contributed
services to 129 senior households in Richfield in 1995. The number of households participat-
ing in the program has slightly increased over the last few. years and the average age of paz-
ticipants has greatly increased over the past few yeazs.
• Annual evaluations of the HOME program from participants almost always indicates that cli- _
ents could not stay in their home without the program.
• Home health services are getting better, allowing seniors to stay in their homes longer, how-
ever, most agencies remain expensive with home health aides on average costing from $15 to
$16 per hour for services.
• The only subsidized senior housing in Richfield has a one to two year waiting list.
• If more market rate housing is developed in Richfield, it will only attract seniors from outside
.Richfield because they aze the ones who can afford it.
• Many seniors who can't get into the.Richfield Towers have to leave Richfield in order to find..
alternative housing.
•
76
• House of Prayer Lutheran Church use to house an adult day care facility run by Martin Lu-
ther Manor, but the program was discontinued because of a decreasing market.
• Many members of House of Prayer have moved from Richfield to any number of senior proj-
ects in southeastern Edina.
• Hope Presbyterian Church offers a phone check program for homebound members of their
congregation. Approximately 12 members take advantage of volunteers calling them on a
regular basis to check in and see how they are doing. They also organize handyman and
home maintenance projects on a regular basis to serve the senior members of their congrega-
tion.
• Martin Luther Manor currently has an adult day care facility offered at Hope Presbyterian.
• House of Prayer Lutheran Church, Hope Presbyterian Church, and Assumption Catholic
Church have over 6,000 members combined, of which 35 to 40 percent are seniors.
a. • A little less than half of the three churches' members are coming from Richfield. For each
church the percentage of Richfield residents has been dropping in recent years.
77
LONG-TERM CARE REVIEW
Nursing Homes
Nursing homes have historically provided the majority of services to the frail elderly needing
personal care and skilled level of services. Since the early-1980s the growth of new nursing
homes has been restricted through a state imposed moratorium on new beds. Occupancy rates of
the nursing homes in the market area have remained high, however, there has been a decline in
the demand by consumers who have the financial resources to utilize alternatives. Congregate
living facilities, assisted living facilities, and the growth of community based home health caze
services have all served to meet the growing senior population's needs and reduced the unneces-
nary use of nursing homes.
•
•
.The, State of Minnesota has adopted a policy which categorizes the level of care (and subsequent
reimbursement) into 11 categories. The policy was instituted to provide a meaningful way of
evaluating resident care needs for purposes of reimbursement. In brief, the process involves an
_- assessment by a registered nurse to establish the classification.. Persons are rated on their level of
dependency for eight activities of daily living (ADC's) on a scale of 1 to 6, depending on the
ADL such as dressing, grooming, and bathing. This results in a total. score which relates to
"Light ADL", dependent in 0-3 key ADC's; "Medium ADL", dependent in 4 to 6 ADC's; or
"Heavy ADL", dependentin 7 or 8 key.AD~'s. In addition, other factors aze considered in-the
classification, such as special nursing, behavior issues, and neuro-muscular conditions. Taking
all of these conditions into account, the final score relates to a case mix rating of "A", "B", "C",
etc. up to level "K", with case mix "A" being the lowest level of caze. The. State of Minnesota
has indicated a desire to place residents with case mix ratings of A and B in facilities
other than nursing homes. In fact, nursing homes will not accept people with a case mix rating of
A after- July 1996. Residents. in the other categories, however, notably G and H, are also likely
candidates for an assisted living project.
Maxfield Reseazch Group surveyed fourteen nursing homes in the study area in June 1996. Ta-
ble 201ists the year opened, total number of beds, number of vacant beds, number of residents
rated case .mix A or B, daily/monthly fees for residents rated case mix A or B, and specialized
units.
Most representatives of nursing homes in the study area reported that occupancy rates have been
stable over the past several years, averaging around 95.0 percent. However, there are two excep-
tions, according to interviewees. Richfield Care Center is licensed for 131 beds and is currently
operating at -less than 80.0 percent occupancy. The Director of Social Services for the caze center
cited several reasons for their recent decline in occupancy, most notably, the increased use of
home health caze. Nicollet Good Samaritan Center is licensed for 129 beds but 21 beds were re-
moved in 1995 due to a lack. of demand caused by the creation of options such as home health
care and competition among neazby nursing homes. Their occupancy rates have rebounded in
part due`to the decrease in beds and an increase in specialization. In fact, the Director of Nursing
stated that they aze beginning to see new admissions who aze coming from. assisted living
78
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projects because those facilities do not have the capabilities to handle residents with highly
skilled caze needs such assub-acute care or behaviorally challenged caze.
The survey of study area nursing homes found 67 residents rated case mix A and 59 residents
rated case mix B. Most representatives of nursing homes in the study area agreed that assisted
living housing could. better serve about half of these people, particularly residents rated case mix
A. One interviewee indicated that residents with lower incomes are better off in nursing homes
because assisted living projects do not accept persons who are receiving Medicaid.
The survey of study area nursing homes also found monthly fees of $1,770 to $2,220 for resi-
dents rated case mix A and $1,950 to $2,430 for residents rated case mix B. Rates for case mix
levels A and B aze important since these two categories combined will likely initially account for
a significant number of the residents at an assisted living facility. Typically, nursing homes are
more expensive than assisted living housing. The proportion of private pay residents has re-
mained relatively stable over the past several years at nursing homes in the study area, ranging
from roughly 5 percent at Bloomington Good Samaritan Center to roughly 40 percent at Martin
Luther Manor and Edina Care Center. Friendship Village and Heritage of Edina aze totally pri-
~- vate pay facilities, therefore, they do not have to follow the state's guidelines of case mix rating.
On the other hand, the Minnesota Veteran's Home is entirely subsidized, therefore, there aze no
private pay residents at that facility.
All fourteen representatives of nursing homes in the study azea agreed on several key points.
First, there is a trend towazd shorter stays for rehabilitation. Second, there is a trend toward spe-
cialized services and beds targeted to specific groups such as seniors suffering from dementia.
Third, seniors prefer staying in their single-family home for as long as possible and are often. frail
upon entering the nursing home. Many nursing home residents are widows in their 80s and 90s.
Finally, seniors have a wide variety of housing and service needs and it is critical to develop a
continuum of options to ease the transition from living in asingle-family home. Although sev-
eral interviewees mentioned that there is a lack of affordable senior housing with intensive serv-
ices, one person stated .that to begin large scale subsidizing of home health care or assisted living
would result in even larger reductions of nursing home occupancy rates.
Board and Care Facilities
Maxfield Research Group surveyed four board and care facilities in the study area in June 1996.
All four of the facilities are located within existing nursing homes (Friendship Village, Minne-
sota Masonic Home, Mount Olivet Careview Home, and Minnesota Veterans Home). Residents
of board and care facilities undergo the same screening process as nursing home residents, how-
ever, they often require a lower level of care. Thus, most residents of a board and caze facility
will be rated a case mix A, B, or C. At the time of the survey, there were a total of 295 beds, of
which three were unoccupied. Daily rates for semi-private room ranged from $67.71 ($2,040 per
month) for a resident rated case mix A to $92.89 ($2,790 per month). for a resident rated case mix
C. It should be noted that Friendship Village is entirely aprivate-pay facility, therefore, their
rates do not necessarily correspond to state guidelines of case mix rating, and the Minnesota
81
Veteran's Home is entirely subsidized, therefore, they do not have a daily rate that would be
charged to a resident.
•
•
COMMITNITY ISSUES RELATED TO SENIOR HOUSING
Introduction
The Richfield HRA asked Maxfield Research Group to review specific issues related to the im-
pact of new senior housing development on the community as part of the study on senior housing
in Richfield. This section of the report addresses each of these issues.
Benefits of Senior Housing
The development of new senior housing presents many potential benefits to the community.
New senior housing development:
1. increases the property tax base for all levels of government (city, county, school dis-
trict);
-- 2. gives existing senior residents more housing options not currently available, thus al-
lowing them to remain in the community, close to friends and relatives;
3. seniors. who remain in the community will continue to shop and utilize professional
services (such as banks and medical services) rather than in another area, thus adding
economic benefit to the community;
4. allows single-family homes to become available for younger families desiring to live
in the community (particularly important for fully-developed first-ring suburbs) thus
.refreshing the housing stock since younger buyers will typically remodel;
5. retains senior residents who are a community asset; persons over age 65 have the
highest rate of volunteerism of any age group.
Seniors. who remain in Richfield rather than moving to other cities help to stabilize the popula-
tion and household base and increase the diversity of the age distribution of the population. They
shop in local stores, eat in local restaurants and conduct other types of business. Although sen-
iors utilize some community services that are provided at taxpayer expense, conversely, they pay
property taxes (even if indirectly through rent) to the local school district even though they do
not have children in the public schools. An assessment of tax revenues and costs is included in
the appendix.
Creating Family Housing Opportunities
As noted above, when seniors move to housing designed specifically for them, they usually sell
their single-family homes. A major reason for moving to senior housing is to escape the cost and
trouble of maintaining asingle-family home. They may have lived in the house for decades,
however, after their children have left home and perhaps after their spouse has died, they no
longer need the space their single-family home provides. When they sell their home, it is usually
to a younger household, often afamily. -
83
Some real estate agents .specialize in selling seniors' homes. -Often: when anew senior project is
built, the developer of the project will work with a specific real estate agent to assist prospects
with selling their homes. The city could participate. in this process, offering assistance to fami-
lies desiring to purchase a home in Richfield or buyers of homes of a certain age. These buyers
could utilize the remodeling and transformation programs available through the city. Advertising
seniors' .homes for-sale in city publications may be another way the city could encourage home-
ownership among younger residents of Richfield. or families -not currently living in the commu-
nity.
Seniors Residing in NORCs (Naturally Occurring Retirement Communities)
Many market rate general occupancy buildings have aging residents, some of whom may have
- lived. in the building for many years and are now. retired.. These buildings are referred to as
NORCs, Naturally Occurring Retirement Communities.. One issue raised as part of this study
was whether these seniors can be served in their current general occupancy apartments_instead of
building new, senior-specific housing.
^ Seniors can continue to live in these apartment projects unless physical. characteristics of the
._ , building present problems for the residents due to aging. Some of these characteristics can often
be dealt with easily: adding handrails in hallways or improving lighting, for example,. Other
chazacteristics may be more difficult to change.. A multi-story building without an elevator is
often a major obstacle for frail seniors yet adding an elevator is a significant expense.
A second consideration is the support service needs of seniors, assuming that physical problems
with the buildings can be overcome. The addition of support services can assist seniors who
wish to remain independent, but can be costly to seniors,whemthese services aze purchased by
seniors individually. Building management may want to bring services to the building in order
to keep their senior. tenants, who are generally excellent residents. In addition, the buildings _
themselves may have physical limitations to the provision of services. A meal program, for ex-
ample, requires a common dining room if one. goal of the program is to encourage socialization
among home-bound seniors.
Key services. needed by seniors as they age are:
• transportation to business and medical appointments and for regulaz shopping
• chore services.:
• housekeeping
• ~ delivery. of groceries and drug store items
• meals
• activities
• encouraging socialization, often through a meal and/or organized activity programs
• medication reminders
•
84
Arrangements can be made with community non-profit organizations or private firms to provide
many of these services. Buildings .with: a high concentration of older residents could be targeted,
thus allowing for efficiencies. Anew senior development can deliver support services to resi-
dents much more efficiently and at a lower cost compared to delivering services on a scattered-
site basis.
Strategies to Ensure Richfield Seniors Benefit From New Senior Housing Development
A substantial portion of the new or converted market rate senior housing built in Richfield since
the 1980s has been occupied by persons who moved to Richfield from other communities. Some
of these person had children or other relatives living in Richfield while others moved from
adjacent communities (i.e., South Minneapolis) due to an association with Richfield for. shop-
ping, church membership or other community activities.
If the city assists with development of senior housing with a primary goal being to serve Rich-
field residents, several strategies can be used to encourage occupancy of the new housing by
_- Richfield residents or family members of Richfield residents. First, the marketing campaign
could initially target Richfield residents. Direct mail advertising could be directed first to per-
..: _ sons in Richfield.. Presentations to senior groups, always an important part of marketing; could
first be made to organizations in Richfield (i.e., senior clubs, church groups).
Second, a program could be established to give Richfield residents preference for the project
during an initial marketing period. The City of Plymouth successfully implemented such a pro-
gram with the details presented below.
Example of a Senior Housing Preference Program
The use of a preference system for residency ofcity-sponsored senior housing projects was used
by the City of Plymouth when its Plymouth Towne Square senior building was marketed in
1994.. The rents for this project are quite modest, ranging from $585 for one-bedroom units to
$740 for two-bedroom units. Rents are lower for residents who meet Low Income or Very Low
Income guidelines. Demand for this building was quite high and in order to ensure that the proj-
ect served Plymouth residents, the following preference system was established:
1. Applicant is 62 years or older and a resident of Plymouth who meets income limits as
Low or Very Low;
2. Applicant is 62 years or older with immediate family living in Plymouth and appli-
cant meets income limits as Low or Very Low;
3. Applicant is between age 55 and 61 years and a resident of Plymouth who meets in-
come limits as Low or Very Low;
4. Applicant is between age 55 and 61 years with immediate family living in Plymouth
and applicant meets income limits as Low or Very Low;
5. Other applicants.
85
A Resident of Plymouth is defined as a person(s) who has lived in Plymouth for at least 12 con-
secutive months (past or present). Very Low income"limits are $17,350 for a single person and
$19,850 for a couple with the rent equal to 30 percent of their Adjusted Gross Income (maximum
subsidy of $435 per month). Low income limits are $27,800 for a single person. and $31,750. for
a couple with rent equal to 33 percent of their Adjusted Gross Income (maximum subsidy of
$165 per month). (Income amounts were in effect at the time of initial occupancy of the building..
in 1994).
According to the Plymouth HRA, 70 percent of initial residents of Plymouth Town Center were
from preference category 1 (current resident of Plymouth, age 62 or older) and 27 percent were
from preference category 2 (a relative of current resident of Plymouth). This indicates that the
preference program; was highly successful in attracting current senior residents of Plymouth or
their family.
Conversion of Existing General. Occupancy Apartments to Senior .Housing
One .alternative to new construction to serve. seniors' housing needs is to convert existing
general-occupancy buildings to senior housing. This serves. several purposes: first,' it meets the
-, goal of providing senior-specific housing. and hus achieving many of the benefits of senior
housing noted above; second, conversion .functions to recycle housing that may no. longer be
suitable to the general occupancy market (or in oversupply in the market) to better meet the
needs of a changing renter population; ..third, buildings which maybe in need or rehabilitation
can be upgraded as part of the conversion process... .
The cost of converting an existing building (making necessary physical changes, updating and
repairs) is often a barrier to conversion for the private sector. An analysis of the financial aspects
of converting existing buildings to senior housing was beyond the scope of this study, however,
it is likely that most buildings that could be converted in Richfield would require-some form of _
government assistance.. The addition of elevators to multi-story buildings, common spaces such
as a dining/community room, crafts room, library,: etc. and certain modifications to allow for
residents with limited mobility (i.e., ramps for wheelchairs, handrails in hallways, improved
lighting) as well as general redecoration will be required at most buildings 'considered-.for .con-
version in Richfield. While rents for these buildings after conversion. can be well above existing
rents, often the increased rent will not be .enough to cover the cost of conversion and additional
operating expense. For example, aone-bedroom unit may rent for $450 per month currently.. In
a converted project after rehabilitation, the potential market rent may be $550-per month. How-
ever, in order to pay for the conversion/rehabilitation, the rents may need to be $650 per month.
The cost for converting a building to senior housing depends on the condition of the building and
the level of rehabilitation and overall physical changes required. In general, Maxfield Research
Group estimates that the cost could easily reach $20,000 per unit. Thus, a 50-unit building could
require an investment of $1,000,000, not including acquisition costs, to convert the building and
make it suitable for seniors.
86
Tushie Montgomery Associates, Inc. and William Schatzlein (consultants to the City of Rch-
field) conducted a review of the cost to convert a "typical" Richfield apartment complex to senior
housing. Their analysis indicated a cost per unit of about $28,000. Arent increase of about $300
per month would be required to finance the conversion as planned by Tushie Montgomery, not
including the increased real estate taxes based on the value of the project after rehabilitation.
In order to accomplish a conversion and yet keep the rents affordable to seniors, the city may
need to provide financial assistance to the developer of the project. The City of Brooklyn Park
became a partner with Lang-Nelson in the conversion/rehabilitation of Cedarbrooke Apartments
to senior housing, now known as the Water#`ord, in order to keep rents affordable.
Choosing the right building for conversion is critical. First, the project should be'in~location ap-
propriate for senior housing (see Site Criteria chapter of this report). Second, physical character-
istics of the project should be evaluated to determine if it is a good candidate for conversion. For
example, a project with a number of smaller buildings (fewer than 15 units) may not be suitable
since the cost of adding an elevator to each building is spread among fewer units compared to a'
larger building. A building which already has a party room that can be used as community space
:~ will eliminate the need to convert a unit to that purpose. -
Working with an experienced developer who has built/converted senior housing will result in a
better project overall than a developer who does not have senior housing experience. The finan-
cial implications of the conversion process for each building being considered along with the
goals of the city should be evaluated before proceeding with theproject. The cost to the city may
be deemed reasonable if multiple goals can be accomplished.
87
CONCLUSIONS AND RECOMMENDATIONS
Introduction
Maxfield Research Group was retained by the City of Richfield to examine the demographic and
competitive factors: that influence the potential demand for new. senior housing in Richfield,
Minnesota. The study includes recommendations for new senior housing development as well as
a discussion of the potential to convert existing .general occupancy apartment buildings to senior
housing.
The Demographic Review section of this report analyzed factors relating to demand for senior
housing in the study area. Our research showed an increasing senior base in the study area.
- During the 1980s, the senior population increased by 6,018 .persons (25.8 percent) and the num-
ber of senior households, a more important indicator of housing demand than population, in-
creased by 4,320 households (29.4 percent). in the study area.. Forecasts indicate that both the se-
nior population and household base will continue to increase through 2000 and then decline
v through 2010: However, an increase in the number of older seniors (those age 75 and over) is
forecast to occur through-2010 for the study area. This is the primary market for housing with
support services.
The Rental Market Analysis section of the report focused on the current: supply of rental. housing
in and near the study area. This sectionof the study revealed thatthere are limited housing op-
tions-for seniors in the study area and thus, senior housing projects located just outside but near
the. study area were also.. examined. A total of twenty-five market rate senior projects (with a
combined total of 3,841 units) and seven subsidized rental projects (with a total of 851 units)
were urveyed. The results of the survey. showed that the- market for senior housing in the study.
area is currently very tight. This section also included interviews conducted with social service
workers, building managers and other persons familiar with the housing market in Richfield.
- The vast majority of the individuals interviewed endorsed the idea. of market rate senior housing
in the study area. Our interviews indicated strong demand for market rate. senior housing and,
since there is very little senior housing product in Richfield, many seniors are forced to move out
of the area to find alternative housing options or remain in their homes for as long as possible,
often with the aid of home health care. These factors indicate that there is potential to develop
senior housing in the study area.
The following text outlines potential target markets .and .suggests appropriate development con-
cepts for new housing, provides guidelines for converting existing structures to senior housing,
and provides guidelines for site selection of senior housing. Specific project recommendations
which fall within these development concepts are included as well as a focus on the number of
units, unit mix, unit sizes, monthly rents or purchase prices, design features, amenities, and pro-
jected absorption for the suggested housing projects..
It is important to note that an independent senior project typically attracts 25 percent or more of
its residents from outside the community and an assisted living project typically attracts as much
88
as 50 percent of its residents from outside the community. As such, a senior project in Richfeld
will likely attract a number of seniors from outside of Richfield unless development sponsorship
by the city occurs, in which case priorities can be set for residency of the project. This has been
implemented successfully at other projects in the metropolitan area, notably Plymouth Towne
Square in Plymouth.
We recommend that further review of this project or similar projects be conducted if-the City of
Richfield chooses to implement a priority entry system in a future senior building.' finis system
may be particularly appropriate at a senior housing complex with project-based assistance.
Independent Living Senior Housing Demand
Demand for Subsidized Senior Housing
The current income qualifications for subsidized housing are $27,800 for cone-person household
and $31,75D for atwo-person household. Seniors near the upper level of these guidelines
a. (roughly $25,000 and above) can afford market rate housing without financial assistance. In
addition, many senior households in lower income categories own their own homes and have
.untapped equity which, upon the sale of the home, can be invested with the proceeds used dollar
for dollar for alternative housing. Finally, research has indicated that most seniors will pay in
excess of 30 percent of their income (the "affordable" income guidelines) in order to live in
housing that meets their lifestyle needs or desires. Most seniors will pay 40 percent or more of
their income for independent housing, while seniors seeking assisted living housing will pay 75
percent or more of their income for housing with extensive support services.
Based on these factors, we have estimated demand far subsidized senior housing as indicated in
Table 21. First, we have assumed that all of the 935 households with incomes below $15,000 per
year in Richfield are qualified and would be a market for subsidized housing (3,396 households
in the SMA). Second, we have assumed that senior homeowners in the $15,000 to $24;999 cate-
gory would not be a market for subsidized senior housing. Based on the data in Table 12, 19.3
percent of Richfield's senior households and 22.9 percent of the SMA's senior households rent
their housing. Applying these proportions to the senior household base with incomes of $15,000
to $24;999 results in 193 additional low-income households in Richfield and 664 additional low
income households in the SMA who may need subsidized rental housing. Thus, the total, subsi-
dized senior market base is 1,128 households in Richfield and 4,060 in the SMA.
Households in the $15,000 to $24,999 category who do not own their homes may still be a mar-
ket for "affordable" housing; that is, rental housing with below market rents but not the deep
subsidy types of housing such as Section 8 projects. This may also include a portion of senior
householders with incomes below $15;000.
We have assumed that one-quarter to one-third of the subsidized senior market base will both
need and desire housing for low-income seniors. The remainder will prefer to remain in their
single-family home or prefer to move to (or remain in) general occupancy units, generally older
89
buildings with very modest rents. A portion of this,market will prefer "affordable" units, those
with rents of $SOO to $800. Moderate-income seniors could afford these units and may find them
preferable to subsidized projects.
•
Based on the above assumptions, there would be a need for about 280 to 370 subsidized units in
Richfield. Subtracting the existing 150 units at Richfield Towers and the estimate of 90 seniors
utilizing Section 8 vouchers, there remains potential for 40 to 120 subsidized units in Richfield.
This demand could be satisfied by the- development of a high-rise project similar to Richfield
Towers, if subsidies and government funding are available, or by the .conversion of an existing
apartment complex if financially feasible. Finally, a portion of this demand could be satisfied by
an affordable project withbelow market rents rather than a project with rents.tied to the
resident's household income.
TABLE 21
SUBSIDIZED SENIOR RENTAL HOUSING=DEMAND.
RICHFIELD STUDY AREA
- JULY 1996
Richfield SMA
~_ ----
Households with annual incomes below $ 15,000 935 3,396
Households with annual incomes. between $15,000 and $24,999 1;000 2,900
Percentage of households who renttheir housing x 19.3 x 22.9
193 664
Subs}dined senior market base
Percentage of market base needing/desiring low-income housing
(25-33%)
Subsidized senior market housing demand
Source: Maxfield Research Group
•
1.,128
= 282-372
4,060
=1,015-1,340
Based on the approach mentioned above combined with needs determined through community
interviews, we suggest the development of an additional 80 to 100 units of either subsidized
senior or affordable senior housing in Richfield.
.Suggested Development Concept -Subsidized Senior Project
We recommend that the 80- to 100-unit project have a mix of mostly one-bedroom units since
the primary market will be single seniors (mostly widows). A few two-bedroom units should be
included for married couples or other family members (i.e., two sisters) sharing a unit. Rents
90
should be based on the. tenants' ability to pay, such as 30.0 percent of their adjusted gross
income. The one-bedroom units should be about 650 to 700 square feet in size and two-
bedroom units should beat least 850 to 900 square feet.
While most government funding programs will not allow subsidized. developments to incorporate
a wide array of amenities and unit features, we suggest that this project try to incorporate the
following amenities: an elevator, a security entrance, common coin-operated laundry, commu-
nity room, amulti-purpose room (for crafts, hobbies, °~:c.), storage lockers, wall-unit air condi-
tioning (or at least air-conditioning sleeves), and detached garages for an additional charge.
Demand For Market Rate Senior Housing
Table 22 presents our calculations of long-term and short-term demand for market rate independ-
ent senior housing in the study area. This text, however, focuses on demand for senior
TABLE 22
MARKET RATE SENIOR RENTAL HOUSING DEMAND
RICHFIELD STUDY AREA
July 1996
Richfield SMA
Senior Household Base in 1995 4,620 16,780
(less) Subsidized Units Occupied by Seniors - 150 - 701
(equals) Non-Subsidized Senior household Base = 4,470 = 16,079
(times) Long-Term Interest at 15% x 0.15 x=0.15
(equals} Long-Term Interest in 1995 = 670 = 2,412
(less) Existing Occupied Market Rate Senior Units+ -170 -1,105
(equals) Long-Term Demand in 1995 = 500 = 1,307
(times) Short-Term Interest at 30% x 0.30 x 0.30
(equals) Short-Term Demand through 1998 = 150 * = 392
(equals) Long-Term Demand after 1998 = 350 = 915
* Demand has been satisfied by Village Shores.
+ Assumes that one-quarter of demand would've been generated for ownership units rather
than the existing total in Richfield. Village Shores counted as part of current demand.
Source: Maxfield Research Group
91
housing in Richfield. It should be noted-that the table shows strong demand for additional senior
housing in the SMA. This is in part due to the large base of senior households in the Minneapo-
lis portion of the SMA where little senior housing exists. It is' possible that senior housing built
in Richfield will attract these seniors in the absence of new development in the SMA.
In order to determine demand for market rate senior housing, results from past studies conducted
by our firm, other consulting firms, and nonprofit agencies have-been used. These studies have
shown that roughly 15.0 percent of the non-subsidized seniorhouseholdhase has along-term
interest in moving to market rate senior housing. Based on this figure there would be long-term
demand for 670 units (4,620 - 150 = 4,470 x .15 = 670 units). From this figure, we have as=
sumed that ownership demand will comprise one-quarter of the total and renter demand three-
quarters of the total. Thus, there is long-term demand for about 170 ownership units and 500
rental units. Lake Shore Drive and Woodlake Point have a total of 335 units, indicating excess
supply of senior ownership housing and reflecting the lazge proportion of residents of these
buildings who moved from outside of Richfield. Although additional ownership housing could
be supported in Richfield, it is likely that a lazge proportion of its residents would come from
outside the community.
These same studies have shown that about 30.0 percent of those with along-term interest in
..,. moving desire to move within the next three yeazs (or about 4.5 percent of the total non-subsi-
dined senior household. base). Applying the 30.0 percent factor representing short-term demand
to the long-term demand of 500 units results in short-term demand for 150 units.. Since Village
Shores just converted to senior housing last year, we have considered it part of current demand.'
Thus, Village Shores, with 167 units, has satisfied all of the current demand for mazket rate
rental units in Richfield. Additional demand for market rate rental housing will exist by 1999,
however.
A second method to verify that the short-term -demand calculations presented above are reason-
able into calculate the penetration rate of the age/income-qualified senior households in the _
PMA. We have assumed that the age-income qualified market for market rate senior housing is
seniors age 70 and over with incomes of $20,000 or-more. Since seniors are willing to spend as
much as 40.0 percent (sometimes more) on senior housing with services and features they desire,
a senior with an income of $20,000 would be willing to spend about $670 per month for housing.
While the 40.0 percent income allocation is higher than what most younger households are will-
ing to spend on housing (generally 20.0 to 30.0 percent of their incomes), younger households
have other expenses such as raising children, making major purchases (e.g., appliances, furniture,
etc.), and saving money (for retirement and their children's education). We have estimated that
the age/income-qualified group totals 1,939 households in the PMA.
Thus Village Shores, the only project now satisfying current demand for;market rate senior
housing, will have achieved a penetration rate of 8.1 percent (assuming 100 percent occupancy).
A community can expect along-term demand for-mazket rate housing of at least 20.0 percent of
the income-qualified senior base. We have not indicated the level of penetration with the addi-
tion of the two ownership projects in Richfield since this overstates the demand for this type of
senior housing.
92
Recommended Development Concept -Market Rate Independent Senior Housing
As previously mentioned, we do not believe that demand exists at this time for market rate inde-
pendent senior housing. As current residents of Richfield age in place, and seniors with adult
children living in Richfield desire to move to Richfield, demand will continue to increase. A
market rate senior building would be supportable in Richfield by 1999. Therefore, the City of
Richfield should consider proposals with longer lead planning times that would result in a market
rate project that would come on-line in 1999.
Based on demand calculations, we recommend the development of a market rate independent
senior project in Richfield that would meet approximately one-third of the remaining long-term
demand, or 110 to 120 units. This project could be either ownership or rental.
Recommended Development Concept -Affordable Senior Housing
Given the size of the low- and moderate-income senior household base in Richfield, we do be-
lieve there is demand for an affordable senior building, one that crosses the market segments of
subsidized and market rate senior housing. This type of project could be a new construction,
cottage-style or three-story elevator building, or could be a conversion of an existing apartment
building to senior housing. Cottage-style projects have proven very successful throughout the
eastern metropolitan area. These projects have typically been geared to low- to moderate-income
seniors and, usually have received some sort of financial assistance, with Minnesota Housing Fi-
nance Agency's (MHFA}Tax Credit program being the most prominent source, in turn for
keeping rents modest. Currently, however, that program is not available for development of
senior housing.
The following are our suggestions for project types to fulfill demand for affordable housing units
for seniors in Richfield. These recommendations are not meant to replace either subsidized or
market rate housing projects in Richfield, but to fill a niche between the two. However, if af-
fordable housing for seniors is built in Richfield, it will take away a portion of the demand for
both subsidized and market rate senior housing. Based on the size of the senior household base
with incomes from. $15,000 to $24,999, we believe that as many as 100 units could be supported
in the short-term in Richfield.
Suggested Senior Cottage-Style Project Concept
Cottage-style units aze by their nature aloes-density product type and we are aware of the. fact
that little land is available in Richfield for new residential development. Thus, demand for this
type of senior housing certainly exceeds what could be provided without huge redevelopment
costs. Nevertheless, it may be possible to find a site of roughly two or three acres that could ac-
commodate 25 to 30 cottage-style units.
This project would consist of single-story units with private entrances. Attached garages are
preferable but detached gazages are also incorporated into these projects. The units should fea-
ture acontemporary design and include a standazd amenity package with central air conditioning,
93
dishwashers, garbage disposals, a utility room with laundry-hook-ups, walk-in closets, and pat-
ios. If the size of the project enables it to' be feasible, we also suggest that the project incorporate.
a club house/community room, to encourage socialization among residents. While recreational
or social amenities are uncommon in these types, of projects, a few of the larger ones have incor-
porated community rooms, craft rooms; laundry facilities, garden. plots, and even guest suites
into their developments. ,However, if -cottage-style units are developed adjacent to another senior
building, additional shared common areas could also be incorporated (i.e., dining room, library,
exercise room, etc.) into that structure.
Table 23 presents our suggested unit mix, unit sizes, and monthly rents :for the cottage-style
units. We believe an appropriate unit mix to be one-third one-bedroom units, one-third one-
bedroom plus den units, and one-thirdtwo-bedroom units. The one-bedroom units should be
between 700 and 750 square feet in size with monthly rerits of $525 to $575.($.75 to $.77 per
square foot). The one-bedroom plus den units should have 800 to 850 square feet and rent for
$600 to $650 per month ($.75 to $.76 per square foot). The two-bedroom units should have 900
to 950 square feet and monthly rents of between $650 and $700 ($.72 to $.74 per square foot).
The one-bedroom plus. den units should have one and one-half bathrooms and the two-bedroom
,- units should incorporate one and three-quarters bathrooms so that the units-can have both a tub
and awalk-in shower. Water, sewer, lawn care,. and trash/snow removal should beincluded in
the monthly rents, but not heat, electricity, or garages. The monthly: rents are quoted in 1996
dollars and can be trended up by 3.0 to S.O percent annually, depending on market conditions.
Our research indicates that the suggested senior project would be very successful and should
reach stabilized occupancy (defined as 95.0 percent occupied) within two months of opening,
TABLE 23
SUGGESTED UNIT MIX/SIZES/RENTS
COTTAGE-STYLE PROJECT
July 1.996
No. of Units Unit Type Size/Sq. Ft. Rents
~_
33% 1BR 700-750 $525-575
33% IBR/Den 800-850 $600-650
33% 2BR 900-950 $650-700
25-30 units
* Rents are quoted. in 1996 dollars and include all
utilities.except electricity andtelephone.
Source: Maxfield Research Group
Rent/Sq. Ft.
-_
$.75-.77
$.75-.76
$.72-.74
94
based on a 25- to 30-unit project. This absorption period assumes. that 40.0 to 50.0 percent of the
units will be preleased and that the remaining units will lease at an average rate of eight units per
month. These estimates are based. on the assumption that no other pending project will be mar-
keting at the same time and that the site of the projectwill be appropriate for senior housing. We
strongly recommend that a new cottage-style project open in-the spring or earhr summer, to take
advantage of the peak leasing and home-selling season.. If other pending projects are marketing
at the same time, or if the project opens in fall, the absorption period could be extended.
Suggested Conversion of an Existing Aparrment Building to Senior Housing
The conversion of an existing building to senior housing may make more sense than building
new. First, it is difficult to develop affordable senior housing without significant government
assistance. Tax credits, a vehicle for financing many affordable senior projects during the 1990s,
are no longer available for development of senior housing. Second, there are a number of
buildings in Richfield which could be considered for conversion to senior housing.
Unit rents should be at roughly the same levels as the suggested cottage-style project, except that
_.~ heat should be included in the rent. The unit mix will depend on the configuration of the build-
ing chosen for. conversion. We do not recommend changing the unit mix in existing buildings,
due to the cost of construction when combining or dividing units. Therefore, it would be ideal to
convert a building. with an appropriate unit mix, generally one-third to one-half one-bedroom
units and one-half to two-thirds two-bedroom units. A mix significantly different from this could
extend lease-up.
Since most existing buildings lack the typical amenities found in senior projects, certain design
features and amenities will need to be added. We recommend the following:
• attractive landscaping with garden areas available for residents use;
• upgrading other components of the exterior where necessary, particularly the entry;
• redecoration of common areas to include ample lighting as well as to present a fresh, clean
appearance in the entry foyer, hallways and activity spaces;
• refurbishment of units with new appliances, carpeting and fresh paint; new kitchen cabinets
and counters may also be necessary;
• addition of an elevator is essential;
• providing a lounge area near the entrance to the building and mailboxes, if the size of the
building warrants;
• a community room with adjoining kitchen for social gatherings, activities and occasional
congregate meals;
• ample storage somewhere in the building (preferably on each floor) if in-unit storage is not
available; and
• garage parking in a ratio of .6 to .8 spaces per unit; detached spaces can command rents of
$40 per month.
95
We recommend you tour the Waterford. in Brooklyn Park which was converted from a general
occupancy building (the former Cedarboolce Apartments) to affordable senior housing by a part-
nership consisting ofthe City of Brooklyn Park and Lang-Nelson. This project has been very
successful as a senior development. _
Assisted Living Demand
Demand Calculations
Currently, there is no established method of reimbursement for housing and services at assisted
living projects. Thus, low-income seniors who need extensive support services or health care
have no alternative to a nursing home. Middle-income and upper-income'seniors, however, can
move to an assisted living facility which offers a variety of services (many included in the basic
monthly fee) and still enjoy some level of independence in a setting- far less institutional than a
nursing home. Previous research has indicated-that seniors will spend 75 percent or more of their
income on housing and support services. Some seniors will even spend down assets to live in
-_ senior housing with services rather than move to a nursing home.
-_ The age/income-qualified base for assisted living is defined as senior households age 75 and over
who 1) have incomes of $25,000 or more per year or 2) have incomes of $15,000 to $24,999 and
who own their own home. A senior with an income of $25,000 per year could afford a monthly
fee of roughly $1,560 per month for housing-and basic support services (i.e., meals, housekeep-
ing, etc.), based on an income allocation of 75.0 percent for housing. However, there is also a
portion of senior households with incomes of between $15,000 and $24,999 that could afford
assisted living housing if they supplement their income with the equity from-the sale of their
homes.
Table 13 shows that the median selling price for resale housing in Richfield was roughly $97,000
during the first five months of 1996. This is the lowest of all the districts included in the study
area except the Nokomis district in Minneapolis. If a senior sold their home for the median price
of $97,000, they could have additional income of roughly $450 per month if the proceeds were
invested at an interest rate of 6.0 percent. This interest yield is typical ofgovernment-issued
bonds and could be higher or lower, depending. on the bond and the term of the bond. (Sale price
of $97,000, less 7.0 percent marketing costs = 90,210, x .06/12 = $451) Furthermore, our expe-
rience with other assisted living projects has revealed that many seniors will spend an even
greater proportion of their income on housing and services, sometimes even spending down as-
sets in order to live in a facility that meets their needs.
Table 24 presents our calculations of assisted living housing demand. The age/income-qualified
household base includes the 928 older senior households in Richfield with incomes of at least
$25,000 plus the owner portion of Richfield's senior households with. incomes between $15,000
and $24,999. As Table 12 shows, roughly 72.0 percent of all older senior households in Rich-
field owned their housing in 1990. If this portion is applied to the number of older senior house-
holds with incomes of $15,000 to $24,999 in 1995, than there is a potential for an additiona1377
96
households (523 households x .72 = 377) that could afford monthly. fees associated with assisted
living housing. Thus, the age/income-qualified market for assisted living housing equals 1,305
households. The same figure for the SMA is 4,907 households or a total of 6,212 households in
the entire study area.
The age/income-qualified household base is then reduced to reflect those households that need
assistance with daily activities (e.g., bathing, dressing, meal prepazation, light housework, etc.)
since demand for assisted living units is need driven. Based on studies done by private, non-
profit, and government organizations, it is estimated that 30.0 percent of older seniors need assis-
tance on a daily basis. Applying this figure to the 1,305 qualified households (as shown in Table
l l) translates to an assisted living market base of 392 households. However, most of these per-
sons will prefer to remain,in their homes with home health caze, or they may have a spouse or
other relative assist them with their needs. Our firm and others in the industry have used 25.0
percent as the penetration rate of the assisted living .market base for assisted living units. Thus,
there would be a demand for 98 market rate assisted living units from seniors in Richfield and
368 units from seniors in the SMA. While there is some overlap in demand with mazket rate
TABLE 24
AGE/INCOME-QUALIFIED MARKET
ASSISTED LIVING RENTAL HOUSING PROJECT
RICHFIELD STUDY AREA
July 1996
Richfield SMA
Senior Households Age 75+ with incomes
over $25,000 in 1995 928 3,838
With incomes between $15,000 and $24,999 523 1,549
(times) Home Ownership Rate (need to sell for additional income) x .72 x .69
= 377 1,069
Age/Income-qualified households 1,305 4,907
Percentage needing support services/assistance x .30 x .30
Age/Income-qualified households needing assistance = 392 1,472
Penetration Rate x .25 x .25
Age/Income-qualified households needing assisted living housing = 98 = 368
Source: Maxfield Research Group
97
congregate housing, most persons who would need to live in such a facility would be too frail to
function in a congregate setting and more than likely would need more intensive support services
typically offered only in a residential Gaze facility or a nursing home.
Financial assistance for assisted living services is limited currently, but should be pursued. If the
market was broadened to include low-income seniors, demand would increase by another 44
units from seniors in Richfield. Another option to provide support services for low-income.
households is through adult foster caze licensing. Facilities with these licenses aze able to get
state funding through elderly waiver. programs. While these facilities offer support services
similaz to assisted living facilities, these projects typically do not have independent apartment
units nor do they have amenities or common areas that an assisted living facility would have.
It should be noted that a significant portion of the demand for any assisted living facility, typi-
cally 25.0 percent or more, generally comes from outside a given study area.
We interviewed the administrative. staff at nursing homes in the study azea. These interviews
indicated that there aze an estimated 27 to 28 private-pay residents in the nursing homes with a
-- case mix rating of A or B in the study area. However, in Richfield, there aze only 1 or 2 private-
.pay residents of nursing homes with a case mix rating of A or B. While these residents aze a po-
tential market for assisted living units, we prefer not to include them in the demand because this
is a current snapshot and represents only aone-time potential market and likely will change by
the time any assisted living facility comes on-line. However, it does give an idea of the magni-
tude of the potential supplemental demand for assisted living units.
Interviews conducted with professionals familiaz with the needs of frail seniors in Richfield indi-
cated that as the. senior population base continues to age, the need for housing with intensive
support services will increase and that if assisted living services could be extended to seniors
with lower incomes, then demand for this housing would increase proportionally.
Recommended Development Concept -Assisted Living Facility
To be conservative, we do not recommend construction of an assisted living project to 100 per-
cent of the demand quantified in Table 24. As indicated in.Table 25, we recommend an assisted
living project of between 70 and 80 units.
We,recommend that approximately 30 to 40 percent of the units be studios with .400 to 450
squaze feet. with monthly rents of $1,400 to $1,500,... approximately 50 to 60 percent of the units
have one bedroom and 550 to 650 squaze feet with monthly rents of $1,600 to $1,800, and ap-
proximately 10 percent of the units have two bedrooms. with 850 to 900 squaze feet with monthly
fees of about $2,000.
98
TABLE 25
SUGGESTED DEVELOPMENT CONCEPT
ASSISTED LIVING PROJECT
RICHFIELD
July 1996
Unit
Unit Mix Unit Monthly
Type (Pct.) Sizes Fees*
Studio 30-40 40G-450 $1,400-1,500
IBR 50-60 550-650 $1,600-1,800
2BR 10 .850-900 $2,000
* Monthly fees, quoted in 1996 dollars, include all
utilities (except phone), weekly housekeeping
and linen service, 60 meals per month, 24 hour
_ supervision and emergency response, organized
activities, and transportation.
Source: Maxfield Research Group
We recommend that monthly fees include:
• 60 meals per month (an average of two per day, utilized at the residents' discretion);
• all utilities except telephone;
• weekly laundry and linen service;
• weekly housekeeping;
• 24-hour emergency response via pull-cords and pendant system; and
• organized activities.
Services available on an optional basis should include:
• medication reminders;
• escorts to meals/tray service;
• personal care such as assistance with bathing, dressing; and
• transportation to doctor's appointments.
These support services will appeal to seniors who desire security, socialization, and some help
with completing daily living tasks. We also recommend providing an "I'm O.K." check pro-
gram.
99
The suggested montlily fees aze at the lower end of the spectrwm of monthly fees for assisted
living-projects in the southwest azea of the Twin Cities (see Table 18) -but reflect the more mod-
est incomes and home values of seniors in Richfield compared to other parts of the southwest
azea.
The suggested project should be designed to reflect contemporary architecture and superior-fin-
ishing. The building should have a residential rather than an institutional feel.
The units should include private .bathrooms with walk-in showers, mini-blinds or-other window
coverings, raised outlets; levered door handles, and air conditioning (central air is preferred).. It
would be nice to add balconies, patios, or bay windows to extend living space since the units will
be small; however, this is not essential and may be too costly. We recommend providing ample
closet space and storage closets in each unit or at least .extra storage available on each floor.
There should also be free common laundries on each floor for those residents who wish to do
their own laundry.
Common space should be provided to encourage socialization and allow'for the provision of
-- support services. A dining room and full kitchen should be included for the meal program. The
dining room can also double as anall-purpose.:community room. A lounge near the entranceto
. the building is recommended to provide a place for residents waiting for visitors, rides, or mail.
A guest suite may also be included for visiting friends and relatives of residents and can com-
mand fees of $40 per night. A crafts room is also important. because hobbies are .sometimes
messy and should have a dedicated space. A screened porch is recommended along with a ter-
race or patio to extend living space outdoors in good weather.
Surface pazking at the assisted. living project will be necessary for visitors, but garages`and/or
underground parking need not be included because the mazket-for assisted living units aze older,
frail seniors who. generally do not drive. You may want to include six. to eight detached garage
spaces for residents who desire to maintain their cazs. Although the cazs will not be used, seniors _
often wish to keep them as a link to independence. Detached gazages can command rents of $40
per month.
We recommend that all avenues of possible financial assistance, such as alternative. care grants or
the development of a county program, be explored to assist low-income residents. Until a more
formal mechanism for reimbursement through medical assistance or Medicaze is established, the
majority of low-income seniors will be unable to afford the monthly fees associated with assisted
living projects. If these funds are attainable, these services could be extended to the recom-
mended subsidized senior project.
Recommended Site Location -Assisted Living Facility
While the concentration of seniors at the intersection of 66th and Lyndale was noted as cause for
concern for-some interviewees, there aze many positive attributes associated with having a type
of senior housing campus, or several types of senior housing located neaz each other. For exam-
ple, there aze efficiencies in service delivery and projects may act as feeders for one another as
100
seniors in independent buildings age and prefer: to move to buildings with a greater number of
services. For these reasons, it is appropriate that an assisted livingbuildingbe built in the vicin- ~
ity of the 66th and Lyndale intersection.
Demand For Long-Term Care Facility
The need for long-term facilities should decline somewhat over the next two decades following
national trends away from institutional housing. In addition,. more seniors aze choosing to re-
ceive home health care and other types of alternative housing types such as congregate housing,
adult foster caze facilities, and assisted living facilities. Furthermore, the State of Minnesota has
indicated a desire to place residents with lower case mix ratings in facilities other than nursing
homes and has recently adopted a new case mix rating which would prohibit seniors in need of
only support caze (those with lower case mix ratings) from entering nursing homes. As previ-
ously stated, this will increase demand for alternative care facilities (i.e., congregate housing,
boazd and lodging, adult foster caze facilities, and assisted living facilities). However, it is our
opinion that congregate housing .and assisted living facilities are the better options in that they
-- provide individualapartmentsand promote..independence. If enough of these types of facilities
are made available, we do not see. the need to develop along-term caze facility in Richfield over
the next two decades.
101
SUGGESTED HOUSING DEVELOPMENT.-PLAN
Introduction
Based on the suggested housing developments identified in the Conclusions and Recommends-
tions section of this report, Maxfield Research Group has recommended a senior housing
development plan for the City of Richfield. This plan places priorities-on these developments
and outlines a course of action to .fulfill the housing needs of the senior community.
Ideally, all of the suggested senior projects should be developed by the private sector, however,
instances may arise in which city involvement may be needed in order to keep development costs
and, in turn, rents and purchase prices, down.. This is true for,both the subsidized project. and the
affordable housing concepts.
-:-- There are two primary avenues: to providing affordable housing: controlling the cost of devel-
opment and reducing the cost to consumers. The cost of development .can be controlled by fur-
. _ Wishing- incentives. to the developer. This may include .cash or land grants as well as favorable fi-
nancing terms. In addition, assessments for infrastructure`such as'streets and utilities can be
shared with or borne by the municipality. Reduction in the cost to consumers can be achieved by
direct subsidies, typically based on income as is the-case with persons receiving Section 8 asss-
tance.
Senior Rental Development
We believe the most immediate need for .housing in Richfield is alternative housing for seniors _
and recommend that the senior projects suggested in the Conclusions and Recommendations
section be developed within the next few years.. While any new. developments would likely free
up single-family homes within the community, we feel that an assisted living project should be
given priority because of the lack of this type of housing in Richfield.
As mentioned, the development of these projects. would. free-up single family homes that would
appeal primarily to first-time buyers and, to some extent, the move-up market. The development
of these projects would in turn create a need for access #o first-time buyer financing programs
and rehabilitation programs in order to make these homes more marketable for first-time buyers.-
The development. of the "affordable" senior rental project could probably be financed without the
.need for substantial assistance, but the city would likely need to provide some incentive, such as
TIF to encourage- development by the private sector and, more importantly, keep rents modest.
Also, in order for the project to provide the services cost effectively, there would be a need for
involvement by either a local or regional .health care organization, the city, or the county.
102
A number of financing tools could be used either separately or in conjunction with each other to
assist in the development of a subsidized senior project. Federal and State programs that should
be considered include:
* HUD Section 221 d;
* HUD Section 202;
* HUD Section 8 Certificate Program;
* Public Housing Development;
* RECD Section 515;
* MHFA's Housing Trust Fund;
* MHFA's Low- and Moderate-Income Rental Program; and
* MHFA's Affordable Rental Investment Fund.
Location of Multifamily Development
The scope of this report precludes selecting sites for suggested multifamily development. Loca-
-- tion is a critical consideration for any rental or townhome development. Key issues-are:
* surrounding land use, with ideal sites being located on the edge of other
residential development (important for all multifamily housing);
* proximity to commercial development such as grocery shopping, banks,
and the post office (especially for subsidized or low-income rental hous-
ing and senior-specific, rental or owned, housing);
* proximity to churches and community services such as a senior center or
public library (especially for senior rental housing or any multifamily
housing geared towards seniors); _
* proximity to government social services (especially subsidized or low-in-
comae rental housing); and
* proximity to health care (especially for senior rental housing).
Other elements that would be assets to multifamily development are natural amenities (such as
parks or lakes) and good visibility (especially important to the success of large rental properties
that need to encourage walk-ins).
Implementation of Recommendations
We have developed `a time-frame of recommendations to be implemented within the next three or
four years, and for five years and beyond.
103
In developing financial programs to assist-with the purchase, maintenance and development of
subsidized or affordable senior housing, the-city should focus on housing programs offered by
federal and state agencies, point ventures. between non-profit organizations and the city,. and the
city's or county's own financial resources.
Over the next three or four yeazs:
* Encourage the development of several types of senior housing. Even if the city
begins now to encourage private and non-profit developers to build in Richfield, it
could take three years before a project would actually be built.
* The recommended rental projects in order of their necessity aze:
1) 70 to 80 units of assisted living with moderate fees,
2) 80 to 100 units of either "affordable" or subsidized units, (including 25 to 30
units of cottage-style townhomes)
In five to eight yeazs::
_ , * Demand will exist for additional market rate congregate units similaz to Village
Shores.
* Additional demand will exist for affordable units.....
104
Appendix
APPENDIX A
LIST dF INTERVIEWEES
RICHFIELD STUDY
June 1996
Name Title/Department Organization
Moraine Byrne Owner Moraine Byrne and Associates
Mary Jo Grace Owner Grace. Management
Ken Ward Vice President of Marketing Walker Methodist, Inc.
Bernice Olson Marketing Walker Plaza & Westwood Ridge.
Audrey Wagner Director of Home Care Division Bloomington Public Health
Camillo DeSantis Retired Social Worker
- Lil Hipp Director Richfield Community Center
Betty Crouch Director HOME Program
Deb Hoger Administrator Senior Community Services/Outreach Frogram
Joanne Olson Congregate Dining Program Richfield'Community Center
Father Mike Assumption Catholic Church
Pastor McKinley House of Prayer Lutheran Church
Bob Radatz Assistant Deacon Hope Presbyterian Church
-~ Bill Anderson Real Estate Agent Century 21/Red Carpet _.
Gene Bassett Real Estate Agent Gene Bassett Realty
Betty Jo Norman Real Estate Agent Edina Realty
Donna Berquist > Real Estate Agent Great.Minneapolis Realty Company
Shannon Tlourde Real Estate Agent ` Burnet Realty.'
Jill Henrichs Social Service Director Richfield Health Center
Mary Leber Director of Nursing Friendship Village of Bloomington
Cele Director of Nursing Eagle Nursing Home
Marge Social Service Director Martin Luther Manor, Inc.
Laura Bauer Social. Service Director Bloomington Care Center
Kris Sohn Director of Nursing Bloomington Good Samaritan Center -
Kim Admissions Minnesota Masonic Home Care Center
Jean. Chapman Social Service Director Heritage of Edina Health Care Center
Linda Johnson Director of Nursing Edina Care Center
Jean Director of Nursing Nicollet Good Samaritan Center
JoAnne Director of Nursing Regina Terrace
Rick Social Service Director Walker Southview
Tammy Social Service Director Mount Olivet Care Center
Jay Inwood Social Service Director Minnesota Veterans Home
Bonnie Clark Executive Director ' Senior Resources and Housing, Inc.
Gary Bidne Executive Director. Ark Development, Inc.
Mike Burton Owner/Developer New Cities, Inc.
Note: This list excludes our surveys of rental properties.
Source: Maxfield Research Group
106
APPENDIX B
SURVEY OF WOODLAKE POINT CONDOMINIUMS RESIDENTS
As a part of this study, Maxfield Reseazch Group surveyed the residents of Woodlake Point
Condominiums in Richfield to assess their perception of the need for additional senior housing in
Richfield, and to assess their reasons for moving there. A similaz questionnaire was proposed for
Lake Shore Drive Condominium residents, however, the association boazd declined our request
to survey their residents.
A one page questionnaire. was provided with apre-stamped envelope during the third weekof
June, and an example of this is provided after this summary. Residents were asked to fill out the
confidential survey and mail it back to Maxfield Reseazch Group by July 8, 1996. Of the 150
surveys distributed, 112 surveys were returned, a return rate of neazly 75 percent.
Previous Place of Residence
One survey question asked Woodlake Point residents what city and state they resided in before
moving to the building. The following point summarizes the highlight of Table A.
• The lazgest percentage of respondents were from Minneapolis (37.5 percent), followed by
Richfield (25.0 percent), and the southern Twin Cities suburbs (i.e., Bloomington, Edina)
(11.6 percent). In total, 74.1 percent of the respondents were -from within the study azea that
is being used forthis study. The remainder were from the northern Twin Cities suburbs,
TABLE A
PREVIOUS PLACE OF RESIDENCE
WOODLAKE POINT RESIDENT SURVEY
July 1996
Question: What city and state did you live in prior to moving to Woodlake Point?
No. Pct.
Richfield (PMA) 28 25.0%
Minneapolis 42 37.5%
South Twin Cities Metro Area 13 11.6%
North Twin Cities Metro Area 2 1.8%
Outstate Minnesota 7 6.3%
Outside of Minnesota 11 9.8%
No Answer 9 8.0%
Total ] 12 100.0%
Source: Maxfield Research Group
107
outstate Minnesota, and from cities-and states other than Minnesota. Nine respondents did
,not answer. the question.
Most Attractive City Characteristic
The survey also asked residents which city characteristic most attracted them to Richfield, with
possible answers including: near their former neighborhood/city, Richfield's location within the
Twin Cities, access to shopping and retail facilities, proximity to adult children, and other. Table
B presents these answers and the following points summarize the respondents'. answers by the
respondents' previous place of residence.
TABLE B
MOST ATTRACTIVE CITY CHARACTERISTIC
wOODLAKE POINT RESIDENT SURVEY
~, July 1996
Question: What city characteristic most'attracted you to Richfield?
(Answers presented by previous place of residence.)
Near former Location Access to Proximity to
neighbor./ in Twin shopping/. adult No
Number city. Cities retail facil. children Other Response
Richfield (PMA) 11 1 8 1 7 0
Minneapolis 12 8 l8 0 4 0
South Twin Cities Metro Ar 2 1 8 1 l 0
North Twin Cities Metro Ar 1 0 1 0 0 0
Outstate Minnesota 2 1 3 1 0 0
Outside of Minnesota 2 0 4 4 1 0
No Answer 1 3 1 0 1 3
Total 3l l4 43 7 14 3
Percent
Richfield{PMA) 35.5% 7.1% 18.6%
Minneapolis 38.7% 57.1% 41..9%
South Twin Cities Metro Ar 6.5% 7.1 % ] 8.6%
North Twin Cities Metro Ar 3.2% 0.0% 2.3%
Outstate Minnesota 6.5% 7.1% 7.0%
Outside of Minnesota- 6.5% 0.0% 9.3%
No Answer 3.2% 21.4% 2.3%
Total 100.0% ] 00.0% 100.0%
Source:; Maxfield Research Group
.14.3% 50.0% 0.0%
0.0% 28:6% 0.0%
14.3% 7.1% 0.0%
0.0% 0.0% 0.0%
14.3% 0.0% 0.0%
57:1% 7.1% 0.0%
0.0% 7.1 % 100.0%
100.0% 100.0% 100.0%
1U8
The majority of the respondents stated that they Richfield was attractive to them because of
its local access to shopping and retail facilities (38.4 percent). The second-most attractive
characteristic was the location of Richfield in relation to their former neighborhood or city in
which they lived. Only 6.3 percent of the respondents stated that they moved to Richfield
because of the proximity to their adult children.
• Analyzing the responses by previous place of residence reveals that those residents who-had
previously Lived in Richfield were. most attracted to the city because they were used to living
there (39.3 percent) and because of the access to shopping and retail facilities in the Richfield
area (28.6 percent). Of those residents originally_from Minneapolis, the majority (42.9
percent) were attracted to Richfield because of its access to shopping and retail facilities.. An
equal number of residents who moved to Richfield from outside of Minnesota moved
because of the access to shopping and because of the proximity to adult children.
Area Dislikes/Concerns
Woodlake Point residents were also asked what, if anything, they disliked about the azea in
' which they live. The question was open-ended and as a result, some respondents answered the
question with more than one response. Therefore, the total number of responses shown on Table
C does not equal the total number of respondents. The following points summarize these
answers.
• Neazly one-third of the respondents did not answer the question regazding dislikes about the
azea in which they live, indicating satisfaction with their neighborhood.
• The most common dislike of residents at Woodlake Point was the noise from the airport
(17.7 percent). In addition, 16.9 percent stated that the noise from 66th Street was also
distracting. The third-most common response was that the resident did not dislike anything
about the area.
• The influx of crime coming into the area from the core city was another dislike cited by 9.2
percent of respondents. Many of the comments about the influx of crime included a racial
component as well. The remainder of the comments involved concerns over the parking at
the building because it was considered to be inadequate, and the types and level of activity at
Champps, Bridgeman's and other area businesses.
Preferred Future Senior Housing Development Types
The last question on the survey asked what type of senior housing development the resident
would like to see developed, if any, in Richfield. The question was open-ended, with no options
to choose from. Table D presents a summary of responses. Approximately 59 percent of the
respondents did not answer the question, however, the recommendations of those residents who
did answer the question are summarized below.
109
TABLE C
AREA ' DISLIKES/CONCERNS
WOODLAKE POINT RESIDENT SURVEY
July 1996
Question: What, if anything, do you. most dislike abo ut the area in which you live?
No. Pct.
Airport Noise 22 17.7%
66th Street Traffic and Noise 21 16.9%
Crime/Racial Bias I 1 8.9%
Parking Concerns 2 1.6%
-
Champps-Related Activity
4 ,
3.2%'
Bridgeman's-Related Activity 2 1.6%
Other Area Business-Related 3 2.4%
Other 7 5.6%
Do Not Dislike Anything 12 9.7%
No Answer 40 32.3%
-; - - Total 124 * 100.0%
* Number will not add to total respon dents because some respondents had more than one an -
Source: Maxfield Research Group
TABLE D
PREFERRED FUTURE SENIOR HOUSING DEVELOPMENT TYPES
WOODLAKE POINT RESIDENT SURVEY
July 1996
Question: What, if any, types of senior housing would you like to see developed. in Richf
No, Pct..
None 14
Assisted.. Living. Housing
(Housing with Services) 6 5.4%
..Nursing Home 3 2.7%
Condominiums/For-Sale
(Similar fo Woodlake Point) 6 5.4%
Low Income/Affordable Hsg. 4 3.6%
Other 13 1 l .6%
No Answer 66 58.9%
-Total 112 100.0'0
S
f
ource: Max
ield Research Grou
P
110
• The largest percentage (12.5 percent) of those respondents who answered the final question
stated that they believed there was no need for any other type of senior housing development
in Richfield. This could reflect the fact that their housing needs were already being met.
• An equal number of respondents (5.4 percent each) stated that assisted living housing
(described in detail by some respondents as housing with services and the types of services
that should be included) and for-sale condominiums should be added to the senior housing
stock in Richfield.
• Finally, other responses included a nursing home and low-income (affordable) housing,for
seniors.
111
•
•
RESIDENT HOUSING QUESTIONNAIRE
INSTRUCTIONS: The purpose of this questionnaire is to help determine where residents in
senior housing projects in Richfield have moved from and what amacted them to Richfield.
Please check only one response per question. All responses will be confidential
Please mail in the enclosed envelope by Monday, July 8, 1996.
1. What is your age?
Under age 55 Age 70 to 74
Age 55 to 59 Age 75 to 79
Age 60 to 64 Age 80 to 84
Age 65 to 69 Age 85 and over
2. What is your annual household income, includin g salary or wages, Social Security benefits, etc.?
Under $15,000 $35,000 to $39,999
$15,000 to $19,999 $40,000 to $44,999
$20,000 to $24,999 $45,000 to $49,999
$25,000 to $29,999 $50,000 to $74,999
$30,000 to $34,999 $75,000 or over
3. Including yourself, how many persons live in your household?
1 person 3 persons
~~. 2 persons 4 or more persons
4. How long have you lived afWoodlake Point?
Less than one year 3 to less than 4 years
1 to less than 2 years 4 to less than 5 years
2 to less than 3 years 5 years or more
5. What city and state did you live in prior to moving to Woodlake Point?
b. What city characteristic most amacted you to Ri chfield? (Check ONE only.)
Near former neighborhood/city Proximity to-adult children
Location within the. Twin Cities Other:
Access to shopping/retail facilities
7. What project characteristic most attracted you to Woodlake Point? (Check ONE only.)
PriceNalue Knew other residents of Woodlake Point
Location Other:
Building. amenities/unit features:. (Specify:
8. What, if anything, do you most dislike about the area in which you Iive?
9. What, if any, types of senior housing would you like to see developed in Richfield? Why?
THANK YOU FOR YOUR TIME!
• c~TY OF RICHFIELD
Memorandum
DATE: February 12, 1997
TO: Tom Melchior, Executive Director, Maxfield Research Group
FROM: Bruce Nordquist, Housing and Redevelopment Manager
SUBJECT: Senior Housing Cost/Revenue Analysis
The Richfield HRA requested further evaluation of the cost of additional senior housing
and the impact on revenues. An extensive search found little data other than the
anecdotal information we shared. However, working with the City of Richfield's Fire _
Safety and Recreation Services Division and the County Assessor's office, the
following information can be added in support of your discussion on the benefits of _
senior housing development.
• 1. Public Safety Services (Source: Steven Sutter, Assistant Fire Chief)
The 25 members of the F.I.R.E. Division provide Fire suppression, Inspection,
Rescue. and Education services to citizens and visitors throughout Richfield annually
handling about 700 Fire calls, 2500 emergency medical calls, over 2000 inspection and
5000 education contacts.
F.I.R.E. services are provided to the four seven-story or higher residential
buildings in our town. I visualize each floor of these buildings as a stereotypical
neighborhood block but instead of the 7-12 blocks being spread out flat, they are
stacked upon each other.
Fire: Fire suppression is quicker, safer, and easier than in private residences due to
such built-in fire protection factors as: smoke detectors and alarm systems, automatic
fire sprinkler systems, self-closing fire doors, automatic smoke control and ventilation
systems, etc. We have had. about a half dozen fires in the four buildings which have
been kept to minimum property loss by the synergy of the staff, built-in fire protection
features, and quick response by competent .personnel. Various Fire personnel are
involved in the planning, building inspection, and fire emergency pre-planning for
high-rise facilities more than any other structures in town.
Inspections: Inspections are conducted by Fire personnel approximately annually
for safety and code enforcement. Private residences are not systematically inspected.
• However, even though more inspections are therefore conducted as the result of high-
rises, a combination of factors including competent building management staff helps
maintain the safe condition of the buildings year-round not just the day of and a few
days after a fire inspection.
Rescue: Comparison of emergency medical responses to each of these "blocks" is
similar to a flat block, perhaps slightly higher due to the over 55 age of all residents.
Access to patients is usually better than private residences and the presence of elevators
is significantly better for patient to ambulance transfer. I estimate approximately 100
of our 3,100 average annual emergency responses go to the four high rises and the
Richfield nursing home.
Education: Educational programs are typically conducted at half of the high-rises
each year. This ratio is about the same as our Neighborhood Fire Safety
Demonstrations conducted on street corners during summer evenings. Facilities and
resident turn-out are better in the high-rises whose occupants seem willing and able to
learn about fire and safety.
Cost assumptions: Perhaps it is best to emphasize "assumptions" here for a variety
of reasons beyond the scope of this memo. The. Fire Division budget is about $1.9
-- million. Allocating expenditures among 3,100 emergency responses assumes an
average of about $600 per response.
In summary, the F.LR.E. services provided to high-rise residential structures are
significant and compatible with the mission and the resources of the Fire Division.
2. Recreation Services (Source: Lil Hipp)
The Community Center serves three constituencies:
• senior recreation programs; fitness, dayout trips, congregate dining, for
example.
• adaptive recreation programs.
• general use requests for community space and activities.
Approximately two-thirds of the $100,000 annual budget for senior recreation
programs is recovered through user fees. The balance covers general staffing costs.
While the Community Center is a senior resource for all of Richfield, it tends to serve
the four high rises less than the rest of the community. Each of the high rises,
particularly when first built, provide staff on-site to promote coordinated recreation
activities for the new residents. This tends to isolate the senior population in the high
rises from the recreation activities offered in the community. Further, it reduces. the
potential these seniors may have to participate as volunteers.
It is recommended that the HRA encourage requesting new senior buildings to
purchase their recreation services from the City.
• 3. Hennepin County Assessor (Source: Larry Miller)
The senior high rise buildings generate property taxes based on their type;
ownership or rental. Thus:
• for the ownership units at Lake Shore Drive, the estimated market values range
from $33,000 to $85,000 and the contribution to property taxes is based on those
values.
• for the ownership units at Woodlake Point, the estimated market values range from
$59,900 to $130,800 and the contribution to property taxes is based on those values.
• the rental property at Village Shores pays property taxes based on the total building
value which is then prorated to rents.
• Richfield Towers is also rental property but is taxed at a lessor rate called Title II.
This rate falls between the homestead and non-homestead property tax rate.
The most important point to be made is that each of these properties contributes the
same amount of property taxes as similar homes and apartments throughout the
community.