A multimillion dollar financing plan to renovate the Days Inn hotel complex in Vernon Township, Pa., into independent senior housing for middle income couples and individuals has been approved by the Crawford County Hospital Authority.
Tuesday's approval of an up to $23 million bond issue by the authority is just the first of many Wesbury United Methodist Retirement Community of Meadville will need for the project to go forward. Wesbury would use the money to refinance a $16.5 million loan from 2009 that it has through the authority, plus purchase the Days Inn and renovate it.
Wesbury wants to make the hotel a mix of one- and two-bedroom units for those age 50 and older who are living independently plus a fitness center that would include the hotel's swimming pool and potentially have office space for some of its home-based services.
Wesbury is a nonprofit continuing care retirement community offering independent living, assisted living and skilled nursing care.
"We want to create something that doesn't exist in this community," Brian Nageotte, Wesbury's president and chief executive officer, told the authority in outlining the project prior to Tuesday's vote.
The project would target those age 50 and older with incomes in the $20,000 to $35,000 range who want to downsize, Nageotte said. Those with an annual income above $35,000 would be considered too, he said.
"The middle income bracket is underserved not only here, but across the U.S.," Nageotte said.
While it's a nonprofit entity, Wesbury's residential buildings are taxable and Wesbury does not plan to apply for tax-exempt status for the Days Inn property.
While the Hospital Authority has approved up to a $23 million refinancing plan for Wesbury, it anticipates only needing approximately $20 million to refinance the previous $16.5 million loan and acquire and renovate the Days Inn, according to Nageotte and John Swick, the Hospital Authority's attorney.
Wesbury is planning on a 20-year fixed rate loan for the project through First National Bank of Pennsylvania, according to Nageotte and Dan Walsh of the bank.
Just under $8 million of the borrowing would be used to buy Days Inn and perform the first phase of its renovation to ready approximately 20 units, according to Nageotte.
The independent living facility would have between 70 to 90 units with a mix of one- and two-bedroom units, but Nageotte stressed design of the project still is ongoing at this point. While Vernon Township Board of Supervisors gave approval to a conditional use permit for the hotel's conversion in April, the township still would have to approve building plans once they are prepared.
"We would adjust as we go," he said of the number of one- versus two-bedroom units planned. "It can be whatever we need."
The one-bedroom apartments would be approximately 640 square feet with larger units up to 800 to 900 square feet, he said. Each apartment would be equipped with a kitchen, bath and living room, he said.
In addition, the hotel's central kitchen/dining facilities would be kept at this point and office space could be created for some of Wesbury's home-based health care services. Residents at the complex on Conneaut Lake Road also would have access to Wesbury's services at its campus on upper Park Avenue in Meadville, he said.
If all necessary approvals are obtained in a timely manner, work may begin about mid-2018, he said.
The Hospital Authority voted 3-0 in favor of the project with members Wallace Irwin, Glenn Thompson and Ronald Kerr voting in favor. Dean Fair, chairman of the authority, abstained from voting as his firm McGill Power and Bell CPA is the auditing firm for Wesbury. Clark Hoffman, the fifth member of the authority, was absent from Tuesday's meeting.
The county's Board of Commissioners also must approve the project as in the public interest. Commissioners are expected to act on the project at one of their meetings in September.
For tax-free financing for the project, approval is needed from the county Hospital Authority and county commissioners, but neither the authority nor county will be held liable in the event of a default by Wesbury.
Crawford County Hospital Authority is allowed to offer low-interest financing to health care businesses by being able to issue tax-free bonds for projects; combining financing of its projects with those of other county hospital authorities within Pennsylvania in order to issue bonds; or issuing a private tax-exempt note or loan through the authority.
