New Master Plan Update

Master Plan Task Force update
September 2017

This document is for Lathrop residents, their families and friends, Lathrop staff, Kendal staff, and others interested in the evolution of a master plan for what we consider a special retirement community. We hope it will answer questions and help generate interest in the planning process. – Lathrop Task Force

Progress
Since the last update in March, the master plan process has continued in a thoughtful and deliberate manner. The work and discussions leading up to this point in the process have led us to model one plan with the broadest scope to better understand its implications on our long term financial outlook, land, and community culture.

In order to inform the process, CliftonLarsonAllen was retained in March to update the market study data related to competition within the primary market. In addition, they have been tasked with drafting a financial feasibility study to demonstrate the capital reserves, cash flow and long term financial impact. Key pieces of information for CLA’s model include pricing of new units: the number of townhomes, memory support and enhanced living units, which determines the overall density as well as the unit mix (one and two bedrooms); operating expenses; construction cost; and financing costs. To that end, Brooks Adams Research facilitated six focus groups related to the unit types and pricing in July and the results were shared with the board, residents and staff.

The focus group results have led to redesigning the townhomes to incorporate the feedback and to revisit the entrance fee and monthly service fee pricing. These measures are under way and will be incorporated into the second CLA draft feasibility study.

On September 13, the Executive Committee of the Board and members of the Kendal Corporate team met to review this information and to develop a strategy to move forward. While there is agreement about the fundamentals of the master plan, there is still question about the best location to foster community. The fundamentals of our Life Plan community include residential townhomes, enhanced living apartments, memory support, a new commons area with amenities for the Easthampton campus and upgrades to the Meeting House for the Northampton campus.

Taking stock of all the feedback the Task Force, Board and management has received over the period of two years, the Executive Committee has recommended that we continue to model one plan while also revisiting plans to incorporate the current Inn building into the master plan, perhaps adding common space and memory support onto it. Given the interest in Lathrop’s new Enhanced Living program, occupancy of the Inn has improved, causing a renewed interest in preserving the Inn. Earlier discussions around this option suggested that the outcome would not be ideal and may be difficult and more costly to construct, given the wetland boundaries and configuration of the central location. However, the Executive Committee approved funds for DiMella Shaffer architects to also explore this option, which will be completed in November, and reviewed by the Task Force.

At this time, the work by Ziegler to prepare financing the project with bonds has been put on hold, as has conducting another series of focus groups to test the updated townhome designs and pricing. In the next 30 days, a Pricing Subcommittee of the Board will be formed to explore not only market pricing of the new units but also market pricing of current units, as they turn over. In addition, Lathrop is exploring different refundable options of new residency agreements to increase consumer choice and to reduce Lathrop’s long-term refund liability.

Our current financial position and operations have been strategically strengthened over the last four years. A lingering concern that is being addressed is the need for capital reserves for deferred maintenance. The results of an independent study were received last week and will be incorporated into the CLA financial feasibility model. Balancing the needs and priorities of current and future operations and services will ultimately determine our long term viability and success.

We look forward to ongoing discussions as we build on Lathrop’s mission to respond with respect and compassion to the changing needs of older adults in our communities.

 

 

Master Plan Task Force update
March 2017
This document is for Lathrop residents, their families and friends, Lathrop staff, Kendal staff, and others interested in the evolution of a master plan for what we consider a special retirement community. We hope it will answer questions and help generate interest in the planning process. – Lathrop Task Force
Project Review
March 8th was a highly productive day for the Task Force as it met to continue refining the master plan, which is in what is now known as the predevelopment phase. In the January update, we described the decisions that the Task Force and Board have made and key decisions that are yet to come. Also, we discussed the process and specific deliverables that will guide our collective efforts for the next 18 months. For reference, these points are reiterated below, excerpted from the January, 2017 update.
Decisions Made – Where There Is Unity
• Expansion is necessary for Lathrop’s financial viability and will occur.
• The expansion will be entirely on the Easthampton campus.
• There will not be a pool in the Commons building.
• Easthampton will fulfill its original commitment to the city to identify and officially conserve portions of its land.
• A modified renovation of the Meeting House will be the only change on the Northampton campus.
• A supportive apartment environment (like The Inn) will continue at Lathrop, located in a new facility.
• A memory support neighborhood will continue to be explored.
• The expansion will be modeled and permitting sought for 64 new town homes, 24 apartments for enhanced independent living, and 15 memory support units. This is not an indicator of the final scope of the project.
• Hybrid homes (two-story residential buildings containing more than one residence) will not be included.
• Implementation of the plan will provide for a capital reserve fund for maintenance needs and to weather market downturns.
• Seed capital of approximately $4 million (reduced from $4.8) to start the project will be sought this spring.
Decisions to be Made – Where We Seek Input and Feedback
• How to continue trimming the estimated $46 million maximum expansion cost and still meet long-term financial goals
• How best to position the roadway locations and access. How do we maximize accessibility and preserve the landscape while we minimize hardscape surfaces, such as roads, and impact to current residents?
• How to determine the ideal number and location of town homes; what is the “sweet spot” financially and operationally? How can we preserve/conserve the most land possible? Should Hybrid homes be reconsidered, in order to conserve land?
• What should the proposed entrance and monthly fees be for new residences?
• How can or will the expansion be phased. At what cost? At what benefit?
What’s Next?
In the next four months, funds from Kendal and the capital raised by Ziegler will be used to:
1. Revisit all project assumptions including market demand and pricing, program, residency agreement type, project budget and schedule and financing options.
2. Conduct focus groups and update the market research.
3. Develop a marketing plan and begin to build a reservation list for new units.
4. Complete the schematic design by architects. To date, what have been produced are concept/idea renderings and placement holders to better understand the unit density in relation to wetlands.
5. Perform additional site planning and engineering and apply for applications for entitlements.
6. Engage Clifton Larson Allen to complete a financial feasibility study as required for the seed capital funding
6. Close on seed capital funding.
7. Continue Task Force, Board and resident education, input and updates
In the next eighteen months, Lathrop will:
1. Review and validate all underlying assumptions.
2. Implement the marketing plan.
3. Continue Task Force, Board and resident education, input and updates.
4. Complete construction-level architectural and civil plans.
5. Obtain land development approvals and permits.
6. Secure construction contract.
7. Secure 10% deposits on 70%+ of new units.
8. Close on permanent financing.
9. Begin construction.
On March 8th, the Task Force reached consensus to hire Feasibility Consultant, Clifton Larsen Allen (CLA), to update the market research and prepare an official financial feasibility report for the Bond Anticipation Notes (BANs) investors. Lathrop’s competitor analysis will be updated, the projected market demographics will be reaffirmed and the financial assumptions will be examined. In addition, Brooks Adams, who created the initial market study in 2014 at the beginning of the master plan process, has been reengaged to conduct focus groups with current residents, future residents on the reservation list and external consumers. Focus groups will allow Lathrop to test the unit products, services, and amenities so as to either affirm or disprove the current master plan concepts.
Land Stewardship
In response to the recommendation submitted by the Land Conservation Committee, the architects revisited the site plan to preserve the 40 acres near the wide wood path. “Specifically, the circle of 7 homes proposed to be sited inside the woods has been removed.” Revised plans were presented to Barbara Walvoord and Jim Dowell, which clearly demonstrated that the Board, Task Force and consultants heard the concerns and responded accordingly. This clearly exemplifies our collective values in action and the value of the important process of seeking unity. There are still areas of proposed townhomes that need to be examined carefully in relation to impact to resident quality of life, land conservation, and financial sustainability.
Lathrop management, along with representatives from Kendal, Dimella Shaffer and Berkshire Design, met with Jessica Allen, Easthampton’s City Planner, to provide an update on the master plan and to reaffirm Lathrop’s commitment to fulfill its original promise to place a portion of our land in permanent conservation restriction (CR). The suggestion was made that the conserved land could be held by the city or a land trust, such as Kestrel, which will be considered for recommendation by the Land Conservation Committee.
Residents may have noticed that site planning and engineering has been initiated on the Easthampton campus. Berkshire Design has engaged local engineers to test the soil for storm water runoff and ability to support construction by drilling samples throughout the property and to mark the topography of the sites anticipated to be built upon. As site work evolves, we are committed to enhanced communication about the specific work being done, so that we are all informed in a timely manner. We appreciate everyone’s patience and curiosity.
Easthampton City Approvals/Development Process
In addition to the meeting with Jessica Allen, Lathrop will also schedule meetings in the next 30- 60 days with Mayor Cadieux, the Easthampton Conservation Committee, Easthampton and Northampton Fire Department and Departments of Public Works to share the progress of our plans and to seek clarification of some details as well as advice for navigating a mutually agreeable, successful, and collaborative process.
Revised Building and Site Plans
DiMella Schaffer Architects presented the next iteration of concept renderings that were based upon the conversations with residents and staff facilitated in January. There was much enthusiasm for the new Commons Building and the potential to foster community engagement. Also shown in preliminary form were the townhome units and the Meeting House. The architects will continue to refine the concepts for each of the envisioned spaces and will present updated design concepts at an April Task Force meeting. After the meeting, these renderings will be shared with residents for continued feedback and refinement.
Financing Status & Next Steps
Ziegler has begun the process to seek funding through Bond Anticipation Notes (BANs) in earnest. In addition, Kendal is actively fulfilling its commitment to lend Lathrop funds in order to pay for the work of the predevelopment phase that is currently underway, until the $4.8 million seed monies have been secured.
What’s in a Name?
The master plan began its life informally known as Project Silver Lining. The intent was to convey the hope for Lathrop’s future as well as the inherent beauty of the aging process and the wisdom of those who live at Lathrop. The Task Force was asked to consider a finalized and formal name for the project and all are encouraged to submit recommendations to Thom Wright for consideration by the Task Force. An example from a Kendal affiliate’s recent master plan is Project Renew.
Resident and Board Communications Going Forward
The Task Force is keen to continue transparent and timely communication with all stakeholders and will schedule regular informational meetings to dialogue about the process and progress.
There are many decisions yet to be made, including a finalized site plan around which we can find unity. Fundamentally, we seek a plan that must be in harmony with our values of relational, land, and financial stewardship and sustainability.
We look forward to ongoing discussion, and we very much welcome your insights and energy as we build on Lathrop’s mission to respond with respect and compassion to the changing needs of older adults in our communities.

 

 

Master Plan Task Force update
January 2017

This document is for Lathrop residents, their families and friends, Lathrop staff, Kendal staff, and others interested in the evolution of a master plan for what we consider a special retirement community. We hope it will answer questions and help generate interest in the planning process. – Lathrop Task Force

What’s New?
In two words- a lot! Since the last update, the Finance Committee, Task Force, and Board have continued their work on the master plan and its impact upon Lathrop’s residents, marketability, financial stability and long term relevancy.

Investment Banking Firm and Initial Funding: On September 8th, the Task Force charged the Finance Committee with vetting investment banking firms to help guide the project’s financing process. After interviews in October, unity was found to engage Ziegler, a leader in the senior living industry, providing clients with capital raising, strategic advisory services, equity and fixed income trading, and research. This selection was affirmed by the Task Force and the Board at the end of 2016.

As the new year opened, Ziegler continued its conversation around financing options with the Finance Committee and then the Task Force. They recommended that Lathrop seek capital funds totaling $4.8 million to complete the refinement of the project, update market and feasibility studies, provide education for all stakeholders, complete design schematics, and obtain town and land approvals and permits.

These funds would primarily come from the issuance of Bond Anticipation Notes (BANs) that would be sold to a defined group of investors who understand the risks and rewards of this type of project. The BANs cannot be sold on a retail level, to residents, for example, due to how they are regulated in Massachusetts. The BANs would be unsecured without recourse, meaning that Lathrop would not be legally required to pay back the $4.8 million, should the project stall or fail. We would, however, be responsible for certain costs such as legal expense. The reason these investors collaborate to lend such seed monies is that they hope to ultimately benefit from a 10% return on their investment.

A comforting note: Those investors will take a risk only on worthy projects that are supported by a strong market demand and make sense financially in order for the organization to service its debt and remain viable. Ziegler affirmed that Lathrop’s relationship to Kendal is a distinct advantage and is attractive to investors, who know Kendal well and have invested in similar expansion and repositioning projects undertaken by other Kendal affiliates.

Consensus on a “Preferred Plan”: While the Finance Committee reached unity, concerns were expressed about the scope and size of the project, the notion of repurposing or replacing The Inn, the long term financial impact of increased debt, the plan’s ability to produce capital reserves, and marketability. Lathrop management, along with Kendal, DiMella Shaffer and Cutler Associates, reviewed the design elements of the Meeting House, Commons building and areas proposed for Memory Support and apartments, as well as the viability of alternate Inn scenarios.

On January 24, an amended project scope was presented to the Task Force with an eye to reducing the cost of the project. By eliminating underground parking for the new apartments, reducing the square footage of the Commons building, eliminating a stand-alone building for Maintenance, reducing the scope of Meeting House renovations and either postponing or removing the Memory Support neighborhood, a savings of $2.8 to $4.8 million could be realized. Further, the Task Force had a robust discussion regarding the architectural, financial and ethical issues of repurposing or replacing The Inn with a connected, but distinct Commons Building and apartments.

Members of the Task Force, DiMella Shaffer, Cutler, and Kendal reached consensus that to repurpose The Inn would be difficult from a construction perspective, the spaces that could be created would be inadequate to accommodate the capacity for additional townhome residents and would generally be more expensive. Of paramount importance was the desire to minimize disruption to the lives of Inn residents; repurposing the Inn would require residents to move at least two or three times. Thus, it was decided to recommend to the Board that the preferred plan, to construct a new Commons building and apartments in the Northwest field, be pursued.

Kendal Support: Directly following the Task Force meeting, the Board met to discuss the proposed recommendations, including raising $4.8 million in capital funds and to continue modelling the feasibility and financial impact of the preferred plan. In attendance was Sean Kelly, Kendal’s CEO, who offered a “friendly loan” to Lathrop in support of the project. Kendal has agreed to lend Lathrop up to $375,000 in seed monies, which will be paid back once the $4.8 million in BANs is raised. This is the first time that Kendal has invested in an affiliate in such a manner; typically, their support has been for development of new sites. Lathrop is grateful for the endorsement.

Risk Mitigation: The planning process has been designed to mitigate risk as much as possible. Besides careful planning and casting a wide net for ideas and wisdom among all stakeholders, the next phase of market study will update the competitive analysis and conduct focus groups, both internal and external. If the feedback about the expanded campus, and new amenities and services including wellness, enhanced independent living and memory support, is not substantially positive, then the Task Force and community will revisit and revise the plan. If, however, the updated market analysis and focus groups affirm the current proposed plan, then Lathrop will proceed with the remainder of the planning process.

A second method of risk mitigation is the plan to presell and take 10% deposits on at least 70% of the new units. If this proves to be a slow or difficult process, then the presell period can either be extended or the plan must be revisited and revised. Only after the 70% goal has been achieved will Lathrop then seek permanent financing for the entire project. Doing the construction in phases can be considered at that time if desired.

The decisions were shared with residents at meetings on each campus, on January 25th and 26th. The following is a summary of the plan status – good discussion ensued.

Decisions Made – Where There Is Unity

• Expansion is necessary for Lathrop’s financial viability and will occur.
• The expansion will be entirely on the Easthampton campus.
• There will not be a pool in the Commons building.
• Easthampton will fulfill its original commitment to the city to identify and officially conserve portions of its land.
• A modified renovation of the Meeting House will be the only change on the Northampton campus.
• A supportive apartment environment (like The Inn) will continue at Lathrop, located in a new facility.
• A memory support facility will be established at Lathrop, possibly phased in later.
• The maximum expansion will be 64 new town homes, 24 apartments for enhanced independent living, and 15 memory support units.
• Hybrid homes (two-story residential buildings containing more than one residence) will not be included.
• Implementation of the plan will provide for a capital reserve fund for maintenance needs and to weather market downturns.
• Seed capital of $4.8 million to start the project will be sought this spring.

Decisions to be Made – Where We Seek Input and Feedback

• How to continue trimming the estimated $46 million maximum expansion cost and still meet long-term financial goals
• Roadway locations and access. How do we maximize accessibility and preserve the landscape while we minimize hardscape surfaces, such as roads?
• Number and location of town homes. What is the “sweet spot” financially and operationally? How can we preserve/conserve the most land possible, such as the 40 acres now free of invasives?
• Scope and location of amenities. For example, if there is no pool, should a hot tub be considered?
• The nature of dining facilities to be offered.
• Proposed entrance and monthly fees for new residents.
• How the expansion can or will be phased. At what cost? At what benefit?

What’s Next?

In the next four months, funds from Kendal and the capital raised by Ziegler will be used to:
1. Revisit all project assumptions including market demand and pricing, program, residency
agreement type, project budget and schedule and financing options.
2. Conduct focus groups and update the market research.
3. Develop a marketing plan and a reservation list for new units.
4. Complete the schematic design by architects. To date, what have been produced are concept/idea renderings and placement holders to better understand the unit density in relation to wetlands.
5. Perform additional site planning and engineering and apply for applications for entitlements.
6. Close on seed capital funding.
7. Continue Task Force, Board and resident education, input and updates

In the next 18 months, Lathrop will:
1. Review and validate all underlying assumptions.
2. Implement the marketing plan.
3. Continue Task Force, Board and resident education, input and updates.
4. Complete construction-level architectural and civil plans.
5. Obtain land development approvals and permits.
6. Secure construction contract.
7. Secure 10% deposits on 70%+ of new units.
8. Close on permanent financing.
9. Begin construction.

We have come a long way, but there is still much work to be done. We look forward to ongoing discussion, and we very much welcome your insights and energy as we build on Lathrop’s mission to respond with respect and compassion to the changing needs of older adults in our communities.

 

 

Master Plan Task Force update
May-July 2016

This document is for Lathrop residents, their families and friends, Lathrop staff, Kendal staff, and others interested in the evolution of a master plan for what we consider a special retirement community. We hope it will answer questions and help generate interest in the planning process. – Lathrop Task Force

What’s New?
Since the last update in April, CliftonLarsonAllen (CLA) has been busy preparing two financial scenarios with input and direction from Lathrop and Kendal; a baseline model of staying the course as we are and the maximum scope possible of phases of physical plant development and program and service enhancements.

The financial projection scenarios were shared with the Finance Committee on May 17, then adjusted on the basis of that discussion and presented to the Task Force on June 30. The baseline scenario indicates that Lathrop’s cash position as well as the ability to plan for and address capital infrastructure is untenable. That is, something will need to be done to improve our financial position. The maximum scope scenario, which did not include any expansion of units on the Northampton campus, only improvements to the Meeting House, indicates that the project is viable at its most expensive and inclusive level but may not be the most sensible or practical. As elements of the scenario are further explored and defined, it is clear that any reduction in expansion expenses will improve the financial viability of the project and Lathrop’s long term goals and reduce the risk of long term debt.

It was encouraging to see through the projections that even at the highest amount of long term debt, the new units would produce enough margin to both pay down the long term debt and allow for capital expenditures. CLA also reaffirmed that the master plan expansion would have no negative financial impact on current residents. Building new units would spread fixed costs over a larger base of residents, generate cash flow for capital improvements and maintenance through entrance fees, additional operating revenues through monthly fees and help Lathrop maintain reasonable annual monthly fee increases for all. One evident fact gleaned through CLA’s projections is that if no expansion occurs, annual increases in monthly fees will need to be higher than average in order to maintain our cash position and capital goals.

To better understand these impacts, CLA has now been asked to expand the financial analysis based on certain assumptions and alternatives, and the updated CLA presentation will be available in August.

RIPS
In June, a Task Force subcommittee known as RIPS, which stands for Resident Internal Planning Subcommittee, and chaired by Fran Volkmann, Northampton resident and former Board member, was appointed, and is comprised of resident representatives who currently serve on the Task Force. In addition to Fran Volkmann, members include Karen Clark, Easthampton Association President, Ellen Ober, Easthampton resident, Carol Neubert, Northampton Association President, Peter Van Pelt, Northampton resident and Board Vice Chair, and Eleanor Johnson, Easthampton Association Vice President.

All residents were invited to attend meetings on June 27 facilitated by the members of RIPS on each campus to discuss the master planning decision making process and as well as to gather resident feedback, questions and concerns to be shared with the Task Force. Future meetings will cover specific topics such as the financial projections and key elements of the master plan such as programs, services and amenities.

What’s next?
The next steps are for the Task Force to hear a range of financial options that it might recommend, and to share those options with residents. We are looking forward to hearing a financial breakdown of costs of, for examples, building hybrids vs townhomes, renovating the Inn or building it anew, building a Memory Support neighborhood and updating the Meeting House. This financial breakdown will help us to set priorities regarding how we should move forward.

We look forward to your continued support, insights and energy around Lathrop’s present and future mission!