Plans Shifting for Senior Housing Facilities

As a new player becomes involved in plans for senior housing facilities in Sisters, the developers of the property where the facilities will be housed are seeking changes to a recent annexation agreement.

Last December, the City of Sisters and the owners of the 30-acre McKenzie Meadows Village property signed an agreement to annex the land into the city. The property is owned by Bill Willitts, Curt Kallberg and the Reed family, all Sisters residents.

Intended for a senior living community, the property lies on the west edge of Sisters directly north of Sisters Middle School. Voters initially approved annexation back in 2006. Recently Bill Willitts sent a letter to the city council requesting a couple of changes to the annexation agreement.

"I've asked for small language changes to the agreement - primarily to account for new opportunities that will enhance the developed community," said Willitts.

In the agreement, 1.22 acres of the property was to be set aside for a "commercial medical facility." Willitts would like the words changed to "community/school-based health clinic" to serve the needs of all Sisters Country residents while creating a close connection with the nearby schools.

Willitts' second change request involves the developers used for the construction of the "Senior Assisted-Living Center." When the annexation agreement was signed in December, development was primarily to be done by the Pinnacle Alliance Group, LLC, of Yakima, Washington. Mark Adolf, president of Pinnacle, made several presentations to Sisters audiences over the past year with the goal of educating and involving the public about the proposed retirement community.

"My goal was (and is) to finance the development through local investment and ownership. Unfortunately, given the economy, I don't think local ownership will happen; investment is likely to come from out-of-the-area sources," said Adolf.

Pinnacle's development activity will concentrate on "assisted-living" apartments on the property. Assisted living, as opposed to "independent living," includes individualized healthcare, meals, apartment cleaning, activities, and local transportation for residents for a monthly rental fee.

In Central Oregon, assisted-living retirement communities offer one-bedroom apartments for approximately $4,000 to $6,000 per month, depending on the level of healthcare required. Pinnacle plans to market the apartments to "private pay" potential residents, as opposed to residents who may need to rely on Medicaid benefits. Currently in Central Oregon, most assisted-living communities are close to 100 percent occupancy.

Pinnacle plans to utilize the services of Care Senior Living, headquartered in Eugene, to staff and manage the operation. Development plans call for 42 units in the first phase of the assisted-living facility, with additional phases planned of 20-40 units. The annexation agreement calls for 10 percent of all units built to be "affordable," and evenly distributed throughout the retirement community. Of the 10 percent, one half must be affordable for individuals or families earning 80 percent of the Deschutes County AMI (Area Medium Income, $58,000), and one half must be affordable to those earning 50 percent of the AMI.

Willitts would now like the annexation agreement language to acknowledge the involvement of a second company, Pacific Crest Affordable Housing, developer of the Mountain Laurel Lodge and Discovery Park Lodge senior affordable housing complexes in Bend, as well as the Little Deschutes Lodge in La Pine. Pacific Crest is proposing to build the independent-living apartment piece of McKenzie Meadows, having successfully completed similar projects in Bend and La Pine.

Mountain Laurel Lodge, on Century Drive in Bend, is a 54-unit, affordable, independent-living retirement complex that was completed in September 2006. Restricted to residents 55 years or older who earn less than 60 percent of the AMI, couples earning less than $28,800 per year qualify, as do individuals earning less than $24,720 per year. At Mountain Laurel Lodge, one- and two-bedroom apartments rent on a sliding scale with the residents' income, and range from $394 to $589 a month. And monthly rents must stay "affordable" for 60 years, per state law.

Within six weeks of the lodge's grand opening, every one of the 54 units was rented, and management had a growing waiting list. The same thing happened with the other two properties.

In comparison, Central Oregon independent-living retirement communities rent one- and two-bedroom independent living apartments for $2,600-$3,500 per month. (Keep in mind, however, that "retirement communities" also include meals, in-house activities, and local bus transportation.)

On April 15, Rob Roy, one of two partners with Pacific Crest, along with Rima Wilson, project manager, reviewed Pacific Crest's development proposal for Sisters with the city council at their weekly workshop. "Sisters is currently underserved in terms of affordable and senior housing," stated Roy.

Roy went on to explain that the Sisters area has five percent of the county's total population, but only 2 percent (39 units) of the county's total affordable units. In contrast, Bend has 47 percent of the county's population and 71 percent of the affordable units; Redmond has 12 percent of the population and 25 percent of the affordable units. Comparing the La Pine market to Sisters, Roy said, "There are a lot of similarities between the La Pine and Sisters markets in terms of affordable senior housing needs. And we filled the La Pine property within 10 days of opening."

Pacific Crest's timeline is tight. They'd like a memorandum of understanding from the city by June, detailing what concessions the city is willing to make to make the project viable; community outreach/research July through December; final application into the Oregon Housing & Community Services division by April 2011; construction finished on 26 apartments by December 2012.

"We're very interested in your project and look forward to discussing it," said Mayor Lon Kellstrom, following Roy's April 15 presentation.

Councilor Sharlene Weed is also in favor of the project. "I'm in favor of the project but I think we're likely two to three years out before construction can start," she said.

City Manager Eileen Stein added a note of caution: "The devil is in the details with this project. Pacific Crest needs lots of concessions by the city to make this pencil out and the council is going to be tied up in the budgeting process during May and June."

The Sisters City Council plans to review and discuss Willitts' proposed annexation agreement changes during their regularly scheduled workshop at 8 a.m. on Thursday, May 6, at City Hall. The public is always invited to sit in and listen to the discussion.